10 Essential Money Habits Of Successful People Today
If we talk about the financial habits of successful people, then here’s a fact that will surprise most people reading this: The majority of millionaires didn’t get their wealth handed to them on a plate with a huge inheritance. In fact, according to a study conducted by Fidelity in 2012 86% of millionaires did it the ‘hard way’: they had jobs and turned them into careers.
A third of these self-made millionaires openly admit they have been through tough financial struggles. But simply working their job isn’t really how they made their money.
The one thing all these millionaires have in common is their financial habits. They worked on their financial literacy, learned how to spend wisely, how to save money with purpose, and how to invest for their future.
Here we look at the personal and financial habits of successful people and self-made millionaires, and the basics of how to manage your money for have the ability to set you on the path to wealth beyond your dreams.
1. Write A Budget and Keep To It
The first step to making your money work and grow is to be realistic about your budget. Knowing how much is coming in and how much is going out of your pocket every month is crucial to your financial wellbeing.
Make it a habit to track your spending. Only when you do this will you be able to take the action needed to reduce any debts you might have and build your savings. There are some great tools that will help you do this. One of these is BudgetTracker, a free online application that enables you to keep a handle on your bank balance and monitor your spending. Also one of my personal favorites www.youneedabudget.com.
What ever budget method you you, the idea here is to take action. You need to understand your financial situation like the back of your hand. Once you do, no mater how negative or positive it is. It will take the stress off your shoulders because know you can plan and way out.
2. Budget For Time, Too
You’ll need to make time to spend on watching your finances. If you make this part of your daily or weekly routine, you’ll find it only takes a few minutes during your lunchtime or on that commute home (especially in today’s mobile connected world). You should also make time to invest in yourself, whether that is to create a second income or improve your chances for promotion at work. Spend a single hour with this book, Time Management Techniques, Habits, and Strategies, and you’ll learn simple time management skills that will transform your personal and professional life.
3. Make Money Your Primary Asset, and You Your First Investment
Next time you complain about a wealthy tight person, stop and think. Self-made millionaires think of their money as an asset and in a totally different way than most. To them it is not a commodity simply to spend and waste, but a tool for the creation of wealth…Think about that for second….
Money is not a commodity simply to spend and waste, but a tool for the creation of wealth.
When people who want to become rich work out their budget, the first thing they do is figure out how much they are going to invest in themselves. They set aside money to increase their financial literacy, improve their job prospects, and meet their short-term and long term-goals.
4. Make Your Goals Count
Solidify your ambitions by listing them out and putting a value on each one. Research has shown that more than three-quarters of self-made millionaires are diligent list-makers. When you write your aims down, they come into focus and better able to budget for and plan for. Break professional goals into smaller milestones and see each success as a stepping stone to the big prize.
5. Cut Out Unnecessary Spending
When you start tracking your spending, you start discovering those bad spending habits which are holding you back from reaching your financial goals. Do you really need that second Starbuck’s coffee in the morning? Would a sandwich made at home provide an equally nutritious (and far cheaper) lunchtime meal? There are lots of ways to save money on groceries alone by spending more wisely (and we’ll be sharing these on this website regularly).
6. Stay Positive By Having Positive Friends
Remaining positive is a key characteristic of successful people. The majority of self-made millionaires have suffered failures, but they don’t let these stop them from growing and carrying on. They learn from mistakes, stay positive, and take on new challenges. They maintain their can-do attitude by maintaining a circle of positivity around them.
7. Start Investing Early
The earlier you start investing, the wealthier you will be (though it is never too soon to start). If you invest $3,000 each year from the age of 25, when you hit your 35thbirthday you will have invested $30,000 of your own money. Even if you stop there, with an average annual return of 8%, this will have grown to $472,000 by the time you turn 65.
However, if you delay this investment until you are 35, even if you invest $3,000 every year until you reach 65 (a total of $90,000), you will only have a pot of $367,000 to fund your retirement.
If you haven’t started investing yet. Start now even if it’s just 5% of your income, get into the habit of how to manage your money and invest in yourself first.
8. Create A Second Income
Whether it’s to meet your current budget or to make a little extra money to invest in yourself and your lifestyle objectives, a second income will give you the ability to have what all self-made millionaires have; the financial freedom to do what you want to do.
Working a second job, negotiating a raise or, better still, just earn an extra 1K per month gives you a new outlook on life and a focus on financial literacy and wealth creation. Employ great time management techniques and you’ll soon find the time to create new streams of income doing things that you love to do.
9. Delegate The Mundane Stuff
Maybe you love to clean house, wash your car, and maintain your garden. If you do, that’s great (and why not offer to do the same for others and generate that second income), but if you don’t you’re wasting valuable time. What I mean is if you can work for the four or five hours you would normally spend on cleaning your home at the weekend, and instead do something to help earn more money while you pay others to do the mundane work and make more money, doing so you’ll get a bunch of benefits as well as a cleaner house and a bulging bank balance.
Make time to read. It increases your knowledge, broadens your horizons, and prompts imagination (the lifeblood or money-making creativity). Reading helps with world awareness, personal and professional development, and it’s entertaining, too! Almost 90% of wealthy people read for at least 30 minutes per day.
It’s not easy to be rich, but it doesn’t have to be difficult either…
There are no short cuts to wealth; ask any self-made millionaire and they will tell you it takes a little time, effort, discipline and a load of financial literacy. But if you organize your time and budget, understand how to manage your money, cut out the unnecessary spending and start investing in yourself and your goals, there is no reason why you shouldn’t master the habits of successful people and go even further than join the list of self-made millionaires… After all, almost three quarters of the Forbes top 400 wealthiest list are self-made billionaires.
Originally published at www.financialfreedomlab.com on March 10, 2015.