Painless Saving: Tricking Yourself into Saving a lot More Money



Have you noticed that we are fairly terrible when it comes to saving money for our futures?  And I’m not just talking about retirement, I’m talking about for any reason at all… we’re just plain bad at saving money all the way around.

Lot’s of smart people have written what amounts to countless reams of paper on the subject of why we don’t save more than we do.  I don’t know of any that have just come out and said what the real problem is… for most people saving is hard, like next-to-impossible-hard… and it’s absolutely no fun.

Of course, saving is just like other things in life… those who can afford to save, in general, save more.  No, not always, but usually.  And the closer we get to retirement age, the more we save, albeit much too late in the vast majority of cases.

Why?  Do you really wonder why more people don’t save more?  Because I think you know why… after all, there are lots of reasons.  I mean, let’s start with the various market bubbles that since the 1980s seem to pop every so many years.  We save and invest… and then we lose most or all of it when the markets collapse for reasons far beyond our control or comprehension.

Remember the lie we were all told back in the 80s and every year since then: Invest in equities (stocks), diversify properly (mutual funds), contribute regularly (payroll deductions), and stay in for the long run (forever)… and everything will work out just fine.  What a pile of crap that turned out to be… complete and utter nonsense.

Let’s just take a look at the S&P 500 Index, a nice, safe, index that should be considered playing it safe as for as the stock market is concerned.  Let’s go back to 2000 and see how we did putting our $100,000 there that year.

Well, in 2000, the S&P fell by 10.14 percent… so we’re down to roughly $90k.  In 2001, the S&P fell by another 13.04 percent, so we flirting with 78k.  In 2002, the S&P fell by 23.37 percent, so we’re right around $60k… so far we’ve lost 40 percent of our nest egg.

Now, in 2003, the S&P went up by 26 percent, so we were back to $75k.  In 2004, it went up by 9 percent, taking us to maybe $81k.  In 2005, we saw 3 percent returns from the S&P Index, moving us to $83k.  Then in 2006, we saw 13.62 from the index, bring us to about $94k.  And in 2007, we saw gains of 3.5 percent, which would put us at $97k… at the absolute best, because that doesn’t take into account any fees paid to fund managers, or anything else for that matter… and it’s intentionally the roughest of calculations.

There’s no reason to calculate it more carefully, because the point will be the same.  In 2008, the S&P 500 Index fell once again… and this time by a neck-snapping 38.47 percent… and we’re back down to $60k, give or take a feew thousands in either direction.  Okay, so in 2009… if you had any money to invest in the market, you saw the S&P 500 increase by 23.49 percent, and in 2010, it was up by another 12.69 percent.  In 2011, the S&P went up by 0 percent… so very well done there.  And finally in 2012, the S&P logged another increase of 13.29 percent.

So, after 12 years of saving… and starting with $100,000, there’s no way we’re anywhere close to breakeven.  In plain old dollars, we’re down by more than 10 percent, but if you adjust for inflation, which isn’t optional by the way, and you’re ready to start investing in beer and wine… I mean the kind you drink to numb the pain.

Now consider that in 2000, most “investors” had just lost most of their money that was in the market, so the decade didn’t even start that good.  And then there’s the money everyone poured into real estate ever since the “irrational exuberance” of dot-com days ended abruptly… and we know how well we all did by doing that, don’t we now?


“Irrational” has many synonyms, such as: absurd, crazy, foolish, stupid, ridiculous, unsound, loony, silly, mindless, brainless, preposterous… do I need to go on?  And as to synonyms for “exuberance,” why they would include: excitement, fervor, eagerness, abandon… we’re frigging out of our collective gourds, that’s what we are.

And yet, for whatever inexplicable reason, there are smart people somewhere that want to study the subject and theorize as to why Americans haven’t saved more money for retirement of all things?  That’s an easy one to answer… because we’re all hoping we’ll be dead by then… that’s why professor.

Our government absolutely flips out over the idea of a television commercial staring a man on a horse in the snow smoking a Marlboro, but finds the idea of glorifying the stock market perfectly acceptable, to say nothing of selling us on borrowing at usurious interest rates by packaging them in cards supposedly made of platinum and sapphires.  By all means, borrow at 18 percent or higher in order to invest in shares of an IPO… that’s perfectly okay.  But, light up that cigarette within 100 yards of children, and you’ve basically killed them right where they stand.

