People who have made a great deal of money haven’t done so with luck. The rich understand what it takes to make money and to keep their money. If you don’t have the right state of mind and the right mental habits, you might be able to make a little bit of money, however, you will never be able to build on it. If you get yourself in the proper mindset, you have an excellent chance of becoming rich.
Avoid Impulse Buying
Many people who start earning money want to start spending it as fast as they can make it. Instant gratification is what drives many people. Unfortunately, it is this mindset that can cause you to lose all of your money. It is actually emotion that drives you to be an impulse buyer. If you are spending money on clothes that you need or expensive dinners out, you will watch your bank account dwindle down to close to nothing. Before you make a purchase, you should ask yourself two questions.
First, do you really need the item that you are planning to buy? And second, can you live without the item? If you answered yes to both questions, you should wait a week before you make the purchase. This will give you a chance to really think about it before you buy it. In some cases, the time that you have to think will change your mind. You should follow this method every time you are planning to make a large purchase. You don’t need to do this before you buy a latte or a new sweater, however, with major purchases, you never want to buy on impulse.
Prepare for Tough Times
People who have money and who hold onto it because they make a habit of saving. You should never spend more than half of your monthly income. If you plan to spend more than half, you better find a way to make more money. If you cannot, you need to reduce your expenses. If you spend more than half of your monthly income, you won’t have any money saved in case of an emergency. The financial recession of 2009 is a perfect example of tough times. Many people lost everything during the recession. They had no money to fall back on and they ended up broke. Other, however, had money set aside, therefore, they were fine and they were able to come back when the recession was over. You never know what is going to happen from day to day. If you have a nest egg in case of a financial emergency, you won’t need to worry.
Focus on Your Physical Well-Being
Part of being financially prosperous means being physically healthy. If your physical health is declining, how can you expect to get out there and make more money to add to your empire? If you stop taking care of yourself, a good portion of your money will need to go to paying for your medical expenses. This is money that could have gone to investments if you were well enough to make investments. If you want financial wealth, you need to have physical health.
Make a Habit of Tracking Your Expenses
Tracking your expenses can be extremely beneficial to your financial well-being. It takes just a few minutes a day and it can greatly affect the way that you spend your money. At the end of each day, you should write down everything that you spend money on. At the end of the month, go through your book and see where your money is going. Chances are you will see unnecessary expenditures that you can cut out of your budget. This can end up saving you a great deal of money and helping you save. The filthy rich may not use a typical notebook, but they certainly do track their spending.
Stay Out of Debt
The last thing you ever want is to be in debt. If you start owing more and more people money, it can take a toll on you. If you wake up each day thinking about everyone you own money to, you can start to feel hopeless, like you will never be able to dig yourself out. You won’t have the desire to keep making money because you know you won’t be seeing a dime of it anyway. The best way to stay out of debt is to avoid taking out a loan. If you don’t owe the bank any money, you are free and clear. To stay out of debt you should live by one rule. If you cannot buy it outright, don’t buy it at all. When you aren’t in debt, you won’t be losing money on interest and finance charges that can keep you in debt for years.
While having an education is important if you are going to be financially wealthy, you should continue learning after you have finished school. This doesn’t mean taking class after class. Reading is a great way to educate yourself. There are plenty of books that were written by men and women who have found great financial success. If you read a bit about how they got to where they are, you should be able to pick up a tip or two. Knowledge is power. If you want to be financially secure, you need to be powerful.
Keep Your Emotions Out Of Financial Decisions
People who are rich don’t let their emotions play a part in their financial decisions. If a millionaire has a family member with a business idea that will surely fail, they will not help by investing. This is an emotional decision that will only lead to a financial loss. You need to learn to separate business from your emotions if you are going to be financially successful.
Don’t Spend To Make Yourself Feel Better
Some people go shopping when they are upset, depressed, or just having a bad day. This might make you feel better for a little while, however, whatever was bothering you will still be there after you have spent all of your money. You will just have another problem to add to your plate. Being broke. If you get into the habit of therapy shopping, it can be destructive to your financial well-being.
Don’t Skimp on the Essentials
Saving money is one thing, however, you should not avoid paying for things that are necessary to save a few bucks. This can end up costing you more in the long run. For example, if you stop getting oil changes to save a few bucks, you will end up with a blown engine. This is much more expensive than a few oil changes. While it is important to be frugal, you shouldn’t skimp on the important things.
Avoid Get Rich Quick Schemes
Nobody has even become right through a get rich quick scheme. They are called schemes because that is what they are. Someone might tell you that they make $90,000 a month by doing nothing. This is not true and it is not possible. If you are going to be successful financially, you need to be willing to work for your money.
If you want to start making money and start saving money, you need to get yourself into a certain mindset. You need to stop with your bad spending habits and start getting into financially sound habