Are you good at saving money? We rarely save enough money to maintain a reasonable level of financial security. Seniors are often forced to work well into their golden years. Making smart financial choices makes saving money easier. Perhaps a few small changes will enable you to live a financially secure life.
Saving is a slow process and results may not be visible for many years. Over time, your habits influence your results dramatically.
These habits will make you a successful saver:
- The first thing savers do is pay themselves. It is easy to follow our instincts in the wrong direction. Before saving, a lot of us feel obligated to pay off all our bills. Feeling free from financial obligations and bills is a wonderful feeling. But there isn’t much left over at the end of the month for savings. Make it a habit to save a percentage of every dollar you earn or receive. 2% is a good place to start if that’s all you can afford, but gradually increase the amount as time goes on. Do not use this money for anything else.
- Savers save automatically. Simply having the money taken away from your paycheck before you have the chance to spend it is far easier and more effective. Most employers are willing to split your paycheck and send part of it to a separate account. This might be the easiest way for you to save.
- Savers keep their spending under control. Spending less makes saving easier. Review the money you spent in the last month and determine if it was all well spent. In that case, monitor your spending next month diligently. Determine what your spending is costing you. A reasonable expectation is for your long-term investments to return 10% annually. A $100 investment today would be worth nearly $750 in 20 years. The $100 you spent when you were 20 years old cost you nearly $8,850 at 65 years old. Don’t forget to shop with a list. Most of us have gone to the store for a couple of small items and returned with a lot more. Keep a list of what you need and stick to it.
- A saver avoids debt. When you are in debt, saving is like trying to climb up a hill without reaching the top. Having debt makes it impossible to achieve financial goals. If you’re unable to pay cash, you simply can’t afford it. Do not accumulate any unnecessary debt unless it is for an extremely important item that must be paid immediately in an emergency situation.
- All savers have goals. Knowing your reason for saving makes saving easier. Having a goal of a comfortable retirement or sending your child to an Ivy League school can keep you focused.
- Saver’s measure their savings regularly. Many savers are very aware of how much money is in their accounts and how much they have saved and spent. They are in control of their expenses and income.
- In general, savers are financially responsible. Their bills are usually paid on time. Savers are aware of how much debt they carry. There is an emergency fund for the future. Do you know anyone who saves well, but the rest of their finances are a mess? Own up to all aspects of your financial life.
Your retirement and future can be secured by saving enough money. If you develop more efficient habits, you will achieve better results. It takes only a few minor adjustments to start saving. The habits we form determine our lives. Establish habits that support your financial well-being.