Could you improve your money habits?

“The habit of saving is itself an education. It fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.” – T.T. Munger

Please re-read the above quote from T.T. Munger. Empowering, isn’t it?

Here’s the truth: saving money is hard – which is why most people don’t. According to studies, up to 75 percent of Americans live paycheck-to-paycheck. Living in such a manner is a form of self-inflicted torture. We stress and stress about making ends meet when, in reality, we are the ones at fault. Or, we haven’t learned how to allocate our money appropriately.

(This coming from an average saver, at best. Things don’t change on my end either, folks!)

People who save their money are a distinct breed. Their mind simply works differently. Speaking of mind, saving money has nothing to do with one’s intelligence; it’s not even about income. Saving money is having a plan to live at or below your means – whatever those means may be – and sticking with that plan.

So, what do the best savers do? How do they look at things?

Here are 15 things people who are good at saving money do differently:

1. They live simply

Savers love to live the simple life. Why? Because they could care less about the “latest and greatest” or how others perceive them. They’re happy, and part of the reason they are happy is that they know where their money is going.

2. They distinguish wants from needs

Separating wants from needs is another way of living simply. It’s common for a good saver to ask themselves “Do I really need this?” before buying something. Besides, tip #3 allows them to buy what they do want, on occasion. Speaking of which…

3. “Budget” isn’t a scary word

When some people hear the word budget, they freak out. People great at saving don’t see a budget as scary; they view it as a necessary and even enjoyable part of responsible living.

4. They look for “free money”

Who says there’s no such thing as “free lunch (money)?” From coupon-clipping to 401k matching, money savers do the less-sexy things that give them a financial peace of mind.

5. “Every little bit helps.”

Gosh, how many times have we heard this saying over the years? There’s a real reason we have. Say you’re able to save 10 bucks a week from your check – not an unreasonable amount of money. In a 2% yearly interest savings account, you’ll have saved roughly $530 in just one year. Compound the interest over multiple years – and you’ve got a sizable sum of cash.

6. “Cash is king.”

Some good savers leverage the perks of credit cards, but not many. Research shows that purchasing something with a card – even a debit card – is much less ‘painful’ than handing over a bunch of bills. This latter point is exactly why savers prefer cold, hard cash.

7. Savers adjust to circumstances

None of us are immune to a stagnant economy, rising costs of living, job layoffs, illness, etc. Good savers have a trained ability to adjust their spending (thus, their savings) by taking life’s punches while remaining steadfast to their money mindset.

8. They’re honest with themselves

Self-deception isn’t at all conducive to saving money. That’s why good money managers are honest with themselves. They know their “situation” well and face it head on without losing focus on their priorities.

9. They love credit unions

Credit unions are not-for-profit and are not beholden to the interests of stockholders on Wall Street. Credit unions are owned by its members. Thus, there’s less profit motive for the institution – and more benefits for members (e.g. lower interest rates, lower fees, etc.)

10. Newer savers start small

There are two reasons why people don’t save money: lifestyle and overwhelm. Many people try to maintain an unaffordable standard of living, which is quite foolish. Others complicate things too much and become overwhelmed; often quitting before they even begin. Even 10 extra dollars in the bank at the end of the month is a good start! You can do it!

11. They automate their savings

Many employers offer direct deposit – and most employees take advantage. Good savers allocate 5 to 10 percent of the net pay to a second account – a savings account. And that account isn’t touched unless absolutely necessary.

12. They make money work

We all work for a living because it’s a necessity. Work = money = comfort. Smart savers know the “tricks of the trade,” and make money work for them. Interest-bearing accounts, low-risk investments, government bonds, purchasing gold, renting out luxury real estate in Mijas Spain…these are just a few ways savers save more.

13. “I’m entitled to nothing.”

This is exactly how savers think and feel. Nobody owes them anything – and they like it that way. They don’t “deserve” a vacation or a newer-model car. The only thing they feel entitled to is hard work and sacrifice. Their reward? Financial security and personal freedom.

14. They have little to no debt

Aside from perhaps their home, smart savers have little to zero debt. Debt means less saving, more spending – and they aren’t having it. They could care less about their decade-old vehicle or some flashy credit card. They’re living free.

15. They have willpower

We all have to face temptations, especially in a consumer-driven world. Good savers are human, too. Establishing and maintaining healthy saving habits can be hard, but they’ve got some extra willpower in the bank also.