Money-Saving Habits of Successful People
A good saver starts early, says Janet Stanzak and Kristin Garrett, certified financial planners who started Financial Empowerment to help people change bad money habits. Children are often taught to save money for a rainy day, but even those who were not have also learned to take advantage of opportunities. “When they see that they have an option, such as a retirement savings plan through their employer, they take it,” Garrett says. Financial decisions shouldn’t be procrastinated by good savers.”
A Good Saver Has a Retirement Account
Investing between 10 and 15 percent of your paycheck into a retirement account each month isn’t new advice, but it’s worth repeating because this is your future we’re talking about.
Savings Should Be Based on Needs, Not Wants
According to Stanzak, one of the biggest lies we’re told these days is that wants are needs. “I have heard so many clients tell me that travel, new clothes, and eating out are all real needs,” she says. For more money-saving tips, read about the things rich people never waste their money on. Instead, good savers make a list of what they really need and want.
Autopay is Not a Good Saving strategy
A lot of people think autopay makes banking easier, but Garrett says that it makes it too easy for money to flow in and out without a sign. Whether you write out a physical check or fill out an online form, paying your bills intentionally helps your brain remember the expenditure. If you set up autopay, don’t forget to set it and forget it (no late fees, after all!).
At least once a month, check your transactions to make sure the charges are accurate (by the way, these are the bills you should not put on autopay). As Garrett says, good savers keep track of every transaction they make in their budget.
Budgeting is The Key to Good Saving
One of the hallmark money-saving tips from savvy savers is to keep a real, honest-to-goodness chart or spreadsheet that they update and balance regularly. “The first sign that someone has a money problem is when they can’t provide their monthly cash flow,” Stanzak says. Savings are impossible if you don’t even know how much you have.
Cash or Checks Are the Best Ways to Save
It’s not a hard-and-fast rule, but good savers often use physical types of money. The average cash transaction costs $22, whereas the average non-cash transaction costs $112. According to statistics, people spend more money with credit cards than they do with cash. It takes a mental speed bump to slow down many impulse buys when you hand someone cash or write out a check if you’re trying to save.
Saving is a Priority for Good Savers
As a consumer finance expert, Andrea Woroch says that one of the best ways to save money is to simply make saving a priority in your life. In order to have a stress-free retirement, make sure you avoid these retirement budget mistakes. They put savings into retirement accounts or other self-directed savings accounts first.
A Good Saver Keeps Track of Even the Tiniest Details
It’s just a latte here or an app for $0.99 there that can add up to big expenses, Garrett explains. A good saver records all expenses, even the tiniest ones, in their check ledger or budget. This can also help you uncover hidden fees you were unaware you were paying.
Look For Deals If You Want to be a Good Saver
Using coupons, hunting down the best deal, and researching all your options before purchasing are all part of being frugal. In order to make the best buying decision, Woroch advises that good savers research alternatives such as used options, compare competitors’ prices, find coupons, and read reviews in detail before making a purchase. Here are some coupon apps that can save you money and time.
A Good Saver Adapts to Life’s Changes
It’s amazing how many divorcees continue to live the same lifestyle even after they’ve been divorced, Stanzak says. Life changes, such as layoffs, divorces, and illnesses, inevitably affect our budgets. Regardless of how painful it may be to acknowledge, good savers adjust their spending to reflect their new earning or income status.
A Good Saver Takes Advantage of Free Money
You get a discount on your insurance if you get a checkup every year. Does your company offer employee stock options or match your retirement savings? Does your company offer flight miles or hotel points that you don’t use? The paperwork may take a little more effort, but it’s worth it. Many people leave this “free money” on the table.
A Good Saver Has Savings of Three to Six Months’ Expenses
You’re just one bad car accident or layoff away from financial ruin for millions of Americans who live paycheck to paycheck. Good savers are always saving, even though it seems obvious. Depending on your lifestyle, you may need to save at least three to six months of basic expenses like mortgage, insurance, utilities, and food. According to Garrett and Stanzak, savings need to cover three to six months’ worth of expenses.
Honesty is The Mark of A Good Saver
In spite of the fact that none of us are getting younger, Stanzak says that so many people are living in denial of the fact that each of us faces financial risks. The best savers are honest about their risks—advancing age, tenuous job security, chronic health problems, family issues, etc.—and plan their savings accordingly.