It’s essential to save time and money in today’s landscape, considering the adage “time is money.” Nevertheless, it’s best to separate the two as far as developing healthy and beneficial habits go.
Today, the focus will be on money. If the definition of success includes wealth for you, then you’ll need to develop the right habits to drive that kind of success.
Thankfully, the perfect template is out there in the form of millionaires. Considering they’ve already demonstrated certain patterns, while there are no guarantees, emulating them is a great idea.
So, here’s a guide to help you avoid wasting money!
What Will I Learn?
- 1. Credit Card Interest Costs You More Money Than You May Realize
- 2. A Brand New Car Is Not a Great Way to Spend Money
- 3. You Need to Garner Discipline over Impulse Purchases
- 4. Keeping Up Appearances Does Not Help with Your Financial Goals
- 5. Getting Life Insurance for Kids Is Rarely Using Money Wisely
- 6. High-interest Loans will Eat Your Take Home Pay Away
- 7. Successful People Often Don't Get Extended Warranties
- 8. High-end Brands Are Your Enemy if You Intend to Save Money
- 9. Unnecessary Subscriptions Need to Go!
- 10. Quality of Life Adjustments the Moment You Get Enough Money Are a Bad Idea
- Adopt Habits That Will Make You Successful
- Maximize Your Chances of Financial Success with This Information
1. Credit Card Interest Costs You More Money Than You May Realize
Sure, some forms of debt are conducive to good outcomes. For example, the mortgage on a home. However, others, especially high-interest variations, will kill any hopes you have of building wealth.
Your credit card stands at the top of this collection. Having one helps with your credit score, especially if you keep it low. However, if you don’t manage your credit card balance, interest charges will be eating away at much of your earnings.
The golden rule is to avoid using money you don’t have. Cut up the credit card if you have to. It’s not like you’ll be penalized for managing it online.
2. A Brand New Car Is Not a Great Way to Spend Money
Yes, there are a lot of wealthy people who make new car purchases. They even buy multiple. However, you need to accumulate the wealth first before you get there. A car is meant to take you from point A to point B, whatever that represents on a journey.
The most important factor here is reliability. Remember, the moment you take the car off the parking lot, depreciation starts to kick in.
It doesn’t need to be new or flashy. Get yourself an affordable used car that you can reliably use.
3. You Need to Garner Discipline over Impulse Purchases
Sometimes we see things that would look nice to have and we end up just buying them on impulse. Unfortunately, many of those things end up not even being looked at more than a couple of times, then you end up with post-purchase cognitive dissonance.
What does that mean? You start to regret the purchase and think about better ways you could’ve used your money. How about just not buying the thing in the first place?
Unless you need something, practice the waiting game. Give it about two weeks to a month. If you can still feel like you strongly need it, then go ahead and make the purchase after you’ve thought it over.
4. Keeping Up Appearances Does Not Help with Your Financial Goals
Keeping up with the Joneses is way too important for something that does nothing but feed your ego. Did you know that wealthy people don’t spend time on ways they can “look” wealthy? Instead, they strategize and act on how to actually get the wealth.
In some cases, you may not be able to break yourself out of this habit and therapy may be needed. However, the idea to switch off whatever it is that makes you feel the need to impress others.
If someone doesn’t think your car is all that, then you need to get to a point where you are unbothered. There’s no need to buy designer clothes you can’t afford just because you want people to look at you and think you are loaded.
This is especially true if you’re putting yourself in debt to pull these things off.
5. Getting Life Insurance for Kids Is Rarely Using Money Wisely
Insurance providers are very good at either convincing or guilting you into spending money on life insurance for your children. If you have a child with some kind of pre-existing condition, there MAY be some benefit to getting such a policy since their purchasing one as an adult would be difficult.
Beyond that, you’re not an irresponsible parent for not taking out a policy for a child. Who would you be protecting if something were to happen to the child? Yourself? Allow the child to grow up and take out a policy of their own when they are ready to.
