We can all probably agree that we wouldn’t mind saving a little more money; we’re human after all. But that’s often the trouble with stepping up our savings game — we’re human. The sales are too enticing. Finances are frustrating. We’re too busy. There’s an entire world to see!
If you dig online for tips and tricks on saving more money, you run across well-worn, cookie-cutter tips and tricks that all lead to the same destination: Save more. The problem with much of the one-size-fits-all advice out there is that it ignores the human element of finance. The biggest factor affecting your savings account balance isn’t how much you save, it’s the method you devise for saving in the first place.
If your strategy for savings conflicts with your personality, you might have a hard time sticking to your plan. Here are some ways to make saving money easier, matched to a few personality types.
THE EASY RIDER
You’re laid back. You like to keep things relaxed, chill. We all aim to keep our stress levels at a minimum, but if you’re a super laid-back person it can be easy to ignore saving; after all, personal finance can invoke anxiety about the future or the present — why make waves, man? What’s more, if the status quo suits you just fine, you may not have a strong motivating force to regularly put cash aside. So long as there’s green in the checking account, no problem!
Pro tip: If you’re the Easy Rider of saving, you’re the perfect candidate for a set-it-and-forget-it approach.
In addition to a checking account, open a separate savings account. Today, in a rising interest rate environment, many banks are making it more lucrative to tuck some cash away and earn interest payments each month. Once that account is set up, ask your human resources department to route a fixed amount of money from each paycheck into your savings account. Once you’ve set this up, your savings plan is on autopilot and out of mind.
THE SPONTANEOUS SPENDER
From spur-of-the-moment road trips to midnight impulse buys from Amazon, making the most of life right now is key for you – even if it costs a few bucks. When the world is your oyster right now, it can be difficult to think about the next 25 years or even tomorrow. That makes saving a little tricky because the benefits often won’t become apparent for years or even decades down the road.
Pro tip: One way to save money while you still get that rush of instant satisfaction is to hunt down sales and discounts on the stuff you buy. It may sound trite, but if you can channel your impulse purchases toward things that are discounted and move the money you save into a savings account, it’s a win-win.
You can also turn your impulse buys into an opportunity to save. There are numerous apps that allow you to round up your purchase total to the nearest dollar, and that spare change will be added to a savings account or an investment portfolio. Over time, 15 cents here and 32 cents there will add up. All the while, you’ll still be enjoying the perks of same-day shipping for that impulse purchase online.
Surprises aren’t your thing. If it wasn’t blocked out on your schedule it didn’t occur and it never will. You’ll never be caught without an umbrella when there’s rain in the forecast. On time means five minutes early. Executing the plan to a “T” is your comfort zone, whether you’re planning a holiday weekend or retirement. If this sounds like you, your finances shouldn’t be any different. You need a rock-solid plan.
Pro tip: As a careful planner, you’re set up well to boost your savings. You might make a really good candidate to work with a financial professional to construct an in-depth, comprehensive plan for your long-term financial goals. Another option, though far less personalized, is to download one of the myriad spending and savings tracker apps. Either way, you’ll benefit from seeing your goals clearly laid out in front of you and your progress tracked continually.
You’re also poised to take a step beyond an emergency fund and 401(k) through your employer. Given your careful approach to the future, it might be a good idea to look at funding a Roth IRA, permanent life insurance, an annuity or other investments to build tax-treatment diversity, which can be advantageous later in retirement.
THE ‘TYPE A’ SAVER
If you’re a typical Type A personality, you’re probably driven by the pursuit of perfection. You’ve got ambition and drive in spades. When it comes to saving money, you may challenge yourself to be the best saver on the block. That might mean living an aggressively frugal existence colored by extreme couponing, haggling, ramen noodle soup and Friday nights shut in with Netflix.
Pro tip: You’re probably going to be in great shape during retirement, but all that penny pinching might prevent you from enjoying yourself today. Create a realistic savings goal that protects your long- and short-term savings goals but be sure to budget some money that’s strictly for fun. So, for the Type A our advice is perhaps a little counterintuitive. But so long as you remain on track toward your long-term goals, don’t shy away from rewarding yourself today.