What Kind of Saver Are You?
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What percentage of your take-home pay do you put in savings each month?
At least 20 percent
At least 10 percent
A hundred bucks here or there—when I can.
2 of 9
Do you currently have any retirement savings?
I do, but that's pretty much the only savings I have.
No way. I'm too young to stress about that.
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When is a good time to start saving for retirement?
At age 35
At age 45
4 of 9
Do you have an emergency fund? If so, how much is in it?
Yes, and I’ve saved enough that I’ll be OK for a few months if I'm ever in a bind.
Yes. I’ve got enough to see me through a month or so, if my current source of income went away.
Does the coffee can full of coins on my dresser count?
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Do you take advantage of your office’s 401(k) plan, transportation, and other benefits?
Yup—I use almost all of the pre-tax benefits they offer.
I take advantage of some, like the health savings account.
No. It kills me to see all that money be taken out of my paycheck every two weeks!
6 of 9
Your car needs some surprise repairs. How do you pay?
I have enough of a cushion in my savings account that I can pay for the repairs—no problem.
I tap into my (pretty limited) emergency savings, and put the rest on a credit card.
Guess it's the bus for me this month.
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Do you have health insurance? What about property or renter’s insurance?
I have both.
I have health insurance, but not property or renter’s insurance.
I don’t have either.
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How does money make it into your savings every month?
I have a portion of my paycheck deposited directly into a savings account.
I manually transfer a portion of each paycheck to my savings account.
Whatever’s left over at the end of the month goes into savings.
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Are you a ‘buy this now’ kind of person, or do you wait for things to go on sale?
I’m not trying to brag, but I’m pretty careful about where I spend my hard-earned cash.
I’m generally responsible, and try to bargain hunt when I can. But I have my shopping vices!
If there’s a shiny new gadget, or a designer accessory everyone’s wearing, I have to have it—now.
Congratulations: Your financial future looks bright. Keep up the good work by continuing to set aside as much money as you can every month. Yes, that means more than the standard 20 percent, if you can swing it, and that also means you should divide whatever you’re putting away between short-term savings (your emergency fund!) and long-term savings (your retirement fund). One important thing to remember: don’t forget to have some fun. You need to think about your future, yes, but your life will be a lot richer overall if you make time and money for the people and things you care about.
You’re on the right track—you might just need some help prioritizing. Retirement savings are important, but the most important thing now is to ensure you have a solid emergency fund in case life throws an unexpected curveball your way. (Experts generally recommend putting away the equivalent of at least three months’ pay.) Once you’ve got a decent cushion in place, shift a bigger proportion of the money you put in savings towards a retirement account—but don’t entirely neglect the other savings. Remember that it’s much harder (and more expensive) to withdraw money from a retirement account before you reach retirement age than it is to take money out of a standard savings account if you need it.
The good news: You know how to live life to the fullest. The bad: You don’t always consider how the financial decisions you make now will affect you down the road. The thing about savings is that, if you select the right kinds of accounts, your money will make you even more money over time. (Thanks, interest!) So it literally pays to have money in a high-interest savings account or to invest it in a retirement fund such as a 401(k). If you’re the type to spend money almost as fast as you make it, keep in mind that by making just a few sacrifices now—say, giving up your daily latte run–you’ll be able to live a more financially secure life 10, 20, and even 50 years from now.