What’s your bank been offering for a Certificate of Deposit lately?  Mine, I just noticed, is paying the very enticing rate of 1.05 percent.  If I were naïve enough to believe Bernanke’s “there’s no inflation” mantra, I’d still have to believe I’m losing a couple of points a year at that rate.  That’s not saving… that’s losing.

Back in 2008, a business associate of mine put together a chart showing four comparable investments over the last ten years: growth funds, bond funds, balanced funds (a mix of stock and bond)… and “Under the Mattress.”  Under the mattress came in second… and a close second, at that.

Why aren’t we saving more?  Gee, I don’t know… maybe it’s the same reason that victims of violent gang rape cut back on sex for a while, think that might have anything to do with it?

And do I need to say anything about the costs of health care and college tuition?  If we were playing the Ten Thousand Dollar Pyramid game show from the 1970s, the category would be: “Things that have gone up more than 1000 percent during the last decade.”

And all the while, as we’ve watched Drexel after S&Ls after Enron after Lehman collapse in rubble only months after being Fortune’s company of the ages, or whatever, after we’ve learned that the analysts were actually part of the sales team… and more recently that ratings agencies weren’t even as vigilant as those that award The Good Housekeeping Seal of Approval… after we’ve seen our incomes flat line, as Wall Street’s bonuses rise beyond all reason… now someone wants to know why WE’RE NOT SAVING ENOUGH?

How about this for an answer: Because we’re sinking all our disposable income into something we can use in our retirement years… ammo.  I don’t know about you, but I won’t be the least bit surprised if this country starts seeing a legion of geriatrics start taking others with them when they go.  “Grandpa was such a loving man, quiet, never said a bad word about anyone in his life… hard to believe he killed all those suits at 89 years old.”

No it’s not.  Not hard to believe at all.  Want to know what triggered Grandpa to go all Rambo?  Simple… some reporter wanted to know why he hadn’t saved more for his retirement.  That was it… blew the guy’s head right off, grabbed a bottle of Wild Turkey and headed into town.

Okay, so let’s not wonder why more of us aren’t saving more, let’s instead wonder why more of us aren’t stealing more, or something useful like that.  We’re not saving more because it’s next to impossible hard… we understand from experience that it’s likely also futile in the long run…. and because we don’t see the point in having saved enough money to visit Disneyland three times before we end up having to rid ourselves of all of our assets in order to qualify for Medicaid.

Yep, there’s one thing about this story we call life… it ends badly for all of us… except those who got lucky or stole enough during their stealing years.  Crime unquestionably pays… so don’t even go there.

So, now I’m going to attempt the impossible.  I’m going to show you how to beat back the obstacles to saving more… by tricking yourself into saving more… painlessly.  Without you feeling it at all.



Think I’m insane?  Wrong-O, my spendthrift friends… I am going to share my secrets of Painless Saving, secrets passed down to me by smart old people.  But they are  secrets that have been proven effective countless times…. secrets that you won’t find written anywhere else but here… ooohhhhhhoooooohhhhhhooooo.  (Very mystical.)

Ready… then pay attention.  If you play the following tricks on yourself, you are guaranteed to have real money in 15 years… I’m talking at least $25,000 and perhaps as much as $250,000… without changing or even affecting your lifestyle in any way.  Here they are… Mandelman’s 3 Tricks to Saving More Money… revealed in public for the very first time.

 1.    Change will do you good

The first trick that comes to mind when I think of tricking myself into saving more painlessly is my famous Change Jars trick.  Don’t laugh… I’m about to show you how to save $25,000 in 15 years guaranteed, and maybe a lot more, just from performing the Change Jars trick yourself.

And, no… it’s not a lot of money, that isn’t the point.  It’s twenty-five grand and that’s better than not-twenty-five grand.  It’s also a stepping-stone into more tricking yourself into saving more painlessly, so don’t get all you-know-better already.

Here’s how the trick works…

First you have to acknowledge and agree that change is disposable.  Oh sure, it comes in handy once in a while, but for the most part you don’t need to spend your change to maintain your lifestyle.  In fact, if all of your change were thrown in the trash, your life wouldn’t change at all.

So, now here’s the trick.  You place small change jars in places where you end up having change… in the car for sure… on your dresser… even in the bathroom, if that would work for you.  The point is to make it easy for you to take your change out of circulation by throwing it in a jar.  Every so often, you’ll need to empty the contents of the smaller jars into the larger jar at home.

