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.
3. Don't spend emotionally
Good decisions rarely happen when you're upset, but some long-lasting bad ones can come if you spend while emotional. The phrase "retail therapy" was coined to indicate a spending spree intended to result in a better mood. However, that better mood might soon come crashing down as the bills arrive. Find other ways to lift your spirits, like walking the dog or spending time with friends.
4. Keep your eye on the prize
One of the biggest hurdles for new life-long savers is the commitment. An article in Psychology Today reveals it can take as long as 66 days for a new behavior, like bringing your own lunch instead of buying a meal, to become a habit. So how do you stick with it? Written notes of inspiration displayed where you do your spending (at night on the computer, for example) can help, as can enlisting friends and family to help keep you on track. Think of saving like a new eating discipline and employ the same motivational efforts.
5. Watch for opportunities everyday
No need to be cheap, but ways to eat healthy on a budget or cut back on your phone bill can present themselves at any time, if you're looking for them. Keep an eye out for discounts, promotions and lower-cost alternatives, such as generic medicines. Is anyone perfect? No, even Super Savers slip once in a while when faced with a "got to have it now" purchase. But with time, effort and support, your new savings habit can become second nature.