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MONEY SMART KIDS
Saving Strategies
by Janet Bodnar

My recent columns on helping college grads set up a first-time budget have elicited some lively -- and practical -- responses.

A number of you contributed additions to my list of psychological tricks you can play on yourself to control your spending and save more money.

Let me say first that what these ideas demonstrate is that everyone has his or her own style of managing money. There's no one-size-fits-all system that's going to work for everyone.

Some people prefer using cash rather than plastic because they can actually see what they're spending -- and stop when they run out of money. Others prefer using credit or debit cards because they get a written record of their expenditures, and cash tends to burn a hole in their pocket.

The point is to know your habits, so that you can play to your strengths and compensate for any weaknesses.

I once knew a guy who had an interesting way of saving money. Every time he wrote a check and recorded it in his checkbook, he'd round up the amount to the nearest $5 before he subtracted. He never bounced a check, and he always had a bonus slush fund.

Neat idea. I also heard from another reader who rounds up her checks to the next dollar. Same principle, smaller slush fund.

You suggested that when people make a credit card purchase, they subtract the amount immediately from their checking account so they're not surprised when the bill arrives. I used to do just that, but sometimes making the subtractions in advance messed up my accounting. So I began tallying the credit card purchases on a separate register that I kept with my checkbook. Worked like a charm.

When I helped my teenage son open his first checking account a couple of years ago, he was given a debit card that fit into a cardboard sleeve with a register attached to record deposits and withdrawals. It was a great way to get him into the habit of keeping track of his transactions, and he has never overdrawn the account.

I'm one of those people who transfers money to savings every time I pass up a latte or eat at home instead of going out. I immediately put the cash in the big savings jar I keep on my dresser. It's instant gratification because I can actually see the money I saved.