3 Invisible Savings Tips That Work


With money tight these days for so many people, it's worthwhile considering some subtle "invisible" savings tips to ensure you're meeting your financial goals. When money was tight as a fresh college grad, I had devised a few different ways to set aside money without really noticing it. This both removed the temptation to spend it and the deterrent to give up when I was having a tight month, since these methods were virtually invisible! (See also: 5 Ways to Save Money on Everyday Expenses)

1. Checkbook Roundup 

Before the advent of online banking, I was writing 15-20 checks per month. No matter what the payment amount was, I would always round up to the next full dollar amount and record that in my ledger. When something was $1.20, a $2 entry went in and so on. After a couple years, my checking account balance was several hundred dollars greater than what was showing in my checkbook ledger. This served two purposes: First, I'd be hard pressed to bounce a check with a buffer that large, even if I accidentally forgot to record a check or ATM withdrawal. Second, after a few years of this, it was a nice unplanned couple hundred dollars I could draw down to rebalance and start over again once I had accounted for all recent outstanding checks that hadn't been processed yet. These days, if you write very few checks, the system may not generate much in the way of invisible savings, but I still practice it to this day. I like the idea of the cash buffer in there. With interest rates close to zero, the opportunity cost on a few hundred dollars is inconsequential, and it's reassuring to know that if my wife or I forget to record an entry, it's covered.

2. Save Every $5 Bill

The neat thing about $5 bills is they are somewhat rare, yet not so painful to part with for an invisible saving method. I used to pay for almost everything in cash, and I tended to deal with 20s and singles quite a bit. On the occasions where I was handed a $5 bill for change, it went right in my invisible savings jar that night. See, the $5 bill is small enough and rare enough that I didn't really miss having it, yet after a year or so of a five per week, I'd saved around $250.

3. Never Use Change

Aside from the fact that watching the customer in front of me dig around and count out pennies to pay the cashier drives me batty, I've derived more pleasure from saving and investing my change than carrying it around and counting it out. I've always just dumped all my change in a can and then counted it out and savored the pleasant surprise. I used to do it the hard way with coin rolls, but now many banks have automatic change counters for free.

Each of these methods might realistically only yield a few hundred dollars per year, but that's a few hundred dollars you probably wouldn't have saved otherwise. And it's practically invisible!

Important: Have a Strategy for Deployment of Your Invisible Savings

Saving this money is only half the battle.  If it's holiday time, you've saved $700, and you go blow it on an impulse purchase, that probably wasn't your initial intent at the beginning of the year. What I used to do with these savings was to deposit the money every quarter or so, even if it was just $100, and write a check for an equivalent amount to a dividend reinvestment program (DRIP). Essentially, these programs allow you to buy partial shares of common stock from publicly traded companies at any time, often for free or a very low fee. By forcing myself to divert these funds to a pre-determined objective, over several years, I was able to amass a nice portfolio of large blue-chip companies simply from invisible savings. Perhaps your objective might be a 529 plan contribution for the year (see 529 pre-paid vs. tuition strategies), Christmas shopping money, next year's travel fund, or simply building up your emergency fund.

Do you have other "invisible" savings methods to share?



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Guest's picture

I employ some of the same tips! I love 5 dollar bills. Especially if my teens needs some money and I want to use a 5 so I don't have to worry about 'forgotten change'. :)

I don't use my change at all. I don't have a place to put change in my purse, so it goes in my pocket and into my piggy bank at home. In December, I cash it all in at Coinstar and get an Amazon gift card. I then shop for out of town relatives using this money each year.

Darwins Money's picture

Wow, very similar appoach then - it works!

Guest's picture

I definitely employ #3 everyday. I have this giant 3 ft plastic Coke bottle that I received as a gift one Xmas. I'm from Canada, so I have the luxury of throwing in Loonies and Toonies which makes it add up much faster than just small change. It took me a few years to fill it up and when I moved across the country I decided to cash it in. Turned out there was about $800 worth of change in there (it was super heavy and took a while to count), which was put toward some of my moving expenses. Currently, it's almost up to the half way mark, so hopefully in a year or two, it will be full again to spend on something else. :)

Darwins Money's picture

I never thought of it, but I'd be curious to see if you can routinely measure your value just by how high it is in that massive container. I guess you could reasonably assume it's proportional to your last tally assuming you get similar ratio of coinage!

Guest's picture

I just can't have money lying around: every dollar that's not in the bank is a dollar not working for me. As they say, lots of little savings add up to big savings.

What could work for me is a combination of tips 1 and 2, where every debit transaction rounds up to the nearest five dollars. Speaking of debit cards, I'm a big believer in not carrying small change/cash in this day and age since those small bills lead to small unnecessary purchases.

You know how it goes though, personal finance is personal and not all about numbers.

Darwins Money's picture

True, I'm always amazed by the diversity of thought and how something that works for one person is completely the opposite for another. It is personal, with a twist. I constantly learn new ideas and try stuff out based on others in the community. But I do tend to gravitate to the same persistent concepts.

Guest's picture

I think the key is definitely having a purpose for that saved money! So many times I think I've 'saved' money on something and then spent it on something else before putting it into the bank. A good way I've found to build my 'invisible' savings is to transfer money from my paycheck before I ever see it. The money adds up without even realizing it!

Guest's picture

I use these tips. I set aside $5 per week during the year, and both husband and I save our change. At the end of the year, I don't have to worry about how I'll be able to afford to buy x-mas gifts.

Guest's picture

These are some great tips, except for the first one. I am a big believer in recording your financial transactions down to the cent. This way you have clarity and honesty with yourself.

Guest's picture

I especially like tip number 1. While I understand what Mike said (because I do the same thing about recording my finances down to the cent), but I still round up and electronically transfer the additional pennies into my savings account. So, I’ve got both. I record to the penny and round up (Double “R” – record and round). :)

Guest's picture

These are great saving tips! They are great idea and I will surely try them. At first, I know, its really hard to save up some cash, but when I started putting some savings in the bank and I was never tempted to withdraw it unless it was necessary. :)