Tricking Yourself
Posted by Gail | Filed under Credit Wise, Money Management
I was browsing around the web recently when I came upon this statement:
“Any way that you can trick yourself to make extra payments on non-producing debt helps.”
Trick yourself. There’s a lot of that going around. There are the new “trick yourself into saving” programs being offered by a number of banks. Really? You don’t want to be able to take credit for being smart enough to save? You’d rather “trick” yourself.
And there are all the “tips and tricks” you can use to get your debt paid down faster. The quote above comes after the advice that you can get your debt paid off faster if you round up your minimum payment. So if your minimum is $87, trick yourself into paying off more by rounding up to $100. It’s the same “trick yourself” ploy some banks are suggesting you use to save.
So my question is this: Why do you have to trick yourself?
You’re a grown-up, right? You may have made some mistakes, dug yourself a wickedly deep debt hole, but you know what you’ve done. Do you want to stay asleep at the wheel of your finances, grasping at every ploy to try and trick yourself into becoming solvent? And do you think “tricking yourself” and “taking control” can be use in the same sentence?
At some point, if you really want to be in the driver’s seat, you need to accept that you are the person who must consciously make the decision to change what you’ve been doing. Becoming conscious is the first step to doing things differently.
There are great ways to become conscious. You can start to track your spending, making a note of every penny you spend and on what. Then you can look back over your list every week to see the patterns that may show up. My best suggestion is to go back over your last six months’ worth of bank and credit card statements and look at what you’ve been spending to see where your money has been going. Then you can make a budget that reflects what you’ve been spending. You look at the bottom line and if you aren’t balancing, you cut back. Or you make more money.
As part of this process you need to come up with a debt repayment plan that will actually do more than keep you in your crediors’ good books; you have to pay off the debt. And you have to start setting aside some money for emergencies and some for long-term savings.
In the later episodes of TDDUP, I stopped handing people a debt repayment plan and a budget. I made ‘em build their own. I insisted they set something aside for emergencies and for long-term savings. And I insisted on an amount for debt repayment that would have people out of debt in three years or less. The folks who liked to keep spending or didn’t want to have to work any harder always took as long as they possibly could for their debt repayment. The folks who were committed to being Debt Free chose a shorter term and found a way to come up with the money they needed to create a new reality.
There are always going to be people who want to take the easy way out. They don’t want to become conscious of what they’re spending because that would mean monitoring themselves and, perhaps, denying a desire. And they don’t want to “over-commit” to debt repayment because that would cramp their style. It is these people who love to tick themselves.
Money management isn’t rocket science. It’s discipline. If you’re determined to get to where you want to be, you need to be purposeful about what you’re doing. You need a plan. And you need some chutzpa. If you’re a wuss, by all means, keep tricking yourself.
October 2, 2009 at 6:17 am
Gail,
Great post. my wife and I track everything we spend. there is no tricking involved. We don’t need fancy cards that round up what we spend and place it in a savings account. We don’t need to try to convince ourselves of any fancy rounding to pay off debt. Our budget is very clear as to how much money we have for debt repayment every month and we turn around and push that total amount to the creditors we owe.
I think this is just another attempt to get the people that don’t make a budget to continue to be slaves to their creditors. It would also allow a creditor to take a bigger minimum payment without actually make much more head way on the debt. Keeping the debtor in debt for as long as possible seems to be what they want to do. So highlighting debt repayment strategies that don’t actually work is something they are probably really good at.
regards,
Jason
October 2, 2009 at 6:42 am
Tricking ourselves is just another way to stay an ostrich and keep our heads buried, hoping the sky doesn’t fall while we’re down there, but if it does we wouldn’t know.
