Saving money is a skill mastered by those who practice mindful habits and disciplined financial strategies. Whether setting aside a portion of their income or making intelligent spending choices, people who excel at saving money have developed a range of practical and effective habits. From budgeting wisely to embracing frugality, these individuals showcase the traits of financial responsibility that pave the way to a more secure future. In this article, we’ll explore 19 habits of people who have become experts at saving money.
Good Savers Have Three to Six Months of Expenses Saved
In the face of a startling statistic, 56 percent of Americans teeter on the edge of financial uncertainty, living paycheck to paycheck. A single unfortunate event, such as a car accident or job layoff, could put millions into financial ruin. Amidst these uncertainties, good savers exemplify prudence by building a safety net. The ideal savings amount varies based on individual lifestyles. Yet, Kristin Garrett and Janet Stanzak advocate having at least three to six months’ worth of funds to cover essential expenses like mortgage, insurance, utilities, and food, providing a crucial buffer against unforeseen challenges.
Good Savers Are Honest With Themselves
As time relentlessly marches forward, the inevitability of aging becomes evident to all. Janet Stanzak observes that many shy away from this reality, living in denial. However, the wise path to financial security lies in embracing honesty. Good savers courageously confront their unique risk factors related to advancing age, job stability, health concerns, and family dynamics. They strategically plan their savings to safeguard against potential challenges and uncertainties.
Good Savers Do Not Feel Entitled
Janet Stanzak raises a thought-provoking concern about the attitude of entitlement prevailing in our society. Many fall into the trap of deserving luxuries solely based on hard work. However, she reminds us that financial wisdom calls for prudence. True affordability should govern our spending decisions, whether a luxurious car or a day at the spa, as our hard work and feelings alone shouldn’t determine our purchasing choices.
Good Savers Use Online Savings Accounts and Credit Unions
Andrea Woroch points out the allure of online savings accounts, which often boast higher interest rates than traditional brick-and-mortar banks. Diving deeper into the art of saving, good savers exhibit a prudent approach by shopping around to evade bank fees and, at times, opting for credit unions. Equipped with this knowledge, they navigate their financial landscape strategically, knowing precisely when to avoid credit card payments and make informed choices that fortify their financial standing.
Good Savers Make Saving Easy and Automatic
Just as automatic bill pay eased the burden of settling bills, the same principle applies to savings. Janet Stanzak highlights the power of automating savings—whether through scheduled transfers or modern savings apps like Digit—to make setting money aside seamless and painless. Embracing this approach, good savers effortlessly build their nest eggs, transforming saving into a gratifying and stress-free endeavor.
Good Savers Live Below Their Means
Wise savers understand that possessing the means to spend doesn’t necessitate indulging in every desire. Instead, they embrace living below their means as a potent strategy for securing a brighter future. For instance, refraining from impulsively acquiring a new car when the current one remains reliable demonstrates prudent restraint. Similarly, considering downsizing to a more modest and cost-effective living space unlocks opportunities to free up financial resources and bolster monthly cash flow. Good savers pave the way toward financial security and stability by making mindful choices and prioritizing long-term goals.
Good Savers Know When It’s Time to Pick up a Side Gig
Champion savers embrace fierce honesty when it comes to their income. With a clear understanding of their financial capacity, they determine how much they can allocate for monthly savings and assess whether additional earnings are necessary to achieve their goals. Should the need arise, they eagerly take on side gigs, opening doors to unforeseen possibilities. In the realm of opportunity, a side gig may evolve into a fulfilling full-time career, presenting an inspiring testament to the rewards of financial diligence and foresight.
Good Savers Take Free Money
In employee benefits and perks, valuable opportunities often go untapped. Andrea Woroch highlights the rewards waiting to be claimed, from insurance discounts for annual check-ups to stock options and retirement savings matches. Yet, many overlook these enticing offerings, leaving potential “free money” unclaimed. While it might require a bit of paperwork, the effort is undoubtedly worthwhile, unlocking the hidden potential of these benefits and optimizing one’s financial gains.
Good Savers Start Small
In personal finance, encountering lists of money-saving tips might initially seem daunting, leading some to surrender in defeat. However, Andrea Woroch offers an encouraging perspective—the journey towards saving need not be overwhelming or require drastic alterations. Instead, she advocates for a gentle and gradual approach, starting with small, automated contributions weekly. As this routine settles comfortably into one’s life, the incremental increases further nurture a burgeoning savings habit, culminating in a powerful transformation towards financial security and a brighter future.
