7 Proven Savings Habits Will Help You Reach Your Financial Goals


“If you’re a saver now, you can earn 3%, 4%, or 5%,” he says.

3. Set ambitious goals

High-performing savers think big and their goals have increased significantly over the past two years, according to the Principal study.

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Almost all of those surveyed – 95% – raised their goal to feel more financially secure and to hedge against future inflation. Although having $1 million in hand is often touted as a benchmark for retirement, 29% of Gen X super savers and 35% of millennials say they aim to have at least $3 million .

Setting a goal is one thing; funding it is another. One way to do this is to maximize tax-deferred contributions to a retirement savings plan. In 2023, the IRS set contribution limits at $22,500 for a 401(k) and $6,500 for an IRA. If you’re 50 or older, you can make catch-up contributions that increase those limits to $30,000 and $7,500, respectively.

4. Live — and spend — simply

The main study found that top savers are strategic in how they spend. They are content to drive older vehicles or own a modest home. They travel less often than they would like, don’t have credit card debt and go DIY for household projects. Seventy percent have an emergency savings account with enough funds to cover at least three months of expenses.

But not living like a prince doesn’t mean you have to live like a pauper. Being thrifty in some areas makes super savers more comfortable splashing out in others, like dining out regularly or taking luxury vacations when they really want to. More than half of key informants cited being able to splurge whenever they want as the reason financial security is important to them.

5. Put savings first

“Most human beings spend what they need, and then they think, ‘Do I have anything else left to save?’ Reddy said. “Super savers, one of the things that’s innate to them is that they prioritize savings first and then they spend everything else.”

This means building savings into your budget, just like you do with bills. Know how much you can set aside each month and stick to it. If you’re mid-career, “you probably have more disposable income now than you ever had in your life” and you can save more, Reddy says.

Putting savings first also means resisting the temptation to make early withdrawals from retirement accounts to cover big expenses like a dream vacation or a child’s tuition. Reddy recommends approaching these things in a way that allows your retirement funds to continue to grow. For example, if your child takes out a student loan, you can help them pay it off over time. Postpone that big trip until you’ve saved enough money to cover it.


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