Better money habits: become a successful saver

Help build a stronger financial plan today with these five ideas.

Woman sitting at table looking at bills.

Who needs help improving their money habits? Almost everyone, it turns out. A 2017 survey by the online employment website CareerBuilder indicated that 78 percent of U.S. workers live paycheck to paycheck, including nearly one in 10 workers making more than $100,000 a year.

That doesn't surprise Katherine Fibiger, a certified financial planner in Westport, Connecticut. "I live in an affluent area, and I work with people who make a lot of money,"she says, "and it is 100 percent true that it's the mind-set and habits of a person, more than their income, that makes them able to save."

What do successful savers know that you can use to create better money habits? Start with these five ideas.

1. Focus on savings first

"Most people spend first and then assess what's left or where to trim", Fibiger says. "Successful people have learned to flip that around and say, ‘What is it that I want to save for and how much do I need to save in order to reach my goal?' That approach ensures that you're putting away money first and spending what's left."

2. Make your goals specific

Successful savers have drilled it down and know what they want, when they want it and what it'll take to get there. That helps with the harder task of sacrificing day to day, such as the ability to track expenses and establish a budget. "If you know that by spending that dollar today, you aren't going to be able to buy the house you want for six years instead of five, you're more likely to save it,"Fibiger says.

3. Track expenses

Budgeting can be painful, but it reveals where small expenses are adding up. That doesn't mean you have to drop your daily latte. "But if you add it up and see that you're spending $1,800 a year on it and that bothers you, maybe you'll decide to get it three times a week instead of every day", she says.

4. Put savings on autopilot

One idea: Set up your bank account to regularly transfer a designated amount into a second account with an online bank or credit union. "You want it to be a little less accessible,"Fibiger says. "Somewhere that's separate from your day-to-day savings account, where you can switch it over to checking at the ATM."

5. Know yourself

Successful savers aren't all frugal by nature, but they know who they are. "It's like going to the gym", Fibiger says. "Some people are diligent about it; others need a personal trainer."Consider an online savings group or a certified financial planner with fiduciary obligation to help ensure you're receiving advice that's in your best interest.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.
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