I have never felt so empowered with my money as I have in the past couple of months with an actual working budget and an actual ‘every 2 weeks the same amount’ pay cheque. Before this, as a contractor, I would simply buy, buy, buy, pay off 2 of my credit cards in full the following month (leaving another consolidated cc with minimal pmts), wonder why I had no savings, still had debt, and go back to buy, buy, buy again. I never really put myself on a salary (HUGE mistake) and would adjust my ‘payroll’ according to what was happening that month (or what had been spent the month before).
I’m hoping to teach some of what I’ve learned to a couple of other contractor friends that find themselves in deep caca every month, never taking vacations because they have to work the hours to make up for what they spent the month prior. That’s not making a living, that’s just buying what’s already been lived.
October 2, 2009 at 8:19 am
I agree with you on the whole, that being conscious and taking responsibility are integral to becoming debt free forever. However, I wonder if we re-framed these “tricks” as “baby steps” if they would could more acceptable. If you’re struggling to make big changes (that may well be quite necessary) making smaller changes sometimes gets you on the path to building success. For instance, when I was only making about $200 a month (in grad school), I took on a position that paid a $150/month honorarium. I “tricked” myself into not including that money in my budget, so that I could put it in another account for emergencies. I suppose I could say that I consciously chose to not spend that money, but knew it was there, so it was kind of a mind game, kind of a choice. In the long run, this mini-emergency fund kept me out of hot water on a few occassions, so it was a baby step towards not incurring more debt. I guess I’m just wondering about semantics here.
October 2, 2009 at 9:25 am
I agree with Michelle. To trick is to be dishonest with ourselves about our money. Although in today’s world, it is easiest to lie to ourselves and go on perpetrating that lie.
I also agree with psychsarah that it should be a baby step for those who need them to get onto a path of debt free. Tricker gets you into all kinds of trouble in the long run, but baby steps continue the forward movement of the overall plan and continue the behavioural reinforcement.
Such a great way to gives us food for thought Gail.
October 2, 2009 at 9:26 am
I don’t necessarily think the use of the word “trick” has to imply that you are tricking yourself. I read it to mean, “here is a good tip, strategy or trick that I use to help myself”. For example, this year my salary went up for the first time and I forgot that I was now in a profession where this happens automatically each year until I hit year 10. This amounts to an extra $200 per month net. Not small change… so one “trick” I am using in order to avoid lifestyle inflation, is to put that money right into my debt repayment. My budget was based on last year’s salary, which just means I feel like I have more free money each month to slap onto the debt. Somehow this has a good psychological effect on me. I feel like I’m doing more, with virtually no effort on my part. Now, I see that as a trick, but not that I’m tricking myself. I know what I’m doing, I just don’t feel like I’m suffering for it. For a lot of people, that’s what the tricks are about.
Just like the tricks we use to avoid food cravings, like drinking adequate fiber, eating at regular intervals, eating high fiber and water content foods… these are little tricks that help you meet your goals.
October 2, 2009 at 9:27 am
oops, that post above is supposed to say drinking adequate WATER, not fiber!
October 2, 2009 at 9:44 am
Hmm – I’m so-so on this post too. I think we “trick” ourselves all the time. I’m sure we all know at least one person who sets their watch and clocks ahead 5 minutes so they are “tricked” into not being late. Should they be adults and realize that being late is rude and makes them look bad? Of course they should. But if “tricking” your mind into thinking it’s 5 minutes later than the current time is your “method” of not being late is that living in denial? Of course somewhere in your mind you know it’s only 8:55, not really 9:00.
I think the crux of the matter is your locus of control. Who is decided your financial future – you, or your creditors? If you are controlling yourself with “tricks”, I think it could be worse. If your creditors are pulling the strings and continuing to let you off the hook for taking responsibility, then I agree with Gail completely.
October 2, 2009 at 9:46 am
ps – Jennifer I had a giggle at “drinking adequate fiber” – Metamucil, I suppose!
October 2, 2009 at 10:01 am
I totally get Gail’s point.