Soon, you’ll become conscious of converting your money into change because it will become, turning money into savings.  After a while you’ll even catch yourself angling for extra change from a transaction on purpose… just to convert it to savings.  Sometimes when I’m checking out at the grocery store, I ask for a roll of quarters for absolutely no reason.

Because remember… this is change we’re talking about… money that we’ve already agreed, could have been thrown away in the trash and it wouldn’t have mattered one way or the other.

Next we’re going to start a savings account at a local bank or credit union.  Open the account with $500 or $1,000 or even $1500… more if you can handle it without noticing it.  That’s the key here… it has to be an amount you won’t notice at all, so if you don’t have much extra money, open the account with $100 or even less.

Plan on a three percent annual return, and your goal is to convert $75 a month of your money into change.

Then, when the day comes for you to convert your change jars into a deposit into the special savings account opened for only this purpose… add $25 for no reason at all… just because you can without noticing it.  And then forget about it… it’s money that could have been thrown away, remember?

In 15 years, if only earning a three percent annual return, that account will have roughly a $25,000 balance.  Not bad when you realize that you won’t have even noticed it.  (If you can earn five percent annually, you’ll have $30,000, but more about that later.)

Ah, but there’s one more thing you need to know about the change jar trick.  Look for opportunities to supplement it with small amounts of cash… like instead of adding only $25 to your deposits, add $50 instead and bring your savings account balance in 15 years to over $35,000.

And that’s not all either… I want you to also give yourself a birthday present.  You deserve it, so why not.  How about we make it… $200?  Come on, it only comes once a year, right.  Throw that into the same savings account and you just took your balance in 15 years to a little over $40,000.

Could you stand to give yourself a Christmas or holiday present too?  What do you think… another $200?  Cool… right into the same special savings account and we’re over $46,000 in 15 years.

And how about one more possibility… once or twice a year you’re going to look for something you were going to do… but didn’t.  I don’t care what it is… shoes you didn’t buy.  A trip you didn’t take.  Did you decide not to buy a new car for a year longer than you planned… that would more than do it.  Or, maybe it’s a garage sale at which you sold your old leather jackets, or a stereo that no one has used since the iPod was invented.

What we’re looking for here is $500 once a year… or $250 twice a year… but we need it to come either from dollars we were about to spend and didn’t, or from dollars we never expected to get.  If you can do it… you just flew by the $65,000 balance mark in your 15-year savings account.

And you did it all on change you could have thrown away and it wouldn’t have mattered, a couple of perfectly reasonable gifts to you each year… and the proceeds of a garage sale or a suit you didn’t buy.  Nothing you’d ever be able to notice… your lifestyle won’t change a bit.

Last trick… after year five… look to transfer the balance into a vehicle that’s  earning five percent interest annually over the next ten years with little or no appreciable risk.  You might consider an indexed universal life insurance policy with a two percent floor and an investment in the S&P 500.  If the S&P goes up you’ll earn 12 or 14 percent, but if it goes down, you’ll still earn two percent.

The fact is… you just took that 15-year savings account balance and pushed it well over the $100,000 mark, because now you won’t have any trouble talking your spouse into doing the Change Jars trick with you, right?

It’s amazing how much easier it is to get others on board with the trick when adding to a balance of $65,000 than it is to get him or her to start saving more money because you both know you should.

And the beat goes on… once you’ve got the momentum, and you see an opportunity to throw money in there because you know you won’t ever miss it… like you win the raffle at the High School fundraiser, or whatever… it’s going straight into that savings account where the money that could be thrown in the trash now goes.

What do you think… is that sort of thinking worth another $1,000 once a year?  If it is, you just took your 15-year balance up to $125,000.

Now, could you let it ride for 20 years instead of taking it out in 15 years?  Oh my goodness, you just sailed by the $160,000 mark.  Should we try for $200,000?  I bet we could make it easily, but better not to strain ourselves too early… we’ve got more tricks to learn.

TOOLS OF THE TRICK – What you’ll need: 1- very large jar… at least 2- smaller change jars or boxes, 1- garden variety savings account.  Not that much, actually.


2.    Candy Dish Silver

For my next trick, I’m going to show you the importance of not throwing money away, by making sure some of it ends up spray-painted blue in the bottom of a deep candy dish, or large vase… with beads on top.

