Most of us have been told at some point in our life that it’s important to “save.”

Yet as I’ve worked with clients and their money over the years, I’ve noticed that the concept of “saving” has multiple interpretations and approaches. Some people just do it naturally and don’t even realize what they’ve accumulated. Others are the opposite and can’t find any money to put away for themselves.

Ask yourself, what kind of saver are you?

I think savers generally fall into four categories: 1) The Squirrel Saver; 2) The Spend Thrift; 3) The Someday Saver; and 4) The Smart Saver.

The Squirrel Saver. This is the person who has multiple small accounts in various financial institutions (usually banks and credit unions) hoping those accounts will grow or at least stay intact (a set-it-and-forget-it approach). They may also have little stashes of cash around the house or in a change jar that every so often gets counted up and rolled into one of those small accounts (or even a new one!!)

If this is you, here’s a tip: Help your money grow by consolidating and moving those small, low interest earning accounts into a high-yield account somewhere other than a bank. Or move it to ladder CDs that mature at different times (we can teach you how!). It’s great that you’re putting money away – now help it grow!

The Spend Thrift. The Spend Thrift spells savings: S-A-L-E. Buy one, get one (BOGO)? Woo hoo, I’ve “saved” 100%! The problem is, those savings don’t grow, and they won’t be there to cushion the blow of unexpected expenses or to support a new home or even a vacation. BOGO makes your money go.

If this is you, here’s a tip: When you see something you want to buy, wait a day or two. Then if you still want it (and really need it) go get it. It’s about control and decision making. Paying less than retail for something you really need is smart spending, but it’s not saving.

The Someday Saver. This person knows they should save, but they’re waiting. For the next bonus. For the next raise. For that inheritance they’re expecting. In the meantime, they are losing the benefit of growth over time. The sooner you start to save – even in small increments – the more your money will grow.

If this is you, here’s a tip: The time to start saving is now. Waiting for the bonus, the raise, the windfall is wishful thinking. A good rule of thumb is to save 10% of what you make. Start now and you’ll have a good foundation if the bonus or raise or windfall arrives.

The Smart Saver. This is the person who methodically and consciously saves without really thinking about it. It’s a frame of mind. They’re purposeful and have their money in the appropriate high yield accounts, investment accounts, and retirement accounts They know where their money is, and allow it to just…keep…growing.

If this is you: Keep doing what you’re doing!

If you need help transitioning into a Smart Saver, give us a call!