Most people who have achieved financial freedom have built up a solid stream of passive income. These folks have usually worked hard and saved up a nice nest egg that can provide the funds they need to live. Once saving up money, savings-savvy individuals do a good job of handling their savings.

They Have Cash

More than half of all Americans, regardless of age or gender, have less than 1,000 dollars stashed away for emergencies. Those who are in this boat live a paycheck-to-paycheck existence, and this lack of cash can lead to a great deal of financial insecurity. Financial experts recommend a cash buffer of between three and six months of cash on hand to deal with emergencies that might arise. If you don’t have a cash buffer set aside as a rainy day fund, now is a great time to start one.

They Take Advantage of Free Money

Many employers offer matching funds for any retirement savings their employees manage to put aside. A common match is 100% of the first 6% of an employee’s salary. You have to save up to the amount of the match to maximize this benefit. It’s free money, and if you’re looking to be savvy with your money, you’ll want to take advantage of this opportunity. Additionally, you might want to find a savings incentive match plan for your employees if you run a business that employs other people. You want to be successful money, and you should want your employees to be successful with their money. Effectively, if you’re able to take advantage of a company match, it’s like giving yourself an automatic raise.

They Save Automatically

If you’re looking to build wealth over time, you’ll want to emulate this characteristic of savings-savvy people. Whether you have a certain percentage of your salary siphoned off to a savings account or a retirement account or you decide to pull a set sum out of your checking account each month, you’ll definitely want to make your savings automatic. When you don’t have access to the money that you put toward long-term savings and investing, you’ll be less likely to have the temptation to spend it.

They Diversify

Savings-savvy folks do not usually put all of their eggs into a single basket. They diversify their savings to cut down on the amount of risk that their money is exposed to. If you put all of your money in a savings account, inflation is a big risk. On the other hand, putting all of your money into a single stock brings in the risk that your investment could lose all of its value. Putting some money into mutual funds, bonds and cash can alleviate some of these risks. This practice can also bring in dividend and interest income, which can build up a great cash flow over time.

Taking these steps toward managing your money can help you achieve a high level of financial independence. Your interest and dividend income can grow to a level that approximates your working income if you’re successful at saving. An emergency fund can keep you from going into debt and paying interest. Debt payments are the biggest obstacle to building wealth, and if you want to be like some of the top savers in the country, you’ll want to avoid it as much as possible.