If you’re the type of person that picks change up off the ground, the $5 dollar bill savings plan just might be your new favorite saving strategy. The best way to save money for the future is with traditional investment plans like 401ks and IRAs but there are other ways to save that are a little more basic too.
How it Works
The $5 bill savings plan is simple. Every $5 bill you receive gets put away in a safe place. It’s just like emptying your pockets into a change jar at the end of the day, but with a bigger denomination. Research has shown that smaller units of cash are viewed as less valuable by most people and more easily spent than larger ones. With this in mind, a thrifty saver can trick themselves into spending less of their money by seeing the $5 as more valuable.
The idea can be applied in many ways, and some people choose to save all their singles instead, though this could quickly become a unmanageable wad of bills. Most practitioners even find these types of strategies to be fun, with each new bill becoming a token in some kind of savings treasure hunt.
Setting Short Term Savings Goals
The sums add up over time, but they’ll most likely be smaller than the more traditional savings plans for retirement. This makes the $5 bill savings plan more suitable for short term savings goals. Over the course of a single year, some people save as much as $3,000 in $5 bills. The key is to make sure that you are conducting a majority of your purchases in cash. As you change from $100s, $20s, and $10s, you’ll have a better chance of putting away more for a short-term nest egg. Much like all other types of savings plan, consistency and patience are essential. With enough time, all those gloomy Lincoln faces could be transformed into something that’s really worth smiling about.