There are so many different money tips out there in the world. We’re wise to check out as many of them as possible and see which ones work for us. One of the top ideas out there is matching buying with saving. Although it’s easy and useful, many people aren’t familiar with this simple tip. So, if this is new to you, make sure to read on. It’s truly a great way to save money.
What Is Matching Buying with Saving?
Put simply, matching buying with saving literally means “the amount you buy is the same as the amount you save.” In other words, it is exactly what it sounds like it is. As soon as you buy something, you take that exact same amount and put it directly into savings. If you don’t have enough money to match buying with saving, then perhaps you shouldn’t make the purchase right now. This focuses your consciousness around your spending. Moreover, it consistently adds to your savings.
How Matching Buying with Saving Helps You Save More
Obviously, every time that you put money into savings, you’re helping yourself. You create an emergency fund. You provide yourself with a sense of financial security. Perhaps you’re saving for something as big as a housing downpayment. Or maybe you just want to save your pennies so that you have a little extra for when you want to splurge. Either way, consistently putting money into your savings account helps you in myriad ways.
Matching buying with saving doubles the benefits. First of all, you’re going to save more often this way. If you buy a coffee, then you drop the same amount into your piggy bank. If you go get a massage, you take another $100 or so and save it. You regularly make purchases. Some of us purchase items daily. Therefore, you’ll find yourself saving money daily. Since most of us don’t do that, we easily save more with this approach.
Plus, it gets us in that steady saving mindset. If you wait until the end of the month to save, then you might not have much leftover to add to your savings. Or perhaps you automate your savings with ten percent of your check going to your savings account. All of that is still great. However, thinking about saving consciously every single day goes a long way towards savings for life.
Plus You’re Likely to Reduce Your Spending
This approach to saving money makes you think consciously about every single expense. Personally, I tend to double the cost in my mind and ask if it’s worth it. For example, a cocktail might cost $12. However, since I will match that to my savings, I think of it as costing me $24. Of course, I get to keep the extra $12. Nevertheless, when I think about my budget for the month, I have to decide, “can I afford $24 for this cocktail right now?” Because that’s what I’m effectively spending in that moment. This allows more conscious, focused, thoughtful decision-making about purchases. It particularly helps me avoid impulse buying.
I love to get professional spa massages. It’s not easy to come up with an extra $200 for a massage. (I live in an expensive city, so with tip that’s usually what it comes out to.) To come up with $400 for this treat is asking a lot of myself. However, this is an important part of my wellness. Therefore, I look for ways to cut back on other spending. Then, when matching buying with saving for massages, I put that money into a specific account that I use only for massages. This allows me to keep replenishing my massage funding supply without having to dip into other savings.
How to Match Buying and Saving
As you can see, there are many different approaches to matching buying with saving. As just mentioned, I match massage spending specifically with a savings account that I use only for massages.
However, for general saving, I would use other approaches. For small saving, I would use a piggy bank. If I buy a coffee, I match that into my piggy bank. For larger spending, I would use my traditional savings account. For example, a night out with friends that costs about $100 would find me stopping at the ATM to deposit another $100 directly into my account.
Some people set a specific goal for all saving. For example, saving for a honeymoon or a new car. Every single time they buy anything at all, they deposit that same amount into the specific savings account.
Match Only Specific Things
If you find it overwhelm to match every single purchase with a savings deposit, then consider a smaller approach. Malvern Bank recommends choosing one small area of life to match buying and saving. Their three suggestions are to match coffee purchases, impulse buys, and/or gifts for others.
Saving As You Go vs. At The End of the Month
Personally, I find it easier to match as you go. This keeps me focused on saving and hones my attention to what I’m spending money on. However, it’s not the right approach for everyone. Some people are able to use a weekly, biweekly, or even monthly matching system. In other words, they go through their accounts at the end of the week or month to find out what they spent. Then they deposit that same amount into their savings account. If that works for you, by all means, go fir it.
This is Not the Same as a Matched Savings Program
You might head online to do further research into this method of saving. That’s great. However, be aware that some totally different results will arise in your search. There’s a thing called Matched Savings Plans, also called an Individual Development Plan. These are specific types of accounts for people who are seeking to buy a home. Usually they have income requirements. In these plans, you deposit a specific amount into the account. Then the program matches that amount. This doubles your money for your home down payment. These are wonderful plans for those who qualify for them. Nevertheless, they aren’t at all the same as matching buying with saving. So just be aware of that if you’re doing your own follow-up research to this topic.
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