Taking the time analogy:
As a chronic late person, I was someone who set their watch 10mins early so I would not be late. This worked for about a week until my mind made the adjustment to this new time and I knew my watch (and clocks) were 10mins fast, and so I could leave 10mins later. I ended up being just as late.
I eventually had to “grow up” and adjust my mindset – I now consciously look at the clock and repeat to myself what time I need to leave, and how much time I have left to get ready. This works far better than trying to “trick” myself.
I imagince this would also be true of money. Eventually one’s mind stops being “tricked”, realises they are putting away some extra money, and so decides they can afford to buy that extra something or go out for dinner one extra night (because in their mind they are now already doing extra debt repayment).
October 2, 2009 at 10:12 am
Hi Tessa – great reply to what I wrote. I think your rebuttal makes total sense, and I think I better understand Gail’s original point because of your post, too.
Cheers!
October 2, 2009 at 10:17 am
I don’t really consider the savings programs as if I am tricking myself. I have money set aside for debt repayment, long term savings and an emergency fund every month. My account also puts 50 cents into my savings account every time that I use my debit card. Last month I used my card 20 times and had $10 deposited into my savings account. I think of it as shaving $10 more dollars off my budget as I keep a running total that I update daily of how much I have left in my budget categories so I don’t overspend.
October 2, 2009 at 10:25 am
right on Gail!
‘money management is NOT rocket science’…….
it takes discipline……….something too many of us don’t have.
October 2, 2009 at 11:01 am
I saw this article online and thought of this forum immediately. Sigh. Have to share.
http://www.cbc.ca/consumer/story/2009/10/01/saving-survey.html
My “favourite” line…
“Barekat, who lives in Vancouver, said he has a secure job and a good credit rating. He is also confident he can borrow money if needed, and pay it back.
“Saving money is good, but I don’t worry about it,” he said.
*picture me banging my head against a brick wall*
Folks, running counter to what you’re seeing in the media, expect a long running recession that could actually get worse, especially when governments eventually realize you can’t fix a major imbalance by throwing money at it.
October 2, 2009 at 11:56 am
?Tricking? What about just doing things ‘invisibly’. You are kiding yourself by tricking yourself. Take control of your lifestyle, and you will be able to take control of your finances. There is no trick to that!
October 2, 2009 at 12:20 pm
Gail,
How about a post on what women who don’t work outside the home (for whatever reason) should do to prepare (cya) in case something happens to their husbands? The safest ways to save cash. The order best to do things–emergency fund, then debt reduction and retirement? Anything stay at home spouse-specific?
My husband’s not in the best health and is in denial. He smokes and drinks, and won’t stop and I can see his health deteriorating each year but he won’t get help. I stay home with my tot because day care here would take my full paycheck. I did the math. Next year my little one will go to school half a day (free if I can get him in), the year after that full day. I plan to work full time then. Meanwhile, I’m trying all sorts of things to save/earn little bits from home.
Thanks!
October 2, 2009 at 12:51 pm
Ahhh. The mind is a very tricky place. Have been using mine for years to convince myself that I still look good in tight jeans.
In the bad old past we used two sneaky tricks to fool ourselves 1. move credit card balances from one card to another thus “paying off” one card and 2. getting consolidation loans to pay off all our debts in one shot thus having to pay only one debt repayment a month instead of ten thus wiping out those ten debts.
I can remember the intense feeling of relief every time we did this because the balances on all our debts (except for the consolidation loans and mortgage equity advances) showed a beautiful zero so I could trick myself into believing that we were handling our affairs properly. After all we had no real debt now – just a loan and a mortgage – so we could afford to use our cards again. And of course we would not go overboard now because we were financially responsible people (see the new loan documents as proof) so we could shop as long as we paid the full balances off every month. Didn’t even work for the first month.
October 2, 2009 at 1:07 pm
Does it ultimately matter how they do it? As long as they are working to improve their situation and reach their goals, who cares if they have to “trick” themselves or not?
October 2, 2009 at 1:23 pm
Dana:
I think that tricks/tips can work, however…
-What is the goal?
