Improve your Money Habits in 10 Steps
Becoming wealthy has less to do with your actual income, and more to do with the money habits you have developed.
While growing up, for many years I spent my money faster than it could come in, leaving me with debt and lots of concerns. Years later I would realise that I really needed to sit down and work out my habbits with money, the good, the bad and most of all where I was going wrong.
Below I have compiled a list of 10 tips I follow myself, they allow me to keep my money flowing and my savings growing.
Pay yourself first
Before you spend any of your money, make a commitment to take some off the top to go towards a savings or an investment account. Do this before paying your bills or a single penny. Better yet, use your pre-tax retirement account to pay yourself before Uncle Sam taxes his share.
Be conscious of your spending
Resist urges to waste money, buy generic versus name brand, look out for discounts, do-it-yourself, avoid ATM fees, cut out junk food . . .
Track your spending
Look back at your bank and credit card statements for the past few months and take a good look at your spending habits. Find out where your money is going, what your biggest expenses are, and uncover unnecessary expenditures that can be eliminated.
Being green can make you rich
Don’t let the water run while brushing your teeth, turn off lights when not using rooms, adjust the thermostat when leaving your house, don’t drive more than you have to, don’t over-order when eating out, etc. Use the hundreds of dollars you save from being eco-friendly to invest in your future.
Be consistant
Don’t try to make it rich by “playing the market” and trying to compete against professional traders and institution that move markets. Act like an investor and plan to be in the game as a wealth builder, which means ignoring the short-term ups and downs of the market and consistently managing your money well. Slow and steady is the only sure way to become wealthy.
Start a small business
Boost your income by doing something you enjoy and that provides value. Start small and slow to understand what it is like to be a business owner. Most self-made millionaires earned their wealth by being business owners because of the tremendous income and tax reduction opportunities it presents. You can do this too.
Budget and set yourself goals
Fail to plan and plan to fail. Creating long-term money goals and smaller goals along the way defines an end result, provides a sense of accomplishment and gives you something to hold yourself accountable towards.
Saving on auto pilot
Make arrangements with your company or bank to automatically deposit funds in a separate savings or investment account before sending you your paycheck. Set up automatic bill pay services with your reoccurring bills in order to avoid late payment fees. Some companies even reward you with a discount for early or automatic payment.
Increase your financial IQ
Dedicate time, either daily or weekly, to improve your financial literacy. Read money magazines and websites, listen to money advisers while in the car, etc. The better you understand how the money game works, the more opportunities you will have to accumulate wealth.
Stop messing around!
Quit waiting for the right answers and start now. The sooner the better when it comes to building wealth.
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