10 Things Rich and Poor People Do Differently With Their Savings Accounts

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Having money versus not having money opens up a world of financial growth opportunities. And when it comes to saving, rich and poor people often have a very different mentality. The wealthy look for ways to help their money grow, creating more wealth, while those who are financially disadvantaged often put savings on the back burner in favor of spending or simply are unable to save at all due to their financial situation. 

Here are 10 things rich and poor people do differently with their savings accounts. 

How Rich People Often Handle Their Savings Accounts

Tyler Johnson, a certified financial planner and owner of Stillwater Financial Advisors, said a rich mentality focuses on what money will be able to do over time. 

“This mentality focuses not only on what the money may be able to accomplish in the present,” he said, “but weighs that against what it could do in the future.”

A part of this mentality involves budgeting effectively and thinking about the opportunity cost of money: Spending on option A means I cannot spend on option B, which one is more important?

“People with a rich mentality separate their funds into goal buckets and prioritize the importance of those buckets for an easier time monitoring progress and pushing to reach goals in certain time windows,” Johnson said. “A rich mentality sees a person seek out the ways they can get the best risk-adjusted return for the money they are putting away and assigns every available dollar to its most useful home.”

Typical Habits of Rich People

Here are some typical habits of rich people, according to Robin Snell, CFP and owner of Nested Financial & Tax Planning, a fee-only planning firm for Gen X-Y women, families and LGBTQIA+ communities:

• Automated Savings: Make automated transfers to their savings accounts, ensuring a consistent contribution every month.
• Goal-Oriented Saving: Tend to have specific financial goals, whether it’s saving for retirement, investing in assets or building an emergency fund.
• Diversification: Diversify their savings, investing in various short-term assets such as money markets, CDs, Treasuries and Agencies.
• Professional Guidance: Seek advice from financial planners or advisors to make informed decisions about their savings and investments.
• Tax Efficiency: Structure their savings and investments to minimize tax liabilities, taking full advantage of tax-advantaged accounts and strategies.
• Long-Term Perspective: Prioritize long-term growth and are less prone to impulsive spending, as they understand the value of delayed gratification.

How Poor People Often Handle Their Savings Accounts

“In contrast, a poor mentality is essentially the opposite,” Johnson said. “A person with a poor mentality only thinks about what the money can do for me today, disregarding future planning. Because the money is only being looked at for its present capability, budgeting and future planning is not given priority and the money tends to just be all lumped together. This is because it is waiting to be spent as quickly as possible. 

“Oftentimes, no focus is given on maximizing the risk-adjusted return and this money sits in a checking account or low-interest big bank savings account. Money is seen to be a revolving door where it only comes in for a long enough time to determine how it can be spent to create immediate gratification. Because of this, goals get delayed or the person ends up using debt to finance their later goals when they realize they did not save enough and still desire immediate gratification. Eventually, this puts them in a hole that takes a lot of time and intentionality to get out of.”

Typical Habits of Poor People

Here are the typical habits of poor people when it comes to savings accounts, according to Snell: 

• Limited Savings: Struggle to save consistently, if at all, due to low income or unstable financial situations.
• Emergency Savings: Savings may be primarily directed toward covering unexpected expenses, as they lack the resources for long-term investments.
• Lack of Financial Knowledge: May have limited financial education, which can lead to suboptimal, emotional and illogical savings and investment decisions.
• Cash-Based Transactions: Rely on cash transactions, making it difficult to track expenses and save systematically.
• Immediate Needs: Prioritize immediate needs over long-term savings, which can make it challenging to break the cycle of financial instability.

Reasons for Differences in Savings Habits 

Snell said that the contrasting savings habits between wealthy and poor individuals can be attributed to a variety of factors, including the following: 

• Income Disparities: The rich have higher incomes, allowing them to allocate more resources to savings and investments.
• Financial Education: A lack of financial education can hinder effective savings strategies, and poor individuals may not have access to resources or information to make informed financial decisions.
• Immediate vs. Long-Term Needs: Poor individuals often face more pressing financial needs, such as covering basic living expenses and emergencies, which can leave limited resources for long-term savings.
• Access to Financial Services: Rich individuals often have better access to financial institutions, investment opportunities, and professional advice, enabling them to make more sophisticated financial choices.
• Mindset and Habits: Rich individuals may develop a mindset that values long-term financial security and are more likely to cultivate habits that prioritize savings and investment. Poor individuals may be stuck in a cycle of financial scarcity and have a mindset focused on immediate survival.

“It’s important to note that these generalizations do not apply to all individuals, as financial behaviors are highly influenced by personal circumstances and choices,” Snell said. “Ultimately, the key to improving one’s financial situation, regardless of income level, is education, setting clear financial goals and developing effective savings and investment strategies.”

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