Yes, you heard me right… here’s the deal.  Unless you’re in a serious financial bind at the moment, you probably have at least a couple of days each month when you feel a little more flush than usual.  Maybe you just got your bonus at work, maybe you and your spouse just got paid on the same day.  Whatever the reason, you’re thinking… why not… let’s go to dinner and a movie and maybe buy that something we’ve wanted… have you seen how cheap flat screens are getting at Best Buy?

Fine… do whatever you want, but first… before you leave your desk… go online and buy 10 American Silver Eagles…  ten, 1 Oz. silver coins.  Today, that’ll cost you about $220, but some days it’ll be a little less and other days a little more.  If you can, buy 20 Silver Eagles… spend $440.  You don’t really need a 70” flat screen, okay?  Get the 50” or 60” and sock the difference into silver coins.

When they arrive, spray-paint them blue and throw them into the bottom of a deep glass vase or dish with beads on top… and forget about them.  U.S. Silver Eagles are as good as cash anywhere in the world at any time.  But yours are just enough of a pain in the butt that you probably won’t wash them off and cash them in unless there’s no option and it really is an emergency.

Get it?  Remember, like me… you are retarded when it comes to saving, so you need to place money just far enough away from your greedy little mitts so you can’t blow it when you’re old friends from high school come to town, or because you really do want that 70” inch flat screen.

Will silver’s price go up or down in the future?

My first response when anyone who knows what I do asks that question is… I don’t care.  I know it’ll be worth some reasonable amount… I won’t lose my ass, anyway.  Why?  Because it’s only $22 an Oz, that’s why.

How much lower will it go, do you think… especially when you consider that virtually all experts would tell you that the price of silver in 15 years will be higher than today’s price for all sorts of reasons.  Is it a risk… not much of one, because if I didn’t do it… I’d have blown that $220 or $440 on the flat screen… or something else that will only end up in my garage gathering dust.

Do this once a month at the 10 coin level and you’ll have 120 U.S. Silver Eagles by year’s end.  Obviously, double that and you’ll have 240 coins.  Last year, silver was selling for around $35.  If that happens when you have 240 Silver Eagles, you’ll make close to $3500 on your $5280 invested.

That’s not too shabby, but even more importantly, even if silver stays flat or loses a few bucks… your coins are likely still going to fetch very close to five grand… which is five grand you’d like not have in any form if you didn’t turn some extra cash into the blue coins people see at the bottom of a vase filled with beads.

Do this monthly, and you can buy a brand new car for cash in four years… and your spouse will think you’re a magician…

Now for my next trick…


3.    The Anyway Money and the Second Source of Income

Anyway money is money you were going to spend anyway.  It happens all the time, and I mentioned it briefly when describing how you can extend the power of the Change Jars trick.

You’re looking on line for a new camera.  You decide not to buy one.  What did you just potentially save?  $200?  Transfer it into your primary savings account.  Not the one you opened for the throw away money, this is your main savings account we’re talking about… the one you can take money out of to go on vacation if needed.

(You should have three savings accounts by the way.  One you touch as needed.  One you try not to touch.  And one you never touch because that money could have been thrown away and it wouldn’t have mattered.)

You were about to head out of town for the weekend, but your mother-in-law fell ill and you can’t go.  What’s that worth that you were about to spend… anyway?  $500?  Probably… whoosh!  Straight into your savings account.

Passed up a trip to Starbucks?  That’s at least $4 that can be whooshed into savings too.  Are you starting to get the idea here?  Keep track and send the money to savings where it’s just a little bit harder to spend than were it still in your checking account.  Your checking account is where money goes to die.

There are several ways you can do this… keep track in a notebook for example, but with technology being what it is today… yep, there’s an App for that.  I like… ImpulseSave, which is an app for the iPhone and Android.

You can find out more about it at, but suffice it to say that you enter your savings account and checking account information and you can transfer funds between the two… well, just like WHOOSH!  It also makes it easy to set specific saving goals, like if you want to save for that flat screen I keep talking you out of… lol.

Every time you transfer money into your savings account it’ll ask you if you want to earmark it as being towards a goal you’ve already set… you say yes and it will show how much progress you’ve made to reaching that goal.

Anyway money can add up fast.  Most people tell me they’ve exceeded $1,000 a month in anyway money, most months anyway.  And once it’s in savings, while some will undoubtedly come back into checking and get spent, some won’t.  And the higher that balance gets, the harder it gets to spend it.

You’ve been tricked into saving, once again painlessly, using anyway money.


