How to Sharpen Your Savings Skills

You’ve undoubtedly heard the expression regarding the “little things,” and how they often matter the most.

That can apply to virtually anything from your career to family and truly anything in between, and the same can be said, too, about saving money.

Those who have developed a particular set of skills and save money as if it is the same as brushing their teeth or eating didn’t accomplish this by accident or overnight but instead have developed and cultivated a culture of saving money as an afterthought.

That shouldn’t suggest that it’s not a priority but rather a system and thought process comes naturally that setting aside a few dollars really takes little, if any, work.

Unfortunately, most polls, percentages and statistics suggest those who have those skills are few and far between.

Studies have the number at about 65 percent, which is the number of people who admiringly save very little or nothing at all, and (rightfully so) are worried about retirement.^[1]

The same poll has most Americans blaming expenses as the reason they can’t save.

That’s pure madness if you ask someone who is adept at saving money.

They’ll argue (and again, rightfully so) that saving money is a science that has been masterfully designed to minimize expenses and learn to save by living less than frivolously and more prudent with how they throw around their money.

Yet another savings skill that is untapped by the masses.

Honestly, this isn’t a new trend, not being able to save money, and you have to wonder how complacency and the accumulation of goods has played into this awful means of how poorly the general public is at saving money.

This past December saw the personal savings rate drop to 2.4 percent, a 12-year low and its lowest mark prior to that occurred in 2001.^[2] Essentially, we’re not good at saving money and often times we break our all-time “lows” as far as personal savings go.

But don’t let the 2017, 2005 and 2001 numbers lull you into believing that those personal worst are few and far between. The truth of the matter is saving money is a lost art form, something that has slowly but surely tumbled one year after the next, despite the fact that 2017 and the economy have been described using words like “robust” and “optimistic.”

So what exactly is the major problem? Why are Americans savings so little, worried about expenses and not really believing as though retirement is an option?

No one really wants to save because they put having things and, quite frankly, haphazard planning and budgeting ahead of retirement or savings, as examples.

Retirement outlooks for many is sad, to say the least.

More than 42 percent of Americans are said to be on the fast track to retiring broke, with that percentage linked to most having less than $10,000 saved for retirement.^[3]

Ironically, discussions abound constantly about how Americans are in a state of crisis mode when it comes to a bevy of topics, from diversity to obesity but how often are our savings shortcomings really discussed on any sort of higher level? Sure, it happens, but the onus is on you, me and everyone else to be smarter with your spending, stand firm on how you save your money and develop your own individual or household plan to tackle retirement head on and, at the simplest level, learn how to save better.

The individual who do it well have finely tuned the “how,” and here’s a better idea of what you should be doing, too.

Waiting Game: If you feeling like spending, give it some time first

So as much as the number suggest saving money hardly is something that the majority of people want to do, other studies suggest otherwise.

The numbers from 2001-2006 say that we preferred spending 54 percent versus 33 percent for savings, but 2014-2016 is a complete role reversal with 43 percent wanting to spend and 66 percent wanting to save.^[4]

But “wanting” and actually “doing” are two very different things.

Another study done just last year had similar results: 57 percent want to save, the rest want to spend, but a closer look suggested that was more theory than practice and that thought process is more of a temporary hold versus how they’re normally shop or spend (30 percent spending more, 34 percent no change in how they spend).^[5]

So a lot of spending and the will to save is smoke and mirrors, minus the execution.

Really, at the heart of it, most people simply like spending money because it feels good and you get to have something or experience something as a result, whether that’s a smart phone or sitting on the beach.

The fact remains is impulse buying and shopping is up, and that has to do a lot with online shopping and how easy it is to point, click and spend.

An interesting study showed that online shoppers feel like they’re spending to chase a certain image they see, so buying not only is engaged visually but social media acts like a catalyst to get you to buy more.^[6]

Think of it like this: shopping is fun, easy and, online wise, hard to resist.

So, what advice can you give yourself? Resist it by waiting, that’s all.

