6 Money Habits that Will Help Boost Your Personal Wealth
This is a guest post by Rachael Harper is the Content Marketing Strategist of Bennett & Porter
It’s not how much you make that will make you wealthy, but how you manage your finances.
Good financial planning can make the difference between a comfortable life in the future and one plagued with money-related stress.
If your dream is to build wealth and secure your future, you need to start building habits to help you get there.
Here are six money habits you to develop if you want to boost your personal wealth:
1. Set Financial Goals
It’s important to set both short-term and long-term goals to avoid losing sight of what you’re working towards. Knowing what you want your money to accomplish increases your chance of realizing your financial objectives.
If you’re just starting to save for the future, begin by creating a five-year plan. Outline your financial goals for the next five years and what you can do to achieve them. Whether you’re building your emergency fund, saving for a car, or planning to buy a house, it’ll be much easier to put money aside when you have a goal in mind.
2. Change Your Mindset
As soon as they receive their paycheck, most people would pay their bills, spend some of the money, and then save the rest. The thing is; after you’ve paid your bills and did the groceries, what’s left of your paycheck can seem meager – which can make the idea of saving seem like a stretch.
If this sounds like you right now, you’ll have to adopt a new way of thinking if you’re serious about securing your financial future. Save first, pay your bills, and then spend what’s left. Make sure you only save what you can afford, though. It’s okay to start small, as long as you’re consistent.
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3. Avoid Unnecessary Debt
Debt overload is a costly blunder you should avoid. While debt isn’t necessarily bad, the majority of debts will only prevent you from saving money for your financial goals.
It’ll be more difficult to save money while you’re in debt, so prioritize paying off your debts first. Start with the high-interest debts and then move on to the low-interest ones. Develop a debt-repayment strategy, if you must.
More importantly, avoid incurring new debts while you’re repaying your old ones. This is also the perfect time to develop sensible habits. Your net worth will grow much faster if you have fewer financial liabilities.
4. Live Below Your Means
This one should go without saying, but it bears mentioning because many people continue to fall into this trap.
As soon as they get a raise, most people will immediately look for ways to spend it – a bigger house, a better car, a new phone. This phenomenon is called lifestyle inflation. And if your goal is to become financially secure, you’ll have to guard yourself actively against it. Remember that the rich get richer because they live below their means.
There’s nothing wrong with treating yourself every now and then. But if you don’t put a lid on your spending, you could still end up broke despite your substantial income.
5. Create Multiple Sources of Income
The fastest way to increase your net worth is to make more money. And while a pay raise at work is great, it’s not the only way to boost your income.
There are a slew of side hustle opportunities to make some extra cash in today’s gig economy. You can take up freelance jobs on the Internet or drive for a ride-sharing company on the weekends. If you’re feeling particularly entrepreneurial, you can start a small business while working full-time.
Also, aim for multiple passive income streams. Invest in stocks, bonds, or real estate. When your passive income grows, you feel less financially dependent on your day job.
6. Start Saving for Retirement
The idea of retiring might feel far-fetched when you’re still in your 20’s or early 30’s, but saving for retirement while you’re young is actually one of the best financial decisions you’ll ever make. When you’re married and with kids, it will become harder to set aside money for your retirement fund because you’ll have more things to spend money on.
Don’t wait until the last minute. Start putting more money into your 401(k) and or Roth IRA to maximize the benefits of compounding interest.
Takeaway
It takes time to build and accumulate wealth, so start as early as possible. The six good money habits listed above can be your stepping stone to a better financial future.
But if at some point, managing your finances and investment becomes overwhelming, consider getting expert advice to help you stay on track and make better financial decisions. Consulting a wealth management professional pays back in spades.
More Ways To Save:
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• Fetch Rewards is a free grocery savings app that rewards you just for snapping pictures of your receipts. That’s really it. Free gift cards on groceries on thousands of products every day, no matter where you get your groceries. Just scan your receipts and get gift cards from places like Starbucks, Target, Ulta, Applebees. Use code QHKBH to earn 2,000 points ($2)!
• Rakuten/Ebates: Rakuten is my to go way to earn Cash Back from over 2,500 stores like Macy’s, Amazon, Sephora, Walmart and much more. Join Rakuten today for free, and you’ll get a $10 Cash Bonus to get you started! Every three months, you’ll get a Big Fat Check in the mail or a PayPal payment just for shopping.
• M1 Finance is an easy to use brokerage platform that allows you to invest in Fractional Shares and auto reinvest!
• Budget Templates: Excel budget templates with pre-populated categories and formulas to keep you on track with hitting your financial goals.
Rachael Harper is the Content Marketing Strategist of Bennett & Porter, a wealth management and insurance firm based in Scottsdale, Arizona. When not writing, she makes use of her time reading books and playing bowling with her family and friends.
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