How to make saving money a habit

Some of us are naturally big savers; others need to work at saving until it becomes a habit.

If you’re in the latter category, here are some tips to help you sock away more money.

The first step is to have a goal. Having something to aim for will keep you motivated to save. But the goal shouldn’t be some arbitrary number. Rather, envision your goal — say, retiring early to the Caribbean — and then calculate the numbers you need to make it happen.

For example, Tim and Amy Rutherford of Parker, Colo., set of goal of retiring in their mid-50s several years ago after returning from a vacation that was rushed and interrupted by work emails.

“Having this end goal really changed our spending,” says Amy.

At the time, the Rutherfords were in their 40s with a combined annual income of about $200,000 from their sales jobs. They calculated how much they would need to save to maintain their lifestyle in retirement. They also slashed their spending and traded in their biggest expense — a 6,000-square-foot house — for one that was much smaller.

After accruing a seven-figure nest egg and getting their living expenses down to $36,000 a year, the Rutherfords were able to retire years ahead of schedule. Amy, now 50, retired in 2015; Tim, 52, fully retired in 2017.

Be realistic. Just like with a diet, if your savings target is too ambitious and requires too much sacrifice, you likely won’t stick with it.

Try budgeting. Tracking where your paycheck goes will make it easier to find ways to cut expenses. Consider using a free budgeting tool, such as or

Look at credit-card debt. It’s tough to build up savings if you’re being dragged down by high-interest-rate debt, such as credit cards at 18 percent annual interest. In fact, paying off this financial albatross should be one of your goals.

You also should automate your savings. In addition to having 401(k) contributions deducted automatically from your paychecks, arrange to have money transferred regularly from your bank account into a Roth IRA or investment account with low-cost mutual funds or exchange-traded funds.

Most employers with a 401(k) will match worker contributions, usually up to 3 percent of pay. Make sure you contribute enough to get this free money, although your goal is to max out annual contributions. The contribution limits are $19,000 in 2019, or $25,000 if you’re 50 or older.

Reformed spenders may find themselves out of sync with old friends. But thanks to social media, super savers have many avenues to connect with each other. A good place to find like-minded savers is the r/financial independence online community on Reddit, which has close to 557,000 subscribers.

Eileen Ambrose is a senior editor at Kiplinger’s Personal Finance magazine. Send your questions and comments to

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