Tips & Tricks
As mentioned in the DBSP plan description, there are certain things you can do to "amp up" the results. Most are common sense kinds of things, but now and then someone has an a-ha! moment and as a result a new wrinkle to the plan is born.
Paying cash whenever possible
There are three well-known exceptions to paying cash.
1. Online purchases - okay, duh, but people ask
2. Travel-related - airfare, hotels, car rentals belong on credit cards
3. Warranty protection - some credit cards offer extended warranty coverage
Do not spend $1 bills (or coins)
There is one universal exception to this rule: tipping. Sometimes laying down two $1 bills is the right thing to do. (Remember the Server's Golden Rule: Tip unto others as you would have them tip unto you.)
Bank your accumulated cash regularly
Unless you like having a big stack of bills hanging around — which can be a great source of motivation and reinforcement, by the way, especially in the early days of using the plan — take your stash to the bank on a regular basis. That might be every two weeks, or every two months. You'll have to determine what's best for you. But do get the cash into the bank. It will be safer from theft... by both burglars and you!
Get an old-school savings account
Get a passbook savings account at a low/no fee institution. I prefer a credit union, but commercial banks are okay, too. Here's the catch. You want an account with no ATM or debit card attached, and it should not be tied to any overdraft mechanism. Tell the bank you want the only withdrawal option to be to walk into the facility and talk to a teller. If they offer an ATM or debit card with no withdrawals and no purchases allowed, deposits only, then get that.
Now you can deposit your money at the institution, or via the ATM. If, however, you get the urge to spend it you will have to physically go to their facility to withdraw it. This will discourage impulsive raids on your funds and help keep your money safe from you.
I prefer to use an institution where the savings account is the only thing I have with them, and I make sure there is no nearby branch office. Having no other accounts eliminates the temptation to shuffle funds, which is too easy to do with online banking. Having no nearby office makes it a more thoughtful decision, and a more difficult action, to go get money. In my case, it is a fifteen minute drive.
Stop using debit/credit cards for routine purchases
This may seem like a silly thing, but each time you use plastic to pay you are robbing your DBSP account. That $5.65 fast food lunch you charged pulled $4.35 out of your savings. Gas up the car for $37.25 and charge it and you keep $2.75 from savings.
Paying in cash can slow down spending
Many people report a reduction in spending (also a positive thing for most of us) by having to fork over cash. Whipping out the card makes it far too easy for our money to flow out, often without us fully realizing just how much we're spending. Counting out cash to pay helps bring things back into perspective.
Avoid them. Their products are too expensive, and seriously, do any of us really need more soda, candy, chips, etc? Do your DBSP account and your waist a favor and walk on by! Exception: If you work in an environment where food from a machine is the only option, then by all means eat; however, you can usually save more if you pack a lunch.
Accelerate your savings
It's known as the dollar bill plan, but there's nothing to keep you from applying the same technique to larger bills. If you have an income of $75K and no dependents, then consider making yours the Five-Dollar Bill Savings Plan. Higher income earners should consider a $10 version. Of course, how high you can go depends on your individual circumstances, but if you're serious about saving it is a good option to consider.