6. High-interest Loans will Eat Your Take Home Pay Away
Steer clear of these just like you should credit card debt. One of the most egregious offenders is payday loans. Yes, sometimes it can seem very attractive to get some quick assistance and then pay it off when payday comes around.
Related Reading: Where do Wealthy People Keep Their Money?
The thing is these loans tend to have incredibly high interest rates, which means that you pay so much out of your salary that you’re left without enough to make it to the next pay cycle. Then what happens? Do you then get trapped in a cycle of borrowing to make it to your salary? Nobody wants that.
7. Successful People Often Don't Get Extended Warranties
There are very few situations in which extended warranties are beneficial. Truthfully, most of these go unused. It’s not necessarily that the items covered perform well consistently. However, the claim rate is where the disparity is.
After owning something for a few years, it’s likely that you wouldn’t even think of bringing it back like you would if it were to stop working a couple of days after purchase.
Additionally, you’ll sometimes find that if you were to repair the item independent of the warranty, the cost may even be a lot less.
8. High-end Brands Are Your Enemy if You Intend to Save Money
This feeds into the earlier point about keeping up appearances. What you may not realize is that you end up spending a lot of money just buying a name. The underlying product or service is often not much different from the less reputable brands.
Even where there is a difference, it’s often not significant enough to make a difference in usability. A BMW is nice, but are you necessarily going to suffer from driving a Corolla instead?
Polo Ralph Lauren is great but U.S. Polo Association makes great quality clothes that will last for a long time too. Get invested in functionality and not names.
9. Unnecessary Subscriptions Need to Go!
There are way too many unnecessary subscriptions floating around. You have Peacock, Netflix, Hulu, and Disney+. How many of these are you watching? It’s even worse if you aren’t watching them at all.
This point isn’t just about content subscriptions. Some people haven’t been to the gym in ages, but they’re still being charged for their subscriptions consistently. There’s no reason to have something running that you aren’t using.
Think about your habits before you subscribe. Sure, that annual gym membership looks great but are you at the point where you’re a consistent gym goer? If not, those savings will never mean anything.
10. Quality of Life Adjustments the Moment You Get Enough Money Are a Bad Idea
Many people have a bad habit of changing their quality of life the moment they start to earn a little more money. Don’t misunderstand what is being said here. If you have a substandard quality of life, adjustments are both understandable and necessary. No one expects you to continue being homeless if you can now afford to rent a house.
However, if you’re changing your vehicle just because you can now buy a more expensive one, you’re doing it wrong. By maintaining your quality of life as much as possible, you allow yourself to have extra money that can be used to help you build wealth.
Adopt Habits That Will Make You Successful
Many of the wealthy people you know about got there by adopting and being consistent with healthy and productive habits. Here are a few of the easiest ones to adopt.
Use To-do Lists
Sometimes, you don’t make progress because you aren’t doing the things that are important to achieve it. While many people are driven, remember all they need to do, and get it done, others aren’t wired that way.
If you need to help yourself keep track and stay accountable, consider creating and maintaining a to-do list.
Minimize the Time Spent in Front of the TV
Most successful people don’t consume much TV. If they do, they certainly aren’t binge-watching shows, especially before they achieve wealth. Some of them don’t watch TV at all.
No one is saying that you should take it that far, but the idea is to spend more time on the activities that are conducive to your success. If TV is not your primary way of consuming media, the rule still applies to however you do.
Be an Early Bird
This could mean different things to different people. Sure, you could interpret it to mean be an early riser and get out there. However, the idea is to be early consistently in the things you need to do.
Related Reading: Brokerages Used by Wealthy Investors
There’s no need to put off something for another day when you can do it today. The only thing you’d be achieving is cutting your efficiency by going that route.
Have a Solid Savings Plan
Whether you are alone or you have a spouse, developing a plan that includes saving and investing is key. Try to work on creating an emergency fund, having other savings to pull on, and reducing debt. If you can work your way up to saving two-thirds of what you earn, you’re on your way.
Maximize Your Chances of Financial Success with This Information
If you want to be a financial success story, you can’t be wasting your money. There’s a ton of useful information above to help you retain more, which is one of the key ingredients for building wealth.
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