You can always count on the “napkin guy” Carl Richards to come up with pithy ways to shift your mindset and be financially responsible. When tackling big purchases, why put it on your credit card and hope you can afford it later when you can create a payment plan BEFORE you purchase it. So, even if you can’t purchase the big-ticket item in full you can decrease the amount you need to borrow.

The preload method he describes in the New York Times:

You decide you want the $40 per month iPhone. You think you can afford it, and it fits in your budget. Instead of buying it, you preload the purchase by pretending to buy it. Set up a savings account and automatically transfer $40 a month to it. Places like Capital One and Ally Bank make this easy, but many other banks offer automated transfers, too.

Do this for a few months. You get to practice before you buy and see how it feels.

Seems simple, right?

• You might ask students to discuss why such a simple strategy is so difficult to implement (think marshmallow test!)

One NGPF podcast guest, Tiffany Aliche aka The Budgetnista shared a similar technique and went as far as to name her accounts based on her savings goals.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

More posts by Tim