the 30-day savings rule is a simple but effective way to stay on budget

What is the 30-Day Savings Rule?

What is the 30-day savings rule and is it effective? You bet it is, and here’s why.

Impulse Spending and Materialism

Fewer than one in four Generation Z Americans have a budget, and a staggering 65% of all Americans have no idea how much they spent last month. This is no doubt how Americans overspend by an average of $7,500 every year. The worst part? They couldn’t tell you what they spent the money on.

Materialism has generally won the day in America, but I don’t write this from high atop an ivory tower. I am just as susceptible to shop online and impulse buy simply because I am waiting in line. 

Impulse purchases are, unfortunately, often satisfying, at least initially. Many Americans like me will belabor a selfish or “big” purchase for weeks and even months, only to spend the same amount in the interim on things that turned out to be so insignificant, they don’t even remember purchasing them.

What Is The 30-Day Savings Rule?

The 30-day Savings Rule is perhaps the most practical and sensible spending rule in existence. The rule doesn’t bar a person from spending money on things they want, it just ensures they really want it. 

The 30-Day Savings Rule: When you want to buy something that’s not a need or a bill, take the cost of the item and move it to your savings account for 30 days. At the end of the 30 days, if you still want the product or service, go buy it. 

By delaying the purchase for 30 days, you can avoid purchases that turned out to be impulses, will be more satisfied with what you ultimately buy and in many cases, will increase your savings. 

The 30-day rule in many ways is empowering, because when the 30 day rule has expired for an item, you can guiltlessly purchase it.

Why Is It Important?

We live in a time and place where instant gratification is the order of the day. In just the last few years, Amazon has gone from delivering items in a few days, to guaranteeing an arrival in two days, in some cities, one day, in some neighborhoods within just hours. Ordering from eBay in its early days would have taken weeks and months for items to arrive by comparison.

We have been programmed in nearly every aspect of our lives to expect instant gratification, but this has consequences. It alters our impression of acceptable results for an outcome based solely on expediency over all other factors.

It’s About Behavior, Not Money

Most people make more money than they require to live. The reason why so many people live paycheck to paycheck and depend on credit cards is not out of need, but rather poor spending habits. 

It’s important to change those habits in order to affect change. It’s not enough to have financial goals, Americans need to exert control over their finances and take action. 

The intent is not to understand the process and treat the 30-day rule as purely informational, purposeful spending forces a break in the old habits. It was once thought that humans need 21 days to break or create a habit, but Psychology Today finds that it’s closer to 66 days. The 30-day rule is a good starting point but continuing it for at least two months (and change) will help to break the cycle of impulse buying and start the process of intentional procurement. 

What makes the 30-day rule so successful for so many people is really three components:

  • They are no longer dependent on instant gratification
  • They are more aware of where and what they spend their money on
  • They tend to end up with more money

The Money Is Good Too

The 30-Day Savings Rule forces delayed gratification with an additional benefit – participants save money. Everyone should have a savings goal, usually an amount tied to monthly earnings that automatically transfers from your checking account to savings account each month or on payday. 

When a person doesn’t see the money in their checking account disappear but rather the money is already routed separately to their savings account, it was like it was never there in the first place. 

The 30-Day Savings Rule takes savings a step further. Instead of tricking the consumer into thinking that the money was never there in the first place, they instead know that they could spend the money on whatever purchase they have targeted, but choose not to. If after 30 days, the item is no longer desired, they already have the money in their savings account reinforcing the positive aspects of saving money.

Leave a Comment

Your email address will not be published. Required fields are marked *