5 Habits of Successful Savers

There are some people who are expert savers. They seem to always have enough money for that rainy day. But putting cash aside remains a challenge for many of us, even though we all know that calamities happen – puppies get sick, jobs get lost, hurricanes damage homes. And maybe, just maybe, we’d like to retire someday.

It all takes savings. Yet many of us are woefully unprepared. In a 2015 Federal Reserve Board survey, 47% of respondents said they could not or would need to borrow or sell something to cover an unexpected $400 bill. That’s a scary statistic, and it poses the question: What can we do to strengthen our abilities to save? What do successful savers do?

Here are few habits these individuals typically have that you could implement.

1. They Make Saving 15% to 20% a Priority in Their Budget

This means, even if they have cook more homemade meals, stay in some nights to watch movies with friends, or walk instead of paying for gas and carfare, they carve out where they can save and stick to it.

“You should be saving 15% to 20% of your gross income,” Jay Hochheiser, certified financial planner and president and owner of Hochheiser & Deutch, said. “Every salary check, every draw check, every time you get paid you should be putting aside and saving 15-20% of the gross amount you were paid before taxes and other deductions were taken out.”

2. They Pay Themselves First

Hochheiser said he often sees his clients ignoring one of the most basic fundamental rules to saving: they aren’t paying themselves first. It can seem heartless to tuck money into savings that could be spent to help someone else, but in order to save effectively, you need to stick to your savings plan. Have 15% to 20% automatically pushed into a separate account each month by setting it at your bank, then pretend the money doesn’t exist. You’ll likely need it sooner than you think: 49% of Americans surveyed retired earlier than they ever expected to due to job losses, illnesses or caregiving responsibilities, according to a retirement confidence survey from the Employee Benefit Research Institute.

3. They Track Their Expenses

Do you really know where your money is going? Make a list of the frequent bills you need to pay monthly, annually, and sporadically, then track everything you’re spending on each month, according to Tracy Layden, a certified aging-in-place specialist and marketing manager at Alert-1, a medical alert company.

“Go through your charges and think about if you really need the thing you bought. Is there any way to spend less on that item? Small, regular charges (such as your daily coffee) can add up. Try making your coffee at home instead,” Layden said. And keep an eye out for sneaky recurring charges for services you no longer use, she said.

Then make a list of your financial goals so you know what you’re saving for. Make them specific, quarterly and yearly.

“Just the act of writing them down will increase the likelihood you’ll achieve them,” Layden said. “Put them in your wallet and display them by your desk so you always have them in mind.”

An added bonus is that you’ll soon have money to pay all of your bills on time, which gives you a better credit score and works to your advantage when you need a loan or want a mortgage to buy your dream home. (You can keep track of two of your credit scores for free, updated every two weeks, on Credit.com.)

4. They Make Automatic Increases to Their Savings

Sometimes, it lessens the squeeze if you slowly tighten your belt.

“We know we need to save a lot of money for retirement; but knowing that very fact can make it even harder to get started,” Lauren Zangardi Haynes, a certified financial planner at Evolution Advisers, said.

Rather than diving in and getting started, many of us do nothing and hope the problem will magically go away. Start saving a small amount now and set a reminder on your phone every two to three months to increase your savings by a small amount until you reach your savings target, she said.

“For example, sign up for your 401K and put 2% of your pay in the account. In two months, sign into your 401K account and increase your contributions by 1% of your pay,” Zangardi Haynes said. “Keep this up until you reach your goal, for example, putting 12% of your pay into your 401K.”