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Money expert Clark Howard says the holiday shopping season is the time of the year when many Americans lose control of their spending without realizing it.
About a month ago, I shared with you a personal challenge to prevent end-of-year wasteful spending.
Simple strategy to save extra money
I set a goal to “save my savings” for November and December, which includes two of the biggest shopping days of the year: Black Friday and Cyber Monday.
What exactly does it mean to save your savings? Let me give you an example…
I recently spent $32.67 to buy two shirts at Nordstrom Rack that were on sale. Here’s a picture of the receipt that reflects a “savings” of $5.94.
What would you do with the $5.94 that you saved? Many people would naturally use it to spend money on something else, so the discount really doesn’t get them any closer to reaching their financial goals.
But with this challenge, I transferred $5.94 — the amount I “saved” — to an actual savings account.
For the past month, I’ve kept my receipts from Nordstrom Rack and other retailers tucked away in a box. I went through and added up the “savings” over the weekend.
Here are a few examples:
- DSW – Saved $52 on running shoes
- Kroger – Saved $13 on groceries
- PetSmart – Saved $3 on dog food
- Spin classes – Saved $84 on membership
The grand total was $162.36. I then transferred that amount from my checking account to a savings account that I set up specifically for this challenge.
My plan is to put the money in a Roth IRA after I’ve finished this two-month experiment.
Retailers highlight discounts on receipts for a reason. They want you to remember how much money you saved so that you’ll go back and spend more at their store.
I’ve found that reviewing the receipts from this challenge has helped me become a smarter shopper.
Since I know that I’m going to bank my savings anyway, I’m even more motivated to search for deals, coupons and promo codes for items that I truly need.
The more I save at retailers, the more my savings account balance grows. It’s a great feeling!