7 Habits of Successful Savers & Investors

You get your paycheck, pay your bills and then see you have a nice pile of money left over. Suddenly, the list of things you want to buy is longer than you remember and you decide to indulge. After all, you did the responsible thing and got your bills paid first, so you deserve a reward. And booking an extended getaway or buying a flat-screen TV are so much more exciting than making an extra payment on your mortgage, investing in your 401K or simply putting that money in savings, right?

So, you splurge, and then the water heater breaks, and you’re left wishing you had that nest egg you promised yourself you’d start building next time you got paid. And now you’re wondering how people do it — what are the secrets of successful savers?

Well, just like any other habit, successful saving and investing simply takes time and persistence. To have the money in your budget each month for savings and investment goals is an ongoing financial commitment.

To help you learn how to make that financial commitment stick, consider implementing these seven habits of successful savers and investors into your financial plan.

1. Think Past Today

In the moment, it may look like you have extra money to spend. But before you let it burn a hole in your pocket, it’s a good idea to take a step back and think beyond that particular moment. What will tomorrow bring? What about next week or next year?

Successful savers and investors think ahead. They don’t just live for today and let tomorrow sort itself out. They put financial capital toward savings and investing goals that are important to them — retirement, paying for a child’s education, etc. So, think about what is important to you in the long term and then …

2. Set Goals

Savings is a given in the monthly budgets of successful savers, and they know it is an essential part of meeting future financial goals. To get yourself in this mindset, decide on a savings and/or investing goal for yourself and add it to your budget like you would your groceries or cell phone bill. This way, you know you need to allocate funds for your savings and you can plan your budget accordingly.

Your goal can be whatever you choose, but it’s a good idea to start off with something that will help keep you motivated and encourage you to keep this habit. Maybe choose a certain amount you want to have saved by the end of the year and then figure out how much you’ll need to put aside each month to achieve that goal. Whatever you decide on, it’s important to …

3. Stay Consistent

A key to successful saving and investing is consistency. Once you set a savings and/or investing goal, you’ll want to stick with it. People who have successful saving habits stick to their goals month after month and year after year. It’s also a good idea to revisit this goal a couple times each year, especially if you get a raise. After all, the increase in pay doesn’t mean you should be spending more.

Bonus Tip: As you get in the habit of putting money aside, you may find that it’s jarring to log into your banking app and move your money to a different account. Or you may even be tempted not to save as much this month when you see the amount change. Either way, you may want consider setting up an automatic deposit for funds so you don’t even see the money come in.

4. Plan for Emergencies

Another good savings goal to consider is setting up an emergency fund. Successful savers and investors know that financial emergencies happen and they have money set aside for these occasions. Setting aside three to six months’ worth of living expenses is a good savings goal for an emergency fund.

Building up this amount takes time and isn’t always possible right away. But even having a couple thousand dollars tucked away in a savings account you won’t be tempted to pull from can make a big difference in staying on track when large financial expenses come your way (which they will — they always do).

5. Pay Yourself First

You know to pay your bills, but you should be paying yourself too (which is what saving money really is). Successful savers and investors put their savings goals first. Because of this, money from their paychecks gets put aside for saving and investing — some experts say 10% is a good starting point. Depending on income and other financial commitments, some savers and investors are able to dedicate 25% of their income or more to saving and investing.

Whatever amount your budget allows, it’s important to get in the habit of paying yourself before spending extra money. So, when that paycheck hits your checking account, move a chunk to savings and stick with this pattern month after month.

As we mentioned earlier, making this saving automatic can help. If you’re looking to save for retirement, you can automate this by joining your employer’s 401K plan and having pre-tax money set aside for retirement. If you don’t have one, opening an individual retirement account is another good saving and investing option to consider.

6. Live Below Your Means

Saving isn’t all about putting your money in a different account. Successful savers and investors live below their means. If they spent every penny they earned, they wouldn’t have the money to set aside for future goals. To be a successful saver, you must spend less than you earn on a consistent basis.

If you are spending beyond your earning capacity and monthly income, you will more than likely find yourself accumulating debt, which will make it more difficult for you to save. You also risk damaging your credit if you overextend yourself financially and fall behind on payments. (Is this where you find yourself now? You can see how your debts are affecting your credit by getting your free credit report summary on Credit.com.)

7. Don’t Lose Money to Interest or Fees

When you borrow, whether through a loan or on a credit card, you are agreeing to pay back what you borrow. When you miss a payment, you’re going to add late fees to the amount you owe, as well as interest charges. To see just how much the money you’ve borrowed is costing you, you can use this lifetime cost of debt calculator.

Lucy Lazarony contributed reporting. This article has been updated. It was originally published March 12, 2015.