7 habits to make you an effective saver
Saving money effectively is about more than not spending it. You need to build habits to ensure you spend wisely and put your money to work for you. Follow these steps and you’re on your way to becoming a savings rock star.
Have goals in mind. Sure it’s great to save, but having savings goals creates determination and drive to reach that finish line. The goals can be big, like buying a home or having a six-figure retirement nest egg. Creating smaller goals can help you build the habit, like getting front-row tickets to a concert, eating at an expensive restaurant, or doubling your charitable giving for the year. If there’s more than one person in the household, make sure you’re goal setting as a family. It’s easier to save when everyone is on the same page, and you can create fun challenges to keep the momentum going.
Don’t shop on emotion. Retailers have huge display windows at the front of the store to get you inside and convince you to make a purchase. If you budget for a splurge now and then, that’s OK, but if you’re always buying things based on your emotional need, it might be time to rein that in. Creating a budget can help keep you focused. Also consider curbing the desire to upscale a purchase. Just because you can get a double shot of espresso, is one enough? Does your new car need every bell and whistle or can you put that money to good use somewhere else? Every decision has the potential to increase your savings.
Automate your savings. When you never see it, you aren’t likely to spend it. If you direct deposit your paycheck, you can have a portion of it automatically go in to a savings account, a money market account – even an IRA. If you don’t have direct deposit, you can set up a recurring transfer from one account to another by filling out a form in any of our banking offices or set up the transfers through online banking.
Keep your lifestyle in check. As you make more money, your lifestyle tends to follow a similar upward trend. That’s because it’s easy to spend more when you make more. But instead of spending the money on going out more or better furniture, decide to invest in yourself or your financial goals.
Be vigilant looking for deals. Clip or download coupons. Be knowledgeable about the best time of year to buy big-ticket items like cars, electronics, appliances and more. Don’t be afraid to ask for a discount or deal on just about anything. You can save hundreds, perhaps thousands, of dollars every year.
Build an emergency fund. Nothing can rob your planned savings faster than an unexpected crisis. By having funds set aside in addition to your savings, you can protect your future goals and avoid falling into debt.
Choose the best savings option. There are different ways to save, and it’s important to pick ones that fit your needs and goals. If you plan to use your savings in a year or two, it’s best to keep the funds in an account that doesn’t have lengthy time or age restrictions on withdrawals. If you plan to hold the money until retirement, you can consider options like a traditional or Roth IRA that have the potential to get a better return than a typical deposit account. Always take advantage of “free money,” like an employer match to your 401(k) contributions up to a certain percentage. You can also save money while you’re spending by getting a cash-back rewards credit card.
Our bank can play an integral role in how, when and where you save. Let’s discuss your goals so we can show you the best options to meet them. Visit us anytime or give us a call at 937.324.6800 to set up an appointment.