Good Savers Start Now
According to Janet Stanzak and Kristin Garrett, certified financial planners at Financial Empowerment, good savers begin early and maintain a proactive mindset. Some were taught the importance of saving from a young age. In contrast, others have embraced the habit later on, seizing opportunities like retirement savings plans. The key lies in taking action promptly and avoiding procrastination, as these savvy individuals understand the value of making sound financial decisions for a more secure future.
Good Savers Adjust for Life Changes
Janet Stanzak reveals a remarkable truth: many individuals continue living their pre-divorce lifestyle even after separation. However, significant life events like job layoffs, divorces, or illnesses unavoidably impact our financial plans. Good savers bravely confront reality, adjusting their spending to match their new earnings or income status, even if it means facing discomfort. In pursuing financial balance, they proactively explore ways to negotiate household bills, effectively trimming everyday expenses and securing a more stable future.
Good Savers Prioritize Saving
According to consumer finance expert Andrea Woroch, the key to successful money-saving is making it a top priority in life. The best savers habitually pay themselves first, directing savings into retirement or self-directed accounts before other expenses. By embracing this proactive approach, they pave the way for a secure and stress-free retirement—a valuable lesson for a lifetime of financial freedom. Avoiding retirement budget mistakes further reinforces their commitment to a sound financial future.
Good Savers Look for Deals
In saving, frugality plays a pivotal role, and adept savers embrace it humbly. Unafraid to seek out coupons, scour for the finest deals, and thoroughly research every purchase, they navigate the shopping landscape thoughtfully. Andrea Woroch emphasizes the importance of this approach, advising that good savers meticulously analyze alternatives, consider used options, compare competitor prices, and delve into reviews to make informed buying decisions. Embracing the quest for savings, they also explore helpful coupon apps that streamline their economical and efficient shopping journey.
Good Savers Have a Budget
Among the seasoned money-savers, a noteworthy hallmark is the use of old-fashioned charts or spreadsheets, faithfully updated and balanced regularly. Janet Stanzak attests that those who struggle with money often face challenges in tracking their monthly cash flow. Understanding the crucial link between awareness and savings, good savers rely on this fundamental tool to grasp their financial standing and forge a more secure future.
Good Savers Use Cash or Checks
In saving, Janet Stanzak highlights a fascinating observation—good savers often gravitate towards using physical money. Research supports this notion, revealing that people tend to spend more when relying on credit cards compared to cash. Surprisingly, average cash transactions amount to $22, while non-cash transactions soar to $112. Recognizing the value of mindfulness, handing over physical cash, or writing a check acts as a mental speed bump, effectively curbing impulsive spending—an insightful tactic for those on a quest to save.
Good Savers Keep Track of the Little Things
It’s the seemingly inconsequential expenses like a latte or a $0.99 app that can quietly accumulate, warns Kristin Garrett. These little expenditures can quickly snowball into high costs, catching us off guard. Wise savers, however, diligently record every expense in their check ledger or budget, no matter how small. This practice fosters financial awareness and reveals any hidden fees that may have gone unnoticed, empowering them to take charge of their finances with clarity and precision.
Good Savers Don’t Rely on Autopay
The convenience of autopay is undeniable. However, Kristin Garrett cautions that this ease can lead to money flowing in and out without us truly grasping its impact. Mindful financial management involves intentional payment, whether through physical checks or online forms, ensuring our brains register the expenditure. While autopay can help avoid late fees, Garrett advises against setting it and forgetting it. Regularly reviewing transactions ensures accuracy and provides a deeper understanding of spending, complementing the habit of recording all transactions in a budget—a vital practice embraced by good savers.
Good Savers Know the Difference Between Wants and Needs
In a world of consumerism and instant gratification, Janet Stanzak sheds light on a significant deception: the blurring of wants and needs. Countering this prevalent misconception, she emphasizes distinguishing true essentials from desires. Good savers take a thoughtful approach, compiling a list encompassing their fundamental necessities, aspirations, and grand dreams, navigating their financial journey with a clear vision and purpose.
Good Savers Have a Retirement Account
Amidst the vast array of financial advice, this timeless counsel carries remarkable weight for your future security. Reverberating through the wisdom of countless financial advisers, it underlines the essence of safeguarding your financial well-being. The fundamental lies in committing 10 to 15 percent of your monthly paycheck to a dedicated retirement account, a step that holds the potential to shape a stable and fulfilling tomorrow. Your future deserves this thoughtful and proactive approach to financial planning.
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