Hiding Money From Yourself: What People Are Actually Doing

Most people don't fail to save because they don't know how. They fail because the money is too easy to reach. It's sitting right there, one tap away, on a day when something else feels more important.

So a lot of people have stopped relying on willpower and started changing the setup instead. The idea is simple: make putting money away easy and taking it back out slightly annoying. Here are five things people actually do.

1. Put the savings somewhere you can't see them.

Keep the account at a different bank from your chequing, with no debit card and no app on your phone. You can still get to the money, but it takes a few days and some effort. That small delay is often enough.

2. Take it off the top.

Split your pay so part of each cheque goes straight to a separate account before you ever see it. Money you never see is money you never miss. A transfer that happens on payday works the same way.

3. Give the account a job.

"Savings" is easy to raid. "New furnace" or "Christmas" or "Car repairs" is harder to raid, because spending it means breaking a promise to yourself, not just dipping into a pile of money.

4. Pay a little extra tax on purpose.

Some people ask their employer to deduct extra tax from each paycheque, then collect it back as part of their refund. As an investment, that's about the worst option there is: the money earns no interest and comes back only when you file your return. But as a way of saving, it can work very well, if that money would otherwise have been spent. The point isn't whether the method is smart. The point is that it works for the person using it.

5. Make spending harder.

Delete saved card numbers from shopping sites and your phone. Add a rule that anything not planned waits 48 hours. You aren't saving more, but you're giving yourself time to change your mind.

None of these are recommendations. Every one of them is a way of adding friction, and which ones suit you depends on you.

The Question Before the Trick

Before you set up any of these, ask what you're protecting. Is it your future self, an emergency buffer, something you're saving toward, or your day-to-day living? Only you can answer that, because a spending plan should reflect your priorities, not anyone else's.

Here's the part most articles skip. If you keep undoing the friction, you may not have a willpower problem. You may have revealed a priority. Sometimes the money comes out because food and shelter really do come first that month. That isn't failure. It's information, and it's the most useful thing your spending can tell you about what your plan should say.

Adding friction works when the plan is right and you're just drifting off it. If the plan itself is wrong, no speed bump will fix that. Knowing which of those you're dealing with is what makes a spending plan hold.

That's what How to Develop Your Own Spending Plan: A Canadian Guide to Financial Priorities is about. It walks you through setting your own priorities, reading your own spending as information, and knowing when to add friction and when to rewrite the plan.

Get the book: books.outofdebt.ca

About the author: Douglas Thode is a Licensed Insolvency Trustee with D. Thode & Associates, serving British Columbia and Yukon. Learn more at outofdebt.ca or call 1-866-712-5353.