Are you a saver or a spender? You might think the preference to be a saver or spender is hard wired from the time you’re born, but there are actually several things you can do to make saving more natural if you’re a spender. There are also strategies you can use that will help your children become savers and set them up on the path to wealth.
Many savers have a number of habits in common. If you don’t do these things yet, why not start now? Perhaps, you, too, can become a regular saver:
1. Save, even if it’s a small amount. Some experts recommend saving 10% of your income at least, and if you can do that, great. However, if you can’t save that much, don’t despair. Any bit you can save will help you in the long run. Perhaps start with what you are able to save, even if it’s only 1% of your income. After 12 months, if you make $50k a year, you’ll have $500 saved. Sure it’s not a lot, but it’s better than not saving anything. As your financial situation improves or you get used to the discipline of saving, you can bump up to perhaps 2% or 3% until you reach at least 10% of your income.
2. Make it a priority. Simply put, you won’t save if you don’t make it a priority. Many financial experts recommend putting money in savings before you pay any of your bills for the month. Savings then becomes a priority and not something you do if there is any money leftover. (Let’s face it, for many natural spenders, there’s never any money leftover, which means saving must come first.)
3. Automate your savings. This is, in my experience, the most painless way to save. Go to your payroll department, fill out a direct deposit form, and have a certain amount automatically withdrawn and put into your savings account each paycheck. After a few weeks, you’ll forget about the money that’s being deposited, but your bank account will be slowly growing. I did this a few years ago when I was employed outside the home, and we easily adapted to our smaller paycheck and didn’t feel the sting when the money was put in a savings account..
4. Start saving at a young age. The younger you are when you start saving in a disciplined way, the better. If you’re 40 now, that doesn’t mean it’s too late for you, but only that it may be a bit harder to develop the discipline to save regularly. It can be done, though. To give your kids an advantage over their peers, start having them regularly save now. They’ll likely develop a lifelong savings habit.
5. Know how to find the bargains and do without. The less money you spend, the more you’ll have to save. That doesn’t mean you’ll have to do without. Instead, just learn how to get what you want for less. Instead of buying a new car, buy a used one so you can avoid a car payment and the interest that goes with it. Learn to take advantage of sales and promotional discounts.
Use these techniques, and soon, even if you’re a natural spender, savings will feel normal.
Are you a natural saver or spender? If you’re a saver, what strategies do you use to maximize your savings?