Ask Jane: What's the best way to hide money from myself?

Jane Bryant Quinn is a nationally known commentator on personal finance, with books and columns read and trusted by millions. In her long career, she has established herself as America’s most reliable voice for people trying to manage their money well. Read more of Jane's articles here.

To become a serious saver, start hiding money from yourself. It works every time — if you don't see it, you won't spend it. You won't notice that it's gone. Really, you won't. I know, because hiding money started me on my first successful savings plan.

“Hiding” money means keeping it out of your checking account. Checking accounts are spending accounts. Anything in there is fair game. You look at your totals every time you pay your bills and know if there’s a surplus begging to go free.

If you bank online, as I do, you see the totals in your savings account, too. But there’s a mental barrier to transferring money out of savings into checking. You’ll see your savings going down and will probably feel bad about it.

Your one doubt about hiding money might be, “I need all I earn to pay my bills.” But something magical is about to happen. If you hide, say, $100 a month in a savings account, you will wind up spending $100 less. You won’t know how it happened, or what you didn’t buy. You’re picking up money that slipped through your fingers, silently. Now it’s being saved instead of spent.

So how do you keep money out of your checking account?

1. Start a retirement account. If you have a 401(k) at work, join it. If you have already joined, increase the amount you're putting aside. If your company puts you into the 401(k) automatically, you might be signed up to contribute only 3 percent of pay. That's not enough. Start raising the contribution by a couple of percentage points a year. Remember the magic: You'll still be able to pay your bills because your spending will automatically adjust. Your eventual savings target: 15 percent of pay.

If you don't have a 401(k), start an Individual Retirement Account (more details on IRAs here). You can set up regular payments into an IRA from your checking account.

2. Start a savings account, for quick cash on hand. Do it by arranging automatic payments out of your checking account and into savings. Time the payments to occur a day or two after the bank clears your regular paycheck. You can arrange for the transfer online or by phone. Start paying your bills only after the savings have left your checking account.

3. Claim zero exemptions on your income-tax withholding form (ask your company's Human Relations Department how to do it; you'll need a new W-4 form). When you receive your refund, put the entire check into savings.

4. Save all found money — gifts, bonuses and checks from side jobs. When your savings account is large enough, put some of the money into an IRA or other long-term investments.

5. If your income is irregular, put 10 percent of every paycheck into savings. (Okay, start with 5 percent and work up.) Never put your entire paycheck into your checking account, intending to pay your bills and save whatever is left. There is never anything left! Put money into savings first and then start on the bills.

If you can't save money and also pay your bills, the Great Budget God is telling you something. Keep on saving, and figure out how to get your spending budget into balance. Your future depends on it.