Saving money for a specific near-term goal, say a dream vacation or a home, can be easy. You know what you want, you know about how much you need, and you know when you need it. Becoming a lifelong saver, however, requires a bit more discipline and a commitment to changing spending habits.
According to the Consumer Federation of America, just half of Americans think they have good saving habits and are prepared for the future. Saving for tomorrow is a necessary evil some seem to have difficulty embracing, so instead of making a short-term goal, ask yourself how do really effective everyday savers do it? Below are five habits super savers adopt:
1. Know how much money you have
It sounds simple, but are you keeping track of each penny? Many rely upon online banking to do the work, but consider the importance of balancing your checkbook: You may catch checking account errors the bank might not, you can note fees erroneously charged to you, and you can have an immediate balance that accounts for all expenditures and deposits in real time.
2. Choose the right savings vehicle
The highest interest rate is appealing, but smart savers have their money in account types that makes the most sense for their lives. Traditional savings accounts, money market accounts and CDs all offer a return on your investment, but at different rates, and with different penalties for accessing your money. Make sure you allocate your savings appropriately so that you gain the highest return on funds you are least likely to need in the short-run while preserving access to other cash to handle unexpected bills.