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How big time savers do it - A plan for success?

How big-time savers do it

Studies show 5 characteristics of people who manage to follow up on their good intentions to save. Here's what they can teach the rest of us.

If saving more money is one of your goals, you're not alone: In surveys, most Americans list saving as one of their top ambitions. But many don't know how to get started.

Saving more, after all, tends to be a big, general goal, and experts suggest that we are more likely to meet our goals if we break them into small, manageable steps. Bringing lunch to work, for example, can be a step toward reducing weekly food costs. Similarly, being more specific in how you plan to save, whether it's from earning more money or cutting back, can also make it easier to take those small steps.

Successful savers often mention five strategies when asked how they manage to put so much money away

No. 1: They started slowly

Overcoming the initial inertia that prevents many of us from saving can be the hardest step. That's why starting by saving just a small amount can get you on the path toward bigger savings. Nicole Mladic, a 30-something communications director in Chicago, couldn't afford to put away a big chunk of her salary when she was in her mid-20s, so she started saving 2%. A few months later, she raised it to 3%, then went to 4%, and she eventually reached her goal of 10%. Today, her net worth is more than $90,000

No. 2: They read about financial and economic news

A survey by HSBC Direct found that people it calls "active savers," -- about one in five Americans -- tend to pay attention to financial news. That might help keep them generally aware of and savvy about money as well as teach them about basic principles of investing

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

Online banking makes this technique easy: Sign up for monthly transfers into a brokerage or savings account. You can also transfer funds directly from your paycheck so you never even see the money, which means you won't miss it. Check in with your human resources department -- you might be able to set up an automatic savings account through your employer in addition to your automatic retirement savings

saving money children

No. 4: They find saving pleasurable

This trait might sound counterintuitive: How can anyone enjoy saving money, since doing so essentially prevents the pleasure of a purchase today? But some people -- especially successful savers -- naturally feel more pleasure while socking money away rather than spending it, since they know they are building financial security and they can spend it someday. If you don't feel this way about saving, you can teach yourself to, by focusing on how much financial security means to you each time you add to your savings accounts

No. 5: They began saving as children

The HSBC survey found that most active savers have been saving money since they were young and that they learned the value of saving from their parents. While adults who didn't receive those lessons can't change the past, they can pass on better lessons to their own children by talking about finances and family budgeting often. Doing so would put them in the minority: A Charles Schwab survey found that only about 20% of parents frequently talk to their teens about family budgeting and spending decisions, and just over half of parents teach their teens how to save regularly

One idea that combines these strategies is to encourage elaborate family discussions about what you will do with all the money you are saving. For example, if your savings goal is to take a family vacation to Belize, children can draw pictures of the rainforest, parents can crunch some numbers, and soon you'll be snorkeling in the coral reefs.

By Kimberly Palmer, U.S. News & World Report

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