As a financial expert, you can easily explain that the best defense is apathy, not getting too hold or cold with spending and just walking away or logging off the computer, letting what you saw sink in and ultimately wash away as time passes.

Some use the 48-hour rule or 30-day rule, which simply suggests that if you wait a few days or a month before you buy, more than half the time, you don’t end up buying or really even wanting the product or service whatsoever.

Small Wonderful: Budgeting is how you track little purchases (and monitor the big)

Anyone want to venture how much you spend per year on bottled water? How about a running total on coffees out on the go, the ones that are more than just .99 cents?

Have you checked your lunch bill lately for the entire month or year?

Everyone has their opinions about budget, whether they work, don’t work or just how valid they are.

The truth is most who say they budget do so in a way that is extremely broad.

For example, they’ll say, well, I pay $300 for my car, $800 for my rent and then utilities and whatever else. So by that account, you have $1,100 accounted for but beyond that it’s really just a guessing game.

Even for those who have all the “big stuff” marked off on their would-be budget, has anyone ever really stopped to think that your car payment, mortgage and other larger expense aren’t what is making you go broke?

Let’s go back to those original questions.

The average person spends $351 per month on take-out food, or just over $4,000 per year.^[7]

The average trip to Starbucks, for example, is about $3.43 to $4.43 per item, per trip, so that’s a five day per week habit costing you $1,151.80.^[8]

Americans spend roughly 16 billion dollars per year on bottled water.^[9]

As much as we want to blame our spending on car payments being too high, rent being too high or utilities and fixed costs being too high, you might want to take a second look at some of those ancillary budgetary expenses and start cutting quickly.

Just cutting your take-out bill in half, maybe not eating out every day or cooking meals at the beginning of the week as your meal prep can save you $2,000 per year. That money certainly feels as though it belongs in your savings account or better suited toward retirement.

In fact, cutting back on Starbucks 50 percent and take-out 50 percent means you’ll be sitting on nearly $3,000 per year: all this just to ditch a tuna sandwich and coffee.

Seems like a no-brainer, right?

In addition to take-out food, bottled water and coffee, you might want to consider cutting your over-the-top cable bill, ballooned cell phone plan or start shopping around for better rates on insurance, for example.

The average cable bill is between $51 and $100 per month with 25 percent between $50 and $75 and 23 percent between $76 and $100 per month, although nearly 10 percent are in the more than $150 category.^[10]

Streaming service, no contracts and other means of watching television and movies almost has made cable TV and satellite seem archaic at best both from the means and money that is involved.

And if you’re not letting cell phone and insurance companies fight over your business for the best price you can possibly get, then you’re simply not trying hard enough to save money.

Get tougher on these guys, the same way you need to do the same on yourself and make some tough decisions on how to save and eliminating cost from your life.

From retirement to just having any sort of savings account, you’re most likely in a state of financial influx.

Maybe it comes from not knowing how, and that’s part of the issue, to an extent.

Roughly 61 percent of adults don’t track their money, spending and all things money related.^[11]

But the “not knowing” may have started when you were younger, from your parents or just a lack of basic budgeting as a kid. That certainly looks like a place for serious improvement.

A study suggested that 87 percent of teens don’t know much about finances on a personal level, but 35 percent want to learn and only 28 percent know the importance of a budget.^[12]

That is one aspect of why our savings skills are so poor: no one ever really showed us “how,” but instead spoke in generalities.

The other major aspect of our savings skills being subpar at best is a lack of organization and accountability as such. Not being able to save isn’t so much a path as it is a choice. You can change your savings trajectory by being smarter with your budgeting, cutting expense and not being so fixated on getting things without thinking through the importance of the “why” versus the “why not.”

These are the foundations of those savings skills, for many, that are as dull and dusty as a treadmill in March.

Our propensity for putting money managing on the back burner has reached feverishly poor status, and the only bailout we’re going to get is picking ourselves up, sharpening our pencils and putting our project of financial reformation to work with a keen sense of purpose toward, at the very least, taking what’s dull and adding a much-need intensity and edge to saving money.

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