The Eight Easy Habits of Super Savers
Whether you are dreaming of early retirement or simply want the confidence that comes from having a financial cushion, your goal is closer than you might imagine. The key is to adopt the habits of the super saver. Here are eight strategies you can consider to gain membership in this elite club.
1. Establish a routine
Many experts suggest establishing a regular savings routine — even if it’s for as little as $50 a month. Get into the habit of saving at a young age. Your chances of sticking to it improve if you have money automatically withdrawn from your paycheck.
2. Start a contest
Devise a chart to track how much progress you're making and post it on a bulletin board. Then whenever you pay off another $1,000 in debt or save another $2,000, do something to recognize that moment and celebrate.
3. Know what you're spending your money on
Spend a few weeks or a month tracking every purchase. You'll be amazed at the amount spent on “trivial” items like a morning latte. You'll find that simply seeing those expenses in black and white can spur you to control your spending.
4. Focus on what you'll gain, not what you're giving up
Rather than feeling that you're doing without by passing up purchases today, super savers focus on what their money will do for them down the road. Being clear on what you want will make it easier to get on the right financial track.
5. Find a mentor
Identify a role model who wants to see you become successful and is willing to share his or her experience — but as a friend, not a professional advisor. The lessons they've learned can provide you with both ideas and inspiration.
6. Use a financial planner
If you'd rather see the dentist than wrestle with finances, consider the benefits of tapping the expertise of a professional. A well-qualified pro can help you evaluate investments and provide an independent assessment of the progress toward your goals.
7. Participate in your organization's retirement plan
With years or even decades to go before retirement, there's no need to panic or make risky moves. In fact, sound, disciplined investing strategies work best over the long run. And the longer you are in the plan, the more you'll benefit later in life.
8. Dollar-cost average
The concept is simple: You make steady contributions at regular intervals. Since it takes the emotion out of investing, you can avoid the temptation to make large contributions to hot investment options or to stop contributing during market downturns. History has shown that people who try to time the market often fare worse than those who utilize dollar-cost averaging. By contributing to your retirement with each paycheck, you stay focused and disciplined.
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