Ways to maximize its impact
Personal savings should be a consideration for every adult. What you manage to save each month allows you to live within your means, plan for the future, and anticipate and deal with emergency cash needs as they come up. With that being said, not all savers have the same style, but each style can be maximized and dealt with. So, what type of saver are you and how can you maximize your personal savings?
The Bigger Picture Saver:
Who you are: People who are bigger picture savers like to think about the future and plan out in advance. The moves are more calculated and you probably know what your long-term goals are and how to get there. If you are this type of saver you probably like to take control and make active decisions on your investments. You like the planning and execution phase, as well as the research phase.
How to Maximize your Personal Savings: Planners can maximize their savings by diversifying their options and heavily researching new investments and options. Because you are planning ahead, taking risks early on can pay off big later. A diversified portfolio is ideal for your savings style. Don’t forget to plan ahead of emergency needs, thus having a hefty emergency savings fund that is easily accessible is an important consideration.
The Safe Saver:
Who you Are: Safe savers are savers who aren’t particularly confident in their investment skills, and only invest when they are told to do so. You might be afraid to diversify your portfolio on your own or to take big steps in your savings plan. Safe Savers are also less active in their investment options than bigger picture savers.
How to Maximize Your Personal Savings: If you are more reluctant to make your own decisions you can still maximize your personal savings by speaking with a money manager. Employing a manager to handle the investments for you can help remove the fear of investment and help you ensure your savings are diverse and robust. The safe saver can run into issues with putting too many eggs in one basket. A money manager can help to ensure that isn’t the case.
The Avoidant Saver
Who You Are: Avoidant savers tend to live for the moment and avoid saving at all costs. You are likely a person who likes to enjoy your money while you can and don’t think much about putting money aside for later use. These savers often put themselves in a dangerous position because they fail to save for the future, and even a small emergency can be a true hardship.
How to Maximize your Personal Savings: Starting small and building good money management habits are the key to success in the future. Avoidant savers have a leg up from other savers, as even small changes can make a big difference in the beginning. Start by setting aside $100 a month into a savings account to build an emergency fund. Once an emergency fund is built, you can start considering investing and longer-term investments. Starting small and building good habits is the key.
Now that you know what type of saver you are, you’ll want to think about how you’d like to utilize your style to build a brighter future for yourself and your family. Every type of saver, whether a planner or an avoidant saver can benefit from the resources and tools that money management services can provide. Consider sitting down with an advisor to gain a better understanding of your personal savings needs.
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