6 Habits You Can Learn from Successful Savers

Research shows that 63% of Americans, which can barely cover any emergency; if you find yourself in this category, here are six habits you can learn from successful savers to get your savings to the desired level.

6 Habits You Can Learn from Successful Savers

1. Successful Savers Have Reasons for Saving Money

This is also true when you are saving money with no real purpose of saving; you will start over and over only to reach a particular point and end up spending all your savings on unnecessary things that never served the purpose of achieving a certain financial goal.

When you do not have a reason for saving, then you lose stamina, and you realize that you are right back at the starting point with less than $500 in your savings account.

I presume that to achieve a long-term effect and make saving a regular practice, one definitely has to have a purpose to save. That is, every spare cent must be saved with an intention.

What are some common reasons for saving money?

• Emergencies
• Down payment for a home
• Retirement
• School fees
• Vacation
• New car
• Starting a business
• Pay off debts

Your reasons are your goals. Therefore, with well-planned short and long-term goals, you find saving for a purpose easy to achieve.

Read Also: Grow Your Money Faster: 9 Easy Investment Tips

2. Successful Savers Have a Budget

Successful savers have a budget for how they intend to spend their money. With this budget, they are able to track and ensure that every penny fulfills its purpose.

You can start by making a list of your intended expenditure, and knock out each item on the list according to the order of priority.

Your budget must include savings, which should account for 20% of your total income.

Here are some tips to help you create and stick to a lifestyle of budgeting:

• Make your budget realistic. A realistic budget takes into consideration the cost of items, goods, and services listed in your budget. Also, your budget should include 20% of your income allotted to fun activities.
• Be consistent with your newfound habit of budgeting. You could find yourself derailing from your original budgeting. Hence, it is important to have an e-copy of your budget, a list of items you tend to purchase during shopping, and automated savings to make it easy to stick to your savings habit.
• Track and review your budget and make adjustments in subsequent budgets if need be.

Read Also: 9 Practical Budgeting Tips for Easy Money Management

3. They Automate Their Savings

Lack of financial discipline can make savings a habit quite difficult to stick to. But with automation, savings are easier because the specific amount that you have set to save transfers automatically from your checking account to savings, thus building consistency without having the feeling of needing to spend it.

Saving regularly not only assists you in putting aside money but also simplifies money management, makes you seize the opportunity of compound interests, alleviates your financial pressure, and enables you to prepare for rainy days by setting at least 3 months of expenditure.

Savings get easier because when you automate your savings, the specific amount you have earmarked goes into your savings from your checking account, thus helping you to build consistency while eliminating the desire to spend.

Aside from helping you to save consistently, automating your savings makes managing your money easier, helps you to take advantage of compounding interest, reduces financial stress, and helps you build an emergency fund to cover at least three months’ expenses during rainy days.

Read Also: 9 Financial Habits of Women Who Are Never Broke

4. They Pay Off Their Debt

Successful savers understand that just as compounding interest makes your savings/investment grow, it also makes your debt increase, especially when it is not made as of when due.

Paying off your loan offers you the following advantages:

• It takes away financial burdens off your shoulders. Being heavily indebted makes you worry more about increasing interest rates and the burden of managing multiple loans simultaneously.
• It frees up more funds. Paying off your debt makes more money available for savings. Hence, with all debt paid off, you can increase your savings and achieve your goals faster.
• You save more money on interest. Paying off your debt early helps you to save huge amounts of money as interest payments, especially on high-interest credit card loans.
• It improves your credit rating. Paying off your debt early enough improves your credit rating, which can give you a better chance of getting low-interest rates on mortgages, car loans, and other loan products.

If you have multiple loans and credit card debt to settle, you can consolidate them into one loan. Consolidating your loan means that you take a big loan to clear out multiple smaller loans.

This implies that you’re paying off one debt at a lower interest with a single payment plan, making debt payment easier. Here are the benefits of consolidating your loan

• You get to make one monthly loan payment instead of multiple loan repayment
• You enjoy a lower interest rate
• Debt payoff is faster.

5. They Live a Frugal Lifestyle

Living a frugal lifestyle means that you are able to live within your means, where spending is done within the boundary of your total income.

A frugal existence doesn’t mean that needs and wants are neglected; instead, a frugal existence assists you in making appropriate choices on needs and wants so that your expenditure stays within the planned boundaries of your income.

For a person who does not spend too much, receiving a salary increase will imply that you get more cash to save and also draw closer to achieving your set financial objectives rather than having to increase your quality of living by bearing costs such as renting a larger house, replacing the old but working car, going for more costly holidays, etc.

The intention of frugal living is to help you stay out of debt, cater to the needs of your loved ones, which can include paying tuition, increase your savings, make you resourceful and intentional with your spending, prepare you for emergencies, and help you to attain financial freedom earlier than you imagine.

Read Also: 7 Signs that you’re Financially Smart

6. Successful Savers Build an Emergency Fund

Successful savers build and maintain an emergency fund to cover three months of living expenses to prevent them from tapping into their savings or investments to solve emergency needs like home repair, medical bill payment, accident coverage, and car repairs.

With consistency in saving, you can imbibe the habit of building and maintaining an emergency fund to enjoy the following:

• Empowers you to handle and manage uncertainties and unexpected situations
• Shields you from sudden economic downturn
• Prevents you from liquidating your long-term investments
• Gives you financial flexibility.

Conclusion

Making savings a lifestyle helps to impact your life positively by making it possible to live a fulfilling life.

You get to achieve your goals faster, reduce heavy dependence on credit facilities, build wealth, and enjoy financial freedom and flexibility.

Read Also: How to Be a Rich Girl: 7 Financial Tips Every Woman Should Know