3 Saving Habits to Steal and 3 to Skip

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They pay off their credit cards every month, know where to get the best deal on groceries, and keep a healthy portion of cash set aside for emergencies.

They’re savers. And maybe you’re one of them—or maybe you’re trying to be.

Saving isn’t easy. It takes strong habits to stay on track. And sometimes the same instincts that drive people to save can wind up holding them back.

Here are 3 types of savers and their best habits—as well as the ones that can slow them down. See which type of saver you are, and find tips for becoming a better saver.

The budgeter

Most budgeters don’t buy the overpriced coffee. They track their spending to the penny and know exactly how much they save by brewing it at home. They also know how much their money is earning (even their cash savings).

Habit to steal: Keeping track of every dollar. Budgeters can pinpoint the most effective ways to maximize their long- and short-term savings. They know that small amounts can make a big difference.
A tip for budgeters: If you’re a budgeter, you can save yourself time and headaches by choosing deals carefully. It’s better to go with trusted companies that always give you a fair shake.

The keep-it-simple saver

These savers don’t like spreadsheets. They figure being careful about the big financial decisions means they don’t have to worry as much about the smaller ones. They buy homes and cars they can easily afford, and usually have cash left over every month. If they want that expensive coffee now and then, they feel okay about buying it.

Habit to steal: Automating their savings. These savers often use automatic deductions to set cash aside every month. It makes saving easy and effortless.

Habit to skip: Not sweating the small stuff. Unfortunately, even small expenses can add up and become big ones, so it pays to consider inexpensive purchases carefully too.
A tip for keep-it-simple savers: If you like to keep it simple, but find you’re not meeting your saving goals, here are 2 approaches that can get you on track:
  • Take a spending break. Cut out discretionary spending for a short time (1 or 2 weeks). This can help you break any costly habits.
  • Do a spending check. Review the last 3 months of your credit card and bank statements to identify problem areas. Pay attention to sneaky expenses, like online subscriptions (which tend to go up every year).

The cookie-jar saver

Cookie-jar savers know that every dime counts. But unlike budgeters, they don’t track their spending with a spreadsheet or app. They just don’t spend much. When faced with a choice between an expensive option and a cheaper one, chances are they’ll say, “I don’t actually need it after all.”

Habit to steal: Keeping a healthy emergency fund. These savers keep the recommended 6–12 months of expenses in easy-to-access, low-risk accounts. That way, they feel prepared for just about anything.
Habit to skip: Being too careful. Cookie-jar savers are uncomfortable with risk. They tend to choose familiar, low-yielding places to put their money—like a cookie jar. The problem: Over time, inflation can chip away at the value of that cash. Even at a low 2% inflation rate, $100 this year will be worth the equivalent of $91 in 5 years.
A tip for cookie-jar savers: If you don’t like risk, consider putting your savings into investments such as money market funds. They’re easily accessible and lower-risk than many other investments.
This article was originally published on this site

 

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