Saving money isn’t the sort of thing that happens without effort. To build a hefty amount of savings, you may need to make your share of sacrifices. But if you’re able to, you’ll reap the reward of financial security.
So how do rock-star savers sock away so much cash?
Principal recently surveyed a group of Americans between 19 and 56 who are considered super savers — those who either save 15% of their income or more for retirement, or who contribute 90% or more of the maximum annual limit for employer-sponsored 401(k) plans. These super savers not only do a great job of funding their retirement accounts, they also make a point of funding their emergency savings.
So what are their secrets? Here are some of the things super savers have given up to get to where they are today.
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1. Driving newer vehicles
A good 44% of super savers say driving an older vehicle makes it possible to sock more cash away. If you have a car that’s older, but safe and functional, hanging onto it could be your ticket to boosting your cash reserves. This especially holds true if your car is fully paid off.
2. Owning fancy homes
For 35% of super savers, owning a modest home has made it possible to do well on the savings front. Housing is the typical American’s largest monthly expense, so keeping those bills to a minimum can free up money for savings. If you’re thinking of buying a home, you may want to opt for a smaller one with a lower mortgage payment, lower homeowners insurance premiums, and less maintenance.
A good 38% of super savers gave up traveling as much as they’d prefer. While giving up travel entirely isn’t necessarily something to aim for, you can take steps to keep your trips more affordable. That could mean driving to nearby destinations instead of flying, and skipping fancy hotels in favor of private homes rented through sites like Airbnb.</…….