Saving Matters: How Behaviors Can Lead to Financial Success
It is certainly no secret that the economic climate of the last several years has highlighted the importance of prudent personal financial management. But what may surprise you is that how we cope with our finances is not just a product of the economy, but may also be the direct result of societal, behavioral and even familial influences.
Many factors can influence our approach to finances and impact the savings choices we make in both the short- and long-term such as:
- Cultural aspects
- Parental and societal impacts related to our upbringing
- Possibly even birth order
One study discovered that a successful saver’s profile is likely to have the following attributes:
- Positive early memories of money and saving
- Saving viewed as an identity, rather than an action
- Independent, optimistic, realistic and in charge of their future
The methods we choose to budget, save, and administer our financial lives can be tied to our past experiences and may be traits hard-wired into our personalities, but it is really how we respond to and incorporate those elements into our savings strategies that determines whether we have future financial success.
Armed with that knowledge, you start improving your savings profile by:
- Taking steps to improve your overall financial literacy
- Making saving a priority
- Setting and prioritizing financial goals
- Understanding where you spend the money you earn
Although retirement may be years away for some, saving for that day is an aspect of financial planning that is critically important and may also have a behavioral aspect. A recent study by Lincoln Financial Group uncovered four behaviors contributing to retirement saving success:
- Start saving as early as possible and make extra contributions when you can.
- Participate in an employer-sponsored retirement plan (whether it’s the TSP or a 401k or some other type of vehicle). And if you have a private retirement plan through an employer that has a matching component, contribute at least enough to get the match – it’s free money.
- As your funds begin to grow, develop an investment strategy.
- Seek a competent financial professional if you need help with your investment strategy or just help with planning for more complex money matters.
Whether a savings mentality is part of your DNA or something you’ve learned over time, starting early and saving consistently will definitely steer you on the path to achieve personal financial success.
You can save and we can help! Take the Saver pledge today and take control of your financial future!
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- Written by Super User
- Category: Blog
- Published: 15 November 2012