Retirement Income

17 habits of people who are great at saving money

17 habits of people who are great at saving money

Good savers don’t procrastinate

Good savers start early, say certified financial planners Janet Stanzak and Kristin Garrett. Many good money savers were taught as children to put away for a rainy day, but even those who weren’t have learned to jump on an opportunity. “Good savers don’t procrastinate financial decisions,” Garrett says.

If your employer is not paying you Superannuation, a good rule of thumb is to put 10 and 15 per cent of your pay each month straight into a retirement or Super account.

Good savers know the difference between wants and needs

One of the biggest lies we’re sold today, Stanzak says, is that wants are actually needs. “I’ve had so many clients try and tell me that travel, new clothing, and eating out are real needs. They’re really not.” Instead, good savers actually write down a list of their basic needs, their wants, and their big wishes.

Good savers don’t rely on autopay

Autopay makes paying bills easier – in fact, it makes it too easy for money to flow out without you really registering what’s happening. Whether you pay by BPay or via another online transaction, intentionally paying your bills makes your brain note the expenditure. If you do set up autopay (no late fees, after all!), make sure you don’t just set it and forget it. Check the transactions at least once a month to make sure the charges are accurate and get a good sense of what you’re spending. Even better, Garrett adds, good savers write all those transactions down in their budget.

Good savers make saving easy and automatic

Autopay allows you to forget the pain of paying your bills, right? Well it works the other way too. Automating your savings account, either through an automatic transfer on a certain day each month or through using a savings apps, can take the sting out of saving, says Stanzak.

Good savers have a budget

Yes, a real, honest-to-goodness written chart or spreadsheet that they update and balance regularly is one of the trademark money-saving tips from savvy savers. “The first clue you have that someone has a problem with money is when they can’t provide their monthly cash flow,” Stanzak says. You can’t save if you don’t even know how much money you have to begin with.

Good savers use cash

This isn’t a hard-and-fast rule, Stanzak says, but good savers often tend to use physical types of money. Research shows that people can spend more money with credit cards versus paying with cash. Statistics show that the average non-cash transaction is $100 more than a cash transaction. If you’re trying to save, handing someone a wad of cash provides enough of a mental speed bump to slow down many impulse buys.

Good savers prioritise saving

Good savers prioritise saving

It sounds simple, but one of the best money-saving tips is simply making saving a priority in your life, says Andrea Woroch, a consumer-finance expert. “Before spending on anything else, they pay themselves first by putting savings into a retirement account or other self-directed savings account,” she says.

Good savers keep track of the little things

What’s a cup of coffee here or a $2 app there? Little things can add up to big expenses quickly, Garrett says, often before you even realise what’s happening. Good savers will write down, in their ledger or budget, all their expenses, even the tiniest ones. Doing this can also help you track down hidden fees you had no idea you were paying.

Good savers look for deals

Being frugal is a big part of saving money. And good savers are not too proud to use coupons, hunt down the best deals, or research all possible options before buying. “Good savers think through each purchase and research alternatives like used options, compare competitor prices, look for coupons, and read reviews in detail to make the best buying decision,” Woroch says.

Good savers adjust for life changes

“You’d be amazed at how many people get divorced but keep living their married lifestyle,” Stanzak says. Big life changes, like job layoffs, divorce and illness, inevitably affect our budgets. Good savers amend their spending to reflect their new earning or income status regardless of how painful it is to acknowledge.

Good savers take free money

Does your employer give you a discount on your health insurance for getting an annual check-up? Does your company have employee stock options or offer to match your retirement savings? Do you have flight miles or hotel points accrued that you’re not using? Many people leave this so-called ‘free money’ on the table, Woroch says. It may take a little extra effort to fill out the paperwork, but it’s worth the time.

Good savers have three to six months of expenses saved

Many people live pay to pay, which means millions of people are just one bad car accident or layoff away from financial ruin. It may sound obvious, but good savers save. How much savings you need depends entirely on your lifestyle, but Garrett and Stanzak recommend having enough money to cover at least three to six months of basic expenses like mortgage, insurance, utilities and food.

Good savers are honest with themselves

None of us are getting any younger. Yet so many people live in denial of this fact, Stanzak says. The truth is that each of us has risk factors that could affect financial security. Good savers are honest about their particular risks – advancing age, tenuous job security, chronic health problems, family issues,  – and plan their savings to account for them.

Good savers do not feel entitled

“Too many people have this attitude of entitlement,” Stanzak says. “They get caught up in ‘I work hard, so I should have this because I earned it’.” But if you can’t afford a nice car or a day at the spa, you shouldn’t buy it, no matter how hard you work or how strongly you feel you deserve it.

Good savers live below their means

Good savers live below their means
Just because you have money to spend doesn’t mean you should spend it. Good savers know that living below their means can help them save more for the future. For instance, just because you can afford a new car doesn’t necessarily mean you should buy one. If your car is in good shape, use it for as long as you can. Another way to live below your means may be to downsize your home.

Good savers know when it’s time to pick up a side gig

Good savers are brutally honest about their income. They know how much they can afford to put away each month, and if they need to make more money to reach their savings goals. If need be, they pick up side gigs to help them meet their goals.

Good savers start small

It can be easy to read lists of money-saving tips like this and feel completely overwhelmed and throw in the towel. But saving doesn’t have to be a huge change, Woroch says. “If you’re new to saving, start small. It’s easier to adapt to a small change than a complete life overhaul,” she explains. “So begin by automating a small amount each week and when you become accustomed to saving that amount and living off what you have left, increase it by a little. You’ll continue creating a better savings habit each time.”

This article was originally published on Reader's Digest. Click here to read the original article.

Image: Getty Images

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