-How so you plan to achieve it?
-Does the execution match the plan?
-Does the execution make the goal achievable?
-Is the trick/tip incorporated in the budget? (Otherwise another category will suffer and you won’t make ends meet.)
A conscious budget is easier. I want to save x $ per month or week so I transfer that amount on schedule. My tip is that it is done automatically for me. Is it a trick? Yes and no.
Yes: I set it up once and now I don’t have much to do about it until the new year. Not much work for the rest of the year
No: My budget balances with the automatic transfer.
October 2, 2009 at 2:29 pm
We trick ourselves in beginning to pay double payment on cc and when the budget needs to be cut back once in awhile… I consider the cc to be a bill of the same amount and had to cut back other viarable spending categories to cover the bills. It has help us to stay on track to keep plugging away paying off cc. The vehicle loan had $50 extra on top of payment they were asking. now the payment is always dropping but we keep it at $!00 amount to pay it off faster
|:) 
October 2, 2009 at 3:40 pm
The worst thing about the rounding up is that you can’t really budget as all those little amounts do add up to big amounts. Budgets should be realistic. We can’t balance our budget if we’re using round numbers in all the categories (40 instead of 37) – and we’re left with all kinds of free floating bits & pieces that just get away from us. Much better to take $20 out of the bank and leave it in the car for coffees than using all the random rounding up!
October 2, 2009 at 4:34 pm
I love your blog Gail, but I didn’t enjoy this post.
While I do agree that people should try to be conscious of how they are managing their money, assuming that everyone needs to do it is like wanting everyone’s career choice to be that of a doctor, or an astronaut.
Some people are just never going to get it.
I don’t think that necessarily makes them a ‘wuss’.
I for example, ‘trick’ myself into saving by going online and tossing the odd cents into a savings account.
Why? I HATE saving. I do. I hate it. This is the only way I can do it. I manage my money well enough; I just have such a low income (less than $1000 a month), I’m single, and the cost of living in my area is crazy. I’m lucky to save at all.
Frankly, even if I’m ‘tricking’ myself into saving, I’m still saving. Why is it important how I got there? :/
October 2, 2009 at 4:52 pm
Seeing as it is ‘trick or treat’ season, I’ll throw in my two cents.
About 35 years ago I made it a habit of rounding up on the amount written into my cheque balancer. (anyone remember the days of cheques or cash only?) Here I was writing everything down, but, I was not being accurate. I tricked myself into feeling good that I had more money in the bank than the cheque balancer said. Dumb.
And dumber?…..We got a LOC probably when they were first invented and were not wise in the use of it. The balance has been up and down like the proverbial toilet seat for years.
Fast forward to November 2008. I was Gailvazoxladeized. And I’m here to tell you I am breathing easier. I mentioned in an earlier post that I didn’t use the jar system over the summer – long story. This week I’m baaaaaaack and as I was going into the grocery store this afternoon I thought to myself, ‘what a relief to be back on the jars!’.
So, we all live and learn. And, if the younger ones can learn from we older ones, that’s gravy!
A.M. I’m very concerned for you and your child. It’s none of my business really… but last week one of my best friends was diagnosed with lung cancer from second hand smoke. Hit me right between the eyes out of nowhere. She’s one of the WALKERS and we’ve been friends for 42 years. I do hope your hubby doesn’t smoke around you.
Women used to keep the egg money for their own savings. I don’t know what to suggest as an equivalent in these economic times.
October 2, 2009 at 5:19 pm
Thanks for the link E. I enjoyed reading it.. and I have to agree. I think it’s going to be a long long time before the recovery actually feels like one.
great post Gail!
October 2, 2009 at 5:58 pm
Call it a “trick” if you will, but it has worked for me twice now – automatic payroll deductions towards Canada Savings Bonds. Removing $4000-5000 per year ($400-ish per month), meant that it took only 5 years to save up for a $20,000 “new to me” car! The money was taken off my paycheque before I ever got it, and I literally “forgot” about that savings. When it was time to buy a new car, I cashed in the CSBs and shopping I went! What a great feeling to walk into a dealership and pay CASH for a $20,000 car, and drive away with a brand new car and not a single car payment in sight!
October 2, 2009 at 6:58 pm
Great post.. I come on this site daily to keep myself motivated to save and repay my debt. It has really helped.
October 2, 2009 at 10:53 pm
Ahh Gail…reading your blog is like a breath of fresh air. I love that you tell it like it is and make people wake up and be accountable!
October 3, 2009 at 1:23 am
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October 3, 2009 at 7:47 am
hmmm….not the best post I’ve ever read here…when I asked people if they would like to sign up for the simply save program we have at TD…I NEVER once advertised it as “tricking” yourself into savings…simply that it was a convienient way to save like anything else you set up on auto debit/credit….rounding up on your credit card payment is not “tricking” yourself either, it’s simply paying your debt down faster…saving money and paying down debt is the constant mantra here and like Carleen said above who cares how you get there…just do it!
October 3, 2009 at 9:03 am
psychsarah, you didn’t “trick” yourself at all. You consciously decided to put that money in an emergency fund. Where was the “trick?” You knew exactly how much you were saving for an emergency every month, and you didn’t use that money for anything else. Pretty conscious me’thinks.
Pam, I too am all for baby steps. I’m the girl that says I don’t care how much you save, just start saving. Get into the habit, and then grow the savings over time.
Jennifer, you are doing more by having decided to use the money from your raise for debt repayment in stead of simply incorporating it into your spending. Again, there’s no trick.
Donna, this system works for you because you have extra money in your account that you don’t need. However, many of the people I’ve seen with these savings accounts are rabid shoppers and have upwards of 40 or 50 transactions each month, leaving their accounts empty just before a big auto-debit must go through. And some of them regularly transfer the money back to their transaction accounts, so they end up saving nothing at all, but feel like they are saving because they’re “signed up.”
Dana, who cares if it’s a trick? Each person has to answer that for themselves. I simply asked the question, “WHY do you have to trick yourself?” Would it make more sense to know that you plan to save $20 a month, and then achieve that goal, than to hope that with all your transactions you a) still have enough money to meet your needs, and b) will be saving “something”. Again, I’m simply arguing for being “conscious” about saving and debt repayment instead of playing a dumb game with yourself. It’s the dumb games that end up leaving us with a sense of not being in control.
Carleen, you wrote: While I do agree that people should try to be conscious of how they are managing their money, assuming that everyone needs to do it is like wanting everyone’s career choice to be that of a doctor, or an astronaut.
I hardly think taking responsibility for managing your money is like a career choice. It is that very lack of control so many people display that has them in hot water right now. EVERYONE should be in control of where their money is going. Hey, if it’s going to coffee, or shoes or movies, as long as it’s a conscious decision and not a knee-jerk reaction that’s going to put you into the red, you go for it. But be conscious.
Mrs. T., automatic payroll deductions are not a tick. You know exactly what’s coming off your cheque, and where it’s going. You’ve made a conscious decision – and a smart one — just as if you’re set up a pre-authorized debit to your savings account. Payroll CSBs are a great way to build up a pool of money for any reason. But if you don’t have that option at work, you can do the same thing for yourself by setting up a savings account and having the money auto debited from your account to the savings account every month. I do this for my property taxes, gifts, emergency fund, savings and home maintenance money. I have a plan; it’s no trick.
Sparky, the reason these savings accounts are a “trick” is because you don’t actually have a plan for how much you’ll save. And most people sign up for the plan because they’re “sold” on the incentive — the bonus — the bank offers to entice new customers. Since how much I save is dependent on how many transactions I do with my debit card, this might also entice me to use my debit card for more transactions so I can “save” more. The “savings” is predicated on SPENDING. This is not a conscious act of saving. If people are to be in control of their money — and their lives — they need to know that they are purposefully doing something, not randomly accumulating.
