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How to Save Ten Percent or More Every Month

By: Joshua Unseth-- 2010-09-16 1:00 am --

One of the most simple yet overlooked ways to save money is the "imagination technique." No, it doesn't mean to imagine you're incredibly wealthy, although that can be fun too!

The imagination technique involves picking a percentage of your monthly (or bi-weekly if you prefer) income that you would like to save. Say you would like to save 10% of your earnings, but like so many others, can't seem to figure out where your money goes.

The next time you're out shopping, you'll use your imagination to pretend everything you're buying is 10% more expensive. That grocery bill of $50? Pretend it was $55. Bought yourself a new article of clothing for $25? Your imaginary expense kicks in, it's $27.50. As you can see, it doesn't seem like much, but these little piles of 10% will stack up quite quickly.

You may be thinking this is going to be hard to keep track of. It does require a little bit of effort, but after you notice your savings adding up, it will become much easier. A great way to keep track of your imaginary 10% "pretend tax" is to just keep a little notebook in your pocket. After you make a purchase and get back in the car or get home, whip out your notebook and make a note of the 10% amount (although don't wait too long or you'll forget).

Now the hard part. Obviously you still have the money you pretended to spend, and it sure will be tempting towards the end of the month to use it. Don't. Part of the imagination technique is to pretend that the money has actually been spent - it doesn't exist anymore. Train yourself to accept the idea that the money is spent, it's gone, and you'll have to make do without it.

Of course if there's an actual emergency or an urgent need for the money, you'll have to use it, but isn't that part of the reason you're saving in the first place? Even a few weeks of using the imagination technique can add up to enough to fix minor car repairs or pay an unexpected bill.

This way of saving money every month is fun, easy, and the only effort required on your part is to make use of something you've always had - your imagination!