Frugal Tip: Rounding Up

Recently I started posting a more in depth look at each of the frugal tips. Over the next few weeks I will publish the frugal tips that I have collected. Please note that not every tip will work for everyone. Chose as many of the tips that will work with you and your family and start implementing them. Today we will proceed with Tip #10 Round up in checkbook and place excess in savings at end of the month.

This is something that I have done over the years as has several of my blogging friends, such as Dawn over at Frugal For Life.
The idea is a simple one, make a rounded entry in the check register for the check you've written. When you do, make sure you round up, never down for deductions. You want to subtract a little more than you actually wrote the check for. For example; if you wrote the check for $15.06, make a register entry for $16.00. This will leave extra in your bank account and will be a hedge against overdrafts. At the end of the month, move the excess to your savings account.

Most checkbook registers have extra columns that are rarely used, often labeled “Code” or “Fee”; if you write a check for $23.78, enter it in your checkbook register as $24.00; record the $0.22 in one of those spare columns. Similarly, if you deposit $468.37, enter the deposit as $468.00 and record the $0.37 in the same column where you recorded the $0.22. As you complete a page in your checkbook register, total the “spare change” column at the bottom of the page. Carry this amount over to the next page; when you complete that page, add the carried over total to the current page total, and carry the sum to the next page, and so on.

At least once per month, total up your “spare change” and transfer that amount into your savings account. Once you’ve transferred the funds, your “spare change” column starts over at zero. Depending on how often you utilize your checking account, you may find you can quickly add a few hundred dollars to your savings with this method.

- Suite 101

There are some banks that help do this for you. However, the banks that do this rip you off elsewhere and are not banks that I am interested in using. I can do it myself and not have all those extra fees that those big mega banks charge.


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