A Second Source of Income is exactly what it sounds like, but it’s not necessarily a part time job.  In fact, it could be a garage sale you hold twice a year, and maybe it’s working with your buddy a few days here and there to pick up an extra paycheck for doing something you don’t normally do.

This is a good thing to do for all sorts of reasons, not the least of which is that it’s good to do something different than what you do every day.  And the other benefit is what it can do for your savings if you split it with yourself.

It wouldn’t be fair for you to take all of it from yourself… you’d be pissed if you did that… to you.  But, you can make a deal with yourself to split 50/50, right?  That’s fair.  You get to spend 50 percent of what you make on whatever you want or need, but the other half goes into savings account #2.

If this sort of secondary source of income turns into $4,000 a year, there’s your annual tax-deferred contribution to your IRA.  Or maybe you find a job paying cash under the table, in which case… fiddle-dee-dee and fiddle-dee-dah… and I’m not suggesting nothing, so don’t look at me like that.

The deal is that we all tend to grow our lifestyles to fit our incomes, so if someone makes $100,000 a year, chances are their bills equal that same amount (if not more).  A second source of income, therefore, can have a dramatic impact on someone’s ability to save.

And in my experience, there is always a way to pick up a little extra cash doing something… a few times a year, if not more.  I had a buddy who used to tend bar at a local watering hole a couple of times a month.  He was a lawyer during the day and I’m sure he did his tending mostly to have fun behind the bar.  But don’t kid yourself… he didn’t mind the extra dough either.

How do I know?  He did it for years.  And he used to brag about what he made in tips… about $600 a month, by the way.  I was always jealous… I’ve never tended bar or I’d probably be down there behind the bar this coming weekend.

That’s $7200 a year, right?  $600 x 12 = $7200, right?  Well, if you can earn 3.5 percent on that money for 15 years… that’s $150,991.41.  Another hundred and fifty grand… to add to our throw away $150k… and we’re into $300,000 territory in 15 years without even touching our accumulated silver coins or our anyway-money-transfers-to-savings.

By the way, for those a bit younger… let that same $600 month bank for 20 years instead, and it turns into $217,940.19.  Let it stay for 30 years and it’s $391,892.19.  And that’s just at 3.5 percent interest annually… get that to 5 percent and you just passed the half a million mark.

No two ways about it… a second source of income adds up when you trick yourself into saving at least some of it.


The Inescapable Conclusion…

First of all, don’t tell me you can’t do any of this… you can.  I’ve seen young children save $6,000 using these sorts of painless saving tricks on their allowance and birthday money.

Secondly, there’s only one way to succeed at tricking yourself and that’s to do it quickly and with no time for yourself to talk yourself out of it.  Because you will, you know.  If you give that immediate gratification, defeatist brain of yours any time at all, and it will come up with hundreds of reasons for your savings behavior not to change.

See… you’re already slipping away… stop it… stop it.  No, you don’t need to get more coffee or change the channel right this minute… stay here.

Start the Charge Jars trick today.  Make it your top priority to have change jars in at least three locations by end of day… or maybe even by lunchtime.  Don’t let your genius brain that’s never saved a nickel screw it up… you can do this.

Then look online at sites that sell silver coins… American Silver Eagles are pretty, but so are Canadian Maple Leafs, and even Chinese Pandas… they’re all the same silver coins.  Try if you don’t know where else to look.  They always have the lowest prices, but don’t sell in small quantities.  When the spirit moves you… buy ten… it won’t kill you.  They’re nice to look at and to hold.

Soon, you’ll be thinking about that whole second source of income thing… and maybe the anyway money too.  It’s catchy… like a disease.  You start saving and it starts to make you feel good… better than that flat screen ever could… well, maybe not… maybe you do need the flat screen.

But save for it.  Don’t finance it.  In fact, get into the habit, when your spouse says he or she is going shopping, ask the question: “Are you going shopping or going borrowing?”  Shopping involves spending money… borrowing involves using a card of some kind and paying interest when you don’t pay the balance in full at the end of the month.

When some sales clerk recently asked me how I wanted to pay for a shirt I was about to buy, I replied, “Hmm… How about a little each month over many years at an obnoxiously high rate of interest.” 


She laughed.  I put the shirt back.


I can’t even remember what it looked like.


But I transferred $70 into savings… WHOOSH!  And smiled all the way home.


Mandelman out.





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