{"id":10999,"date":"2016-10-21T06:18:41","date_gmt":"2016-10-21T13:18:41","guid":{"rendered":"http:\/\/www.marketriders.com\/investing\/?p=10999"},"modified":"2016-12-20T13:41:45","modified_gmt":"2016-12-20T21:41:45","slug":"3-savings-habits-can-change-life","status":"publish","type":"post","link":"https:\/\/www.marketriders.com\/investing\/3-savings-habits-can-change-life\/","title":{"rendered":"3 Savings Habits Can Change Your Life"},"content":{"rendered":"

Why do some people seem so capable of saving for the long-term, while others struggle? Is it in your DNA, your upbringing, or something else?<\/p>\n

Your demeanor is a big part of who you are, but it’s mostly a matter of how you do things. Savings habits are not born into you. Rather, you adopt them from your parents, your friends and others in your life.<\/p>\n

\"savings<\/p>\n

It sounds difficult, but change is possible. Creating a new, more forward-looking you is a matter of changing how you handle the money in your life. That means learning new ways to divert income out of your pocket<\/a>, where it’s likely to be spent without much thought.<\/p>\n

Savings habits are not a perfect answer, but having them is definitely a powerful way to build a\u00a0long-term retirement plan and, in time, to create wealth rather than want in your life.<\/p>\n

Here are three savings habits you should adopt immediately:<\/p>\n

Pay yourself first<\/strong><\/p>\n

It’s a no-brainer, but far too few people think this way about money. When you get a paycheck, take out \u00a0a set percentage and send it to your retirement plan.<\/p>\n

If you have a job with a 401(k) or 403(b)<\/a>, this can be remarkably easy to do. Go to your human resources office and enroll. Now pick a percentage of your gross pay that will make a difference down the road.<\/p>\n

Experts suggest 15%. If you can’t manage that, make it less\u00a0and ask your HR director if your company will divert a portion of your raises in the future to retirement. Many plans do.<\/p>\n

If you are self-employed and\u00a0use an IRA<\/a>, this is harder but crucial. Every check in the door, take out that percentage target and mail it off to your plan. You won’t miss the money once it becomes a habit.<\/p>\n

Bucket your spending<\/strong><\/p>\n

Too often, we dump our net pay into a single account attached to a debit card and just spend it down. Pretty soon we’re running out of money before running out of month.<\/p>\n

Instead, consider creating two or three accounts. Call one spending money and another bills. A third one might be called vacation fund or rainy day money.<\/p>\n

Your employer can split your check into more than one account, usually. The more you automate this, the better<\/a>. Make sure you send enough to the bills account to cover your actual bills each month, plus a little cushion.<\/p>\n

Then divert some fixed amount to your rainy day fund. Whatever is left is yours to spend.<\/p>\n

Automate investing<\/strong><\/p>\n

The fundamental error people make with long-term money, believe it or not, is that they fail to invest it. Sure, they save money, but they put it into very low-interest savings accounts or even keep it as cash at home.<\/p>\n

Having cash is useful for emergencies, but most of your savings should be invested in a portfolio of stocks, bonds and other assets that will grow<\/a> your money over the years.<\/p>\n

If you don’t invest, you lose out on the compounding power of reinvested dividends and interest. Over time, inflation will reduce the purchasing power of your cash. Only investing can safeguard you from that.<\/p>\n

An easy way to automate your investment process is to build a solid portfolio of diversified index funds and rebalance it periodically. Any new cash you put in can be rebalanced into the different asset classes as well.<\/p>\n

Savings habits are not easy to form, but once you create a set of repeatable money moves, the effect is undeniable. You become one of those people good at money<\/a>, at last.<\/p>\n","protected":false},"excerpt":{"rendered":"

Why do some people seem so capable of saving for the long-term, while others struggle? Is it in your DNA, your upbringing, or something else? Your demeanor is a big … Read more →<\/span><\/a><\/p>\n","protected":false},"author":8,"featured_media":11003,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_wp_rev_ctl_limit":""},"categories":[47],"tags":[],"yoast_head":"\n3 Savings Habits Can Change Your Life | MarketRiders<\/title>\n<meta name=\"description\" content=\"Savings habits are a powerful way to built your long-term retirement plan. 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