As you know, building personal wealth doesn’t happen overnight. Simple habits make the best approach to a big pay-off down the road. Often, the best strategies are the simple habits that, when properly implemented, end up paying off big in the end. The challenge enters when you have more bills than income, making it difficult if not impossible to save.
Check out these seven tips on how to establish positive financial habits that will put you in closer touch with your goal of achieving wealth.
- Spend more than you make. Huh? Sounds crazy but the principle is simple. Most people do the opposite: spend more money than they’re making at work, and then put the rest on credit cards. They tell themselves they will pay it all back in the future as soon as they start making more money. However, what happens when you start making more money or come into a windfall? You spend more money! Don’t continuously operate at a loss. You’re only digging yourself a bigger hole.
- Tax yourself. Think about all the taxes and bills you have to pay. You know you have to pay them or you will get in trouble. You wouldn’t dream of skipping out on those taxes. So, why not pay yourself a tax and don’t let yourself off the hook for it? Think of that extra $100 a month as a must for savings. Pay yourself no matter what. Make it easier with an automatic bank transfer once a month, suggests Entrepreneur.
- Open an IRA. This will accumulate tax free, augmenting your regular savings account. You will get penalized if you take it out before 65; however, you can grow this account tax-free. By retirement, that’s a lot of money!
- Don’t time the market. Are you a day trader? No? Then don’t try to time the market to hit the next big thing. You’re basically gambling with your hard-earned money. Instead, invest some of your money in conservative stocks and be prepared to ride it out until retirement. Ask your stock broker how best to go about this. Also have a securites attorney in your corner if you find yourself being taken advantage of by your broker.
- Come up with a side job. It’s called a side hustle. Get to know it. Multiple streams of income are the keys to becoming wealthy. You’ll eventually get to a place where your money is making more money for you so you’re not having to work so hard for every dollar.
- Don’t get sucked into credit cards.It’s irresponsible to keep racking up credit card bills without enough money coming in to cover them. The damage you’re doing to your credit, not to mention all the interest you’re paying, is nearly irreparable if you let it drag on for decades. Make the right financial decisions based on your current status, not what you want it to be.
- Hang out with financially responsible people.Success breeds success. So, if you’re making bad choices because the people you’re hanging out with are too, then switch things up. Hook up with a crowd that’s generally older than you, professional, and focused in their savings and investment habits. Learn from them, mimic what they do, and come up with similar financial goals.
Wealth isn’t something you can attain in a day, a month or even a year. It’s not even strictly about money. It’s about changing your mindset about money and what it means to you!