According to a new report, the bigger the savings account, the smaller the home. A survey by TD Ameritrade found that “super savers” — defined as adults who save 20 percent or more of their incomes — tend to spend the least on housing costs.
You’ve likely seen articles telling you that if you want to pad your savings, simply cut back on lattes. Yet this new report found often it’s not the little expenses that keep savings accounts dried up, it’s the big ones. Housing is a huge cost. According to Marketwatch, the average American household spends $60,000 per year, and $20,000 of that is dedicated to housing. In the TD Ameritrade report, the biggest difference between super savers and non-super savers was housing. The study found that non super savers spent 23 percent on housing costs, while super savers spent just 14 percent.
Obviously cutting back on housing costs is a good move (pun intended) because it frees up money for savings, but how can you do it? Well, one thing to try is to downsize the size or price tag of your primary residence. Smaller/cheaper home = smaller/cheaper rent or mortgage payments. If you can’t move, try taking on a roommate or two to reduce costs. You can also look for ways to cut associated housing costs, like your utility bills, landscaping and maintenance. Call your utility companies and check on any deals or promotions. The next time your lawn needs mowed, don’t pay someone to do it, rev up the mower yourself. Search YouTube for maintenance DIY videos instead of contacting a professional the second something breaks. Once you cut back on housing costs, take that cash and pad your savings. We promise you’ll feel super.