Two studies evaluating better savers’ spending habits and saving psychology have established that reducing spending as a percentage on housing, income, food, and beverage, and transportation can significantly boost one’s ability to save some cash.

Low savers spend more on housing, food, and transport

J.P. Morgan Asset Management and Employee Benefits Research Institute conducted a study published in June last year to establish why some people save more than others, even when they are on similar salaries. The survey established that, on average high saves saved 3% more compared to middle savers, while middle savers also saved 3% more than low savers. Findings indicated that low savers save 2-3% of their salary, with middle savers saving 5-6% and high savers saving 9%.

The difference in saving is not an income matters, but low savers are often believed to save less due to the assumption that they earn less. But the study indicated that low savers ad middle savers had almost the same salaries. Despite earning almost the same, middle saves somehow save 3% more compared to low savers, explaining why retirement plan balances of middle savers are almost twice those of low savers.

Interestingly, the study established that better savers spent less on housing, including rent or mortgage, utilities, taxes, home services, and furnishings. Poor savers spend more on food and beverages, which includes groceries and eating out and transportation, including spending more on gasoline, vehicle purchases, and train ticket. Fascinatingly a high cost of living like home in San Francisco wasn’t a factor for low savers spending more in the three categories relative to middle savers.

Cultivating the culture of saving

Spending more on the three categories can affect one’s saving ability and gain an advantage in housing expenses by looking at a subscription creep, where autopay services are drafted from your account monthly. Similarly, you can save by spending less eating put. Most importantly, use a mental trick to create a new saving habit. Setting a daily goal than a monthly target can help you learn to save.