5 Things To Do If You Keep Spending Your Savings

There are a lot of great tools for savers out there these days that we have discussed quite a bit on this site. Between “round-up” debt cards that deposit small change into a savings account and tools like Digit that intelligently find savings in your budget, there are a lot of ways to trick yourself into saving.

However, a lot of us might be able to save for a little while, but then once we establish a nice cushion, we find a way to spend it. Then all of our hard work and sacrifices are wasted.

If you have a problem spending your savings, here are a few tricks that will help you hold on to that money for the long haul.

1) Buy Gold

This may not seem obvious but buying gold is one of the best ways to save. 15 years ago, when I was mostly and consistently broke, I bought a 0.5 oz gold eagle coin. I still have it today. But the reason I still have it has nothing to do with me being disciplined. Rather selling gold coins is a bit of a pain. You also forget that you own it so you’re not tempted to spend it. By the way, that gold is worth more than triple the amount I bought it for 15 years ago. Even during the 2008 crises, gold did not lose money by the end of the year (but it did go way down from its high price for that year). Gold is an excellent protection against inflation but it’s also a great way to maintain your savings if you have a tendency to spend it.

2) Buy Certificates of Deposit (CDs)

You don’t hear as much about CDs anymore. Part of that is due to low interest rates so people don’t have as much reason to save. However, if you have difficulty saving, CDs can be a great tool because you can’t sell them without a substantial penalty. Usually CDs are 3 – 12 months or longer in duration. If you try to get the money before the end of the CD, you’ll pay a fee. I hate paying fees so it’s a good way for me to discipline myself.

If you are are trying to speculate a little and look for higher interest rates, then check out TIAA. They offer CDs in different currencies that have higher interest rates than the US dollar. But remember: if you buy another currency that is paying a high rate, you run the risk of the currency going down. But it could just as easily go up. It’s up to you if you want to take the risk for some more money.

3) Buy A Dividend-Paying Stock

As I said before, part of the reason you may be having trouble saving is because you are not properly incentivized with high interest rates. The federal reserve has kept interest rates so low, for so long, that it makes more sense to borrow than to save. You can turn that around by buying high-dividend paying stocks. High dividend stocks are harder to find these days, but I own a handful of good ones. We don’t give stock recommendations on this site, but there are many great investment research services out there specifically designated to finding stable, high-income stocks.

4) Put It In A Retirement Account

Similar to buying CDs, putting savings in a retirement account (like a 401k or IRA) gives you good reason not to spend your savings. If you try to take your money from your retirement account before retirement, you’ll end up paying a penalty in addition to any taxes. This is often enough incentive not to take money out and find another way to get money if you need it rather than dipping into your savings. I am not very disciplined but I have managed not to take any money out of my retirement accounts due to the penalty.  You can also combine the first tactic (buying gold) with this one and open up a self-directed IRA that allows you to buy gold in your retirement account.

5) Give It To Trusted Family Member

This idea doesn’t work for everyone, but for some, it’s a great option. My friend’s mom is a CPA and he gives all of his savings to her so he doesn’t spend it. Unfortunately, we don’t all have this option and even if we did, we might not be comfortable with the idea. But if you have a trustworthy person in your family like a parent or sibling who is very responsible with their money, it could be something to consider.

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