People, being in control means waking up to the fact that every penny you spend is a choice, and that conscious choice beats the pants of a random series of events that may or may not work in your favour. Saving $35 a month is a good idea. Shopping your brains out and then telling yourself, “hey, I’m saving 50¢ each time I use my debit card” is not. It’s a trick. And if you bought into it, you’ve been “handled” once again by a smart marketer!
October 3, 2009 at 11:21 am
Thanks for clarifying, Gail. I was wondering if what we were doing was a “trick”. We worked off your budget pages to figure out monthly totals, but I actually only put money in the “jars” on the 1st, 8th, 15th and 22nd and play a ‘game’ with myself about stretching the money at the end of the month to make it those few extra days til the 1st. But I know exactly how much money this means we are saving each month (difference between 4-week budget vs. monthly budget) and am putting this into a general slush fund to cover unusual expenses in these categories, like in August when we had a wedding gift and 3 birthday parties–our gift budget didn’t cover so much at once! And I’m doing this on top of other savings, planned spending and emergency funds being built up, and on top of saving any money left in the ‘jars’. I guess it’s a way to ensure there IS some money left in the jars, and I personally like the challenge of stretching for those few extra days–it reminds me that I am IN CONTROL of my money, and I can make do when I need to. A good muscle to give regular exercise to in these economic times, me thinks.
October 3, 2009 at 1:22 pm
This is the same reason that I’ve been reluctant to use points cards… I found that in the past I spent more money because I’m thinking of the points that I’m getting. Maybe it works for a lot of people but for me I just ended up spending more… I don’t believe that anyone gives you something for nothing anyways. As for savings. I don’t use any tricks either. I have a certain amount that I have automatically deducted for savings, RRSP, and RESP. To me it feels great to know that I have specific amounts going into these three every month and there’s no guess work involved. Until I became concious of savings and debt I was pretty much free-falling into a deep, dark pit… *shudder* Never again.
October 3, 2009 at 5:34 pm
If folks use their debit card MORE just to save the extra via the “trick” then there is still a bigger issue at hand then using this way to save…when I spoke with clients about this service I took the time to go through their average monthly debit transactions, their cash flow, and how much they would like to see saved (we did have a great incentive at the roll out of this campaign…10.00 for every hundred you saved…that’s a 10% return)…then we worked out how much they should have transfer over per swipe…they could choose anywhere from .50 to 5.00 per transaction…not once did I suggest or imply that they should swipe more to build up their savings…that just doesn’t make sense…the idea is for it to be easy but it still requires some planning prior to getting started…like anything we do in life, a little pre planning makes even the simplest of things even more simple…no trick to it:)
October 4, 2009 at 5:50 am
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October 4, 2009 at 10:57 pm
I think that this tool of rounding up on your transactions can be a good tool but you need to be wise about it as well. I do not use it (I rarely use my debit card), but I have tricked myself in other ways before. My brother sets his clock ahead, so he can trick himself into getting up earlier and therefore having more time in the morning to get ready for work. Or in university tricking myself by writing down my assignments as being due one day early, that way I could have one extra day to edit. While it’s not for everyone it is good for some, and if it helps to pay down your debt or put a little extra into savings then why not? But still be aware and manage your money. I think even with these accounts you should still be saving a planned amount each month, and don’t shop more just to add a few cents cents per transaction to your savings account. Be smart about it!
October 5, 2009 at 10:16 am
Gail – I get your point. I have all of “my ducks in a row” so to speak and have the wiggle room in my budget to not miss the $10 or so a month. I can see how if you are telling yourself you are saving and are still spending beyond your means then yes you are tricking yourself. And yes, I imagine many of them then take the money out towards the end of the month when they get low on funds so they end up not saving anything at all.