First Person: Forming Great Money Saving Habits

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There was an interesting article on MSN Money the other day entitled, "How big-time savers do it", and it got me thinking about the characteristics of a good saver. I found that the five characteristics from the article actually match up well with my attitude toward saving and personal finance in general. While I don't necessarily consider myself a "big-time saver", with the housing market collapse and ensuing recession consuming most of my savings, the characteristics of a big-time saver are still there somewhere inside me.

Here are five characteristics the MSN article outlined and how I apply them to my personal money-saving habits.

"No. 1: They started slowly."

I indeed started slowly on my way to bit-time savings. With my first full-time role out of college only paying $9.25 an hour, and having student loans to be paid off, progress was minimal initially. However, by setting small savings goals for myself -- $1,000, $2,000, $5,000, $10,000, and so on -- I was able to gradually increase my savings as well as my savings goals as my income grew until I started hitting levels like $20,000, $50,000, and $100,000…at least until our first home purchase and subsequent sale took it all away.

"No. 2: They read about financial and economic news."

I'm constantly on the lookout for new and interesting news regarding our nation's economy and financial news. I use sites like MSN Money, CNBC (both online and on television), Yahoo Finance, CNN Money, Wisebread.com, and others to get a constant flow of both finance and personal finance, and micro and macro-economic issues to become a more well-informed saver and investor.

"No. 3: They save regularly, often through automated systems."

I saved -- and continue to save -- regularly though both manual and automated systems. In the days before I became self-employed, I made use of regular deductions from my paycheck for savings vehicles such as my 401(k) and stock purchase plans. The remainder of my paycheck went into the bank where I considered it "saved". Once there, it was used to pay regularly occurring bills, but otherwise, any discretionary spending, it would have to come out of my savings. There was not "slush" or "play" fund. It was all considered savings, and this made it harder to spend money on extras.

Even though I no longer have those regular stock or 401(k) plans available to me, I still maintain the same outlook on savings. While margins are tighter now as a self-employed individual, I still consider income as savings until I'm forced to spend it, which means I save first, spend second.

"No. 4: They find saving pleasurable."

No, I'm not some sort of sick sadist, but I do find saving money pleasurable. It provides me with a sense of accomplishment, security, and peace of mind. I'd much rather save than spend, which certainly makes it easier to hit my savings goals, which in turn makes me feel better. I look at it as a sort of game.

Some people play sports or video games to find that sense of accomplishment or achievement. Personally, I find it challenging to save and look to achieve goals in this area of my life rather than certain other areas. It makes me feel good to know that through my saving, I'm not only providing additional financial security for myself but for my family as well. Knowing that I'm working toward bettering their future is more of a motivator than bettering my own.

"No. 5: They began saving as children."

I opened my first savings account at age seven with money I'd accumulated from birthdays, holidays, and my allowance. I got my first credit card in high school (linked to my mother's account so that I could build credit), and also got my first certificate of deposit and government savings bond in high school.

All these things helped further my interest in and enjoyment of saving. Part of enjoying saving -- in my personal opinion -- is understanding saving. Seeing how my money can grow, how I can use it to make more money, and how I can set and fulfill savings goals over time has continued my interest in saving from a child into adulthood, and has taught me the power of continued saving over time.

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Disclaimer:

The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.

Sources:

Palmer, Kimberly. MSN Money. "How big-time savers do it". http://finances.msn.com/saving-money-tips/250561118. February 21, 2013.

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