Published in: Banks | Jan. 21, 2020

7 Things Super Savers Do That We Should, Too

By:  Dana George

We are committed to full transparency in our mission to make the world smarter, happier, & richer. Offers on The Ascent may be from our partners - it's how we make money - and we have not reviewed all available products and offers. That transparency to you is core to our editorial integrity, which isn’t influenced by compensation.

Super savers share at least seven common traits. Here's what we can learn from them. 

TD Ameritrade defines “super savers” as people who save 20% or more of their income for retirement. We're not talking about the rich and famous. Super savers are everyday people who have prioritized saving. 

They’re particularly impressive when we consider the rate at which most Americans are going into debt. By the end of the second quarter of 2019, we were collectively approaching financial liability totaling $14 trillion. 

A young girl putting coins in her piggy bank as her mom looks on proudly.

Image source: Getty Images

So what keeps the super savers from falling into the debt trap with the rest of us? According to research by Principal Financial Group, super savers are motivated by:

  • The desire to feel financially secure (62%)
  • The dream of enjoying a comfortable retirement (57%)
  • The need to feel prepared for emergencies (43%)

Super savers do not want to feel captive to the whims of fate. Come what may, they want to know that their finances will be fine. 

Here are seven things super savers do that all of us should be doing, too.

1. Start early

Of super savers, 54% began saving before the age of 30, and of those people, 26% began between the ages of 21 and 25. What these savers learned early is the power of compound interest. Here’s how it works: You earn interest on the money you put away. That interest is rolled into your savings, and you earn interest on that money, too. It's like a tumbleweed on the Kansas prairie, growing bigger as it rolls along. The earlier you begin, the larger it grows.  

2. Make regular contributions

A super saver makes regular contributions, no matter what's going on. They're faithful to their goals, even when other expenses arise. Super savers never take a break. Before bills are paid, before going on vacation or buying a car, they take care of their future selves. It's that regularity that helps their money grow faster. 

3. Avoid high-interest debt

Because super savers benefit from the magic of compound interest, they are especially loathe to pay it to someone else. They may borrow to make a purchase that is likely to increase in value (such as a home), but they will not borrow to buy something that won’t increase in value (like an article of clothing). High-interest debt is out of the question. 

4. Stick to a budget

Approximately 60% of super savers create a budget and stick to it. Whether it's a simple budget consisting solely of income and expenses or a complex graph measuring short- and long-term financial goals, these folks know the value of sticking to a plan. That means letting their heads overrule their hearts. For example, if their budget for a new home is $200,000, they don't fall in love with a property and offer $225,000. If their clothing budget is $150, they don't spend $160. Every dollar counts, because each dollar spent is a dollar they cannot invest.

5. Invest

Super savers invest in the stock market rather than hiding their money away in a savings account. If they're fortunate, the average saver may earn 2% interest from a high-yield savings accounts, but super savers are looking for meaningful growth. They contribute to their employer's 401(k) plans and take full advantage of employer matching. They understand that the S&P 500 has averaged an annual return of around 10% historically and know that if they want their money to grow, they must take risks. They are wise enough to limit those risks by diversifying their investments.  

6. Live below their means

One habit all super savers have in common is living below their means. They could have newer cars, larger homes, and more stuff, but they choose to invest in their future instead. They are far less likely to make an impulse buy, because they understand the concept of opportunity cost. Simply put, opportunity cost is what you give up by choosing another course of action. Say a super saver is looking for new shoes and comes across a pair that seems perfect for $200. They are likely to keep looking until they find something similar for $100 and invest the difference.  

7. Associate saving with positive feelings

If you ever experience a feeling of elation when you purchase something new, you may be surprised by this study: In 2007, the Journal of Consumer Research reported that saving money can offer the same high. For some people, saving releases endorphins and dopamine, "feel-good" hormones in the brain. The better a person feels each time they save, the more likely they are to do it. 

If becoming a super saver seems impossible, take it slow. Start small and make a conscious plan to increase the amount you save and invest each year. The earlier the better, but it's never too late to get in the game.

These savings accounts are FDIC insured and can earn you 20x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you more than 20x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2020.