Wallet hacks to keep you on budget

The first step to saving money is to create a budget. The second step? Stick with it - which is easier said than done. Here are a few ways to curb your bad spending habits.

OK, you’ve made a budget—but now you’re having trouble sticking to it.

Keeping to a budget, especially if it’s a new habit, requires daily reminders before it becomes second nature. Here are some tips to help fight the battle at ground zero: your pocketbook or wallet.

Wrap your credit card with a note

To get spending under control and help jump-start your savings, try this simple trick: Wrap your primary credit or debit card with a note saying, “Do I need this?”

Others suggest sticking a picture of the financial goal of your savings: a new car, an ocean vacation spot, that guitar you always wanted. The point is to think twice before you spend each dollar, especially if it’s on credit.

Stack your wallet with crisp Benjamins

Wait a minute—to save money, we should carry a lot of cash? Yes, and the bigger the denomination, the better. And the newer the cash, the better.

According to a study in the Journal of Consumer Research, the higher the denomination of bills, the less likely we are to spend them. Keeping your weekly spending budget all in your wallet, in the form of $20, $50 and $100 bills, will make you less likely to splurge.

And dirty money spends faster than newer bills. Another study in that journal found that the older the bills, the more likely they are spent.

Keep the change

As we detailed in a previous post, one easy way to save is to pick a denomination—any denomination—and every time you receive that bill, put it aside to deposit in your savings account. If you really want to test the denomination effect, save all your $1 bills. With our natural reluctance to spend more valuable paper, this should put a stopper on spending (and it’ll certainly make you think twice about spending cash on gum, candy and coffee).

Reduce the credit cards in your wallet

This is not to encourage you to carry zero cards; used wisely, targeted purchases with credit cards can save cash if you’re diligent about not carrying over a large balance. But if you keep most of your cards out of your wallet, it will reinforce the habit of planning ahead when shopping and sticking to your budget.

Use apps to track receipts

Good budgeting requires diligent tracking of outflow, but a pocketbook filled with crumpled receipts not only bulks up, it becomes more daunting to uncurl and sift through at the end of each day or week. Carrie Smith of Careful Cents recommends apps like Lemon or Shoeboxed that will capture photos of your receipts using your mobile phone.

“This makes it easy to save and process the transactions into expense reports,” Smith writes. “It will also save hours of time (and money if you hire help) during tax season, as well as get the maximum deductions you qualify for.”