1. The early you can start saving, the better.
Whether you're putting money into a savings account or a retirement fund, interest compounds over time. Most people don't have a ton of extra income when they're early in their careers, but even small amounts of savings can add up to a big difference over time.1
2. Take advantage of 401(k) matching.
If your employer offers 401(k) matching contributions, it's in your best financial interest to take advantage of those matching funds as early and as much as possible. Matching contributions represent an amount of money that your employer will match when you make 401(k) contributions.
If your employer offers a five percent matching contribution to your 401(k), for example, it means they will contribute an additional five percent to your retirement account, as long as you meet your own contribution requirements. This is free money that too many workers fail to take advantage of. If you make $50,000, for example, a five percent match from your employer can net you an extra $2,500 in earnings every year—and that money goes straight into a tax-deferred retirement fund.
3. Don't trust yourself to stick to a savings plan.
It's easy to set a schedule for saving over time—but when it comes to transferring that money into your savings account, some consumers struggle to pull the trigger. Do yourself a favor and spare yourself the temptation of spending what you've saved: Set up automatic savings contributions and treat your monthly savings like any other bill.
Over time, you'll forget about the money being saved, and the habit will be formed. But you can continue to automate your savings and rest easy knowing that you're sticking to your plan.
4. Track every purchase through a money management tool.
Do you know where your money is going? If you don't, you might be disappointed to find out how much you're spending on coffee or streaming services. Money management tools connect with your bank accounts to help you analyze your spending habits and make changes to improve your money management skills.
Seek out a money management tool and start using it to evaluate your daily and monthly spending habits. Identify opportunities to make smarter decisions and develop habits that reduce your monthly spending and improve your ability to save.
5. Use pay raises to increase your savings—not your spending.
As you receive salary increases at work, resist the temptation to start spending more as a result of your increased take-home pay. Instead, use that additional income to increase your monthly savings.
It's okay to give yourself a little extra spending money every now and then, but use pay raises to strengthen your savings and your investment efforts—and then increase your spending once those needs are addressed.
6. Always look ahead to your next financial goal.
Saving is a long-term strategy. Along the way, you will end up targeting a number of other savings goals, such as buying a home, building up an emergency fund, and even paying for college tuition for your children. No matter where life takes you, make sure you aren't resting on your financial laurels—use your savings strategies to continue building toward the next achievement.
Nobody can ever predict how their financial goals or needs might change over time. Even if you feel financially secure, continued saving will increase your financial cushion and put you in position to realize new goals as they arise. Many wealthy individuals are always working in pursuit of savings goals, even though their finances are already in great shape. It goes to show you that you're never too well-off to abandon your savings routine.
7. Avoid debt whenever possible.
Certain types of debt are necessary to reaching financial goals. Unless you win the lottery, you probably won't buy a home without taking out a mortgage. But in general, debt should be avoided if you're serious about becoming a smart saver. Instead of taking out an auto loan, for example, save up ahead of time and buy your vehicle in cash. The same goes for other big purchases you may make. And while credit cards are a useful financial tool, only use them if you're sure you can pay off the full balance every month—otherwise you could dig yourself into a deeply, costly financial hole.
Building wealth isn't an overnight process. It requires persistence, patience, and solid savings habits to build long-term financial stability. Focus on making financially wise choices in your daily life, and your consistency will be rewarded over time.