3 Smart Money Habits That Will Build Wealth
Every year it’s estimated that about 25 percent of all new year’s resolutions are to spend less and save more. In other words, people want to develop smarter money habits so they can work towards a more financially stable future.
If you want to develop smart money habits, it really comes down to your goals and discipline. Some people like to shoot for the moon. Every year they tell themselves they’re going to make their first million. Others like to take things one step at a time.
Regardless what your goals are you need to develop the right habits to achieve them. Here are three smart money habits that will help you build wealth.
Develop Monthly Budgets
First things first, you need to be on top of your expenses. It’s no coincidence that some of the wealthiest people in the world are also the most frugal. Warren Buffet is a prime example of this. With an estimated net worth of over $70 billion you’d think he’d have some expensive tastes right? In fact, it’s quite the opposite.
Buffet lives in the same house he purchased back in 1958 for the equivalent of $270,000 in 2017 dollars. He also reportedly drives used Cadillac’s and looks for cars with reduced prices like those that were slightly damaged. I’ll admit this is a bit extreme, but the point is you need to spend like you’re broke if you want to build wealth.
One of the best ways to do this is to create monthly budgets and follow them to a tee. You can use a simple and free program like Excel to keep track of your spending. Not only will this keep you on track, but it will also help you analyze your spending habits as a whole.
Quantify Your Goals
When it comes to goal setting it’s always best to quantify them. For example, take a look at these two goals below:
- Goal A: I want to make more money every single month until the end of the year.
- Goal B: I want to increase my monthly earnings by 20% month over month until the end of the year.
These goals are similar yet very different. Simply setting the goal of “becoming rich” or “building wealth” just won’t cut it. You need to be able to hold yourself accountable. If you aren’t meeting your mark, you should know exactly by how much and what it’s going to take to achieve it.
Become a Sponge for Knowledge
In business and in life, knowledge is power. If you want to progress financially you need to absorb as much knowledge as possible. I recommend spending at least 20 minutes a day learning more about money and building wealth. There are infinite opportunities to make money in this world. You should try to explore as many as possible to see what you’re most interested in.
For example you could take the time to learn how to make money with cryptocurrencies. Or you could explore opportunities to launch an online business. Whatever it is, the more diverse your knowledge the better decisions you’ll make around your finances.
Amassing wealth won’t happen overnight. It probably won’t happen in the first year either. It takes years of hard work and discipline. That said, it’s more than doable. For starters I recommend adopting the three smart money habits listed above.