To save money, many people follow these good financial habits. They will help you get the most out of your money.
1. People who save money start now
People who save money start early, point out Janet Stanzak and Kristin Garrett, certified financial planners who run a financial advisory firm.
They want to help people change bad financial habits and develop better ones. The majority of people who know how to save have learned from an early age to plan for bad days. But it’s never too late to learn
2. People who save adopt the right financial reflexes
People who know how to save jump at every opportunity. If there’s a retirement savings plan, they’ll take it, Garrett notes. They never put off financial decisions and the opportunities that come their way.
3. People who save have a retirement account
It’s not a new advice, but financial advisers repeat it: it’s about your future, after all. A golden rule for a retirement account that is worth it? Put 10% of your salary in a savings account each month as soon as possible.
ALSO READ: Planning for Retirement: 10 Common Budgeting Mistakes to Avoid
4. People who save know the difference between a need and a want
One of the biggest lies of our time, according to Stanzak, is that we mistake our wants for needs. “I met so many customers for whom travel, new clothes and restaurants were real needs,” she says. They are not!” Instead, savers know how to recognize their basic needs and differentiate between them and their desires.
5. People who save track their authorized withdrawals
Direct debits make your life easier. Maybe too easy. Direct debits prevent you from really being aware of how your money is flowing, says Garrett. Whether writing a check or manually making a bank transfer, your brain records the expense. These gestures are now rarer, so good savers note all these payments in their budget.
6. People who save stick to a budget
Yes, a real budget. A realistic plan, which they update regularly. This is probably what best characterizes good savers. “The first clue that indicates that a person is prone to financial problems is the fact that they cannot list their monthly expenses and their cash inflows,” notes Stanzak. You can’t save if you don’t first know how much money you have.
7. People who save use cash
It’s not a rule of thumb, but people who save tend to use physical silver. “Studies have shown that people spend up to 20% more when using virtual money like credit cards. Expenses seem less “painful” that way,” says Stanzak. Handing over cash to someone or is a sufficient signal for the brain to block the impulses and for us to spend less.
8. People who save money make saving a priority
It may sound very simple, but people who save money makes saving a priority in their lives, notes Andrea Woroch, a finance expert. “Before spending on anything, these people first make sure they have money set aside for their retirement or for other financial security, such as their children’s education.”
9. People who save money write down small expenses
Small expenses can add up quickly at the end of the month, says Garrett. Before you know it, you might have spent way too much money on small purchases that you can avoid. People who have savings have developed the reflex of writing down all these small sums spent in a notebook or in a checkbook.
10. People who save the most money are on the lookout for good moves
Being a bit stingy becomes a quality when you want to save. People who save put their pride aside and don’t mind using coupons, chasing discounts, and doing a lot of research before buying something. “These people think through every purchase and look for cheaper alternatives before taking action. They buy used or discounted goods most of the time. They collect coupons, compare prices and read buyer reviews for each item before making a decision,” says Woroch.
11. People who save money adjust to the vagaries of life
“You’d be amazed at the amount of people who get divorced, but still spend as much as when there were two salaries at home,” Stanzak points out. No one is immune to a change like this. Jobs are lost, people separate, we can get sick and all these pitfalls can affect our budget. It is important to know how to adjust and that our expenses always reflect our changing means.
12. People who save money accept gifts
Does your employer offer you a discount on your insurance premium if you are closely monitored by a doctor each year? Does the company you work for offer to put money in a retirement account under certain conditions? Have accumulated airline points and not using them? Many people do not take advantage of these small gifts. “It may take you a bit of time sometimes to fill out the necessary forms, but you’ll save big,” says Woroch.
13. People who save money have three to six months of expenses aside
Here is a scary statistic: more than a third of Quebec employees live from paycheque to paycheque. This therefore means that they are only one accident at work or a job cut from serious financial difficulties. It may seem obvious, but people who have savings…save for this too. To properly identify the amount you need to be safe depends entirely on your lifestyle.
Garrett and Stanzak recommend planning for at least three to six months of basic expenses to be on the safe side. It is therefore necessary to plan for the costs of mortgage, insurance, groceries and all the other responsibilities that you have.
14. People who save are honest with themselves
No one is getting any younger, that’s for sure. Yet many people seem to overlook this fact, Stanzak notes. In truth, everyone has a different risk factor that jeopardizes their financial security. People who save are realistic and look the risks in the face: old age, precarious job security, chronic health problems, family problems, etc. It is important to plan ahead to avoid unpleasant surprises.
15. People who save money don’t feel entitled to everything
“Too many people have this attitude of believing they deserve something,” Stanzak confesses. “They tell themselves that they work hard and that they deserve to own such and such a thing.” In reality, if you can’t afford the coveted car or a relaxing day at the spa, you shouldn’t buy it.
16. People who save use online savings accounts and credit unions
Online savings accounts often offer better interest rates than traditional accounts, Woroch says. “People with savings also shop around for the best bank charges and often use credit unions.”
17. People Saving Money Make Saving Easy and Automatic
In the same way that direct debits make it easier to spend when it comes to paying bills, they do you a favor in saving! Scheduling a bank transfer on a certain day every month can help make saving easy and automatic.
18. People who save start with small gestures
It can be daunting to read tips like the ones we’ve listed, and you may be thinking that this is all a lot to ask of you. Saving doesn’t have to be a huge change, says Woroch. “If you start saving, start with small gestures. It’s easier to adapt to small changes than to disrupt your entire financial habits, she explains. Start by scheduling the transfer of a small amount of money weekly and take the time to get used to living with your new budget. Increase this amount gradually. You will continue to develop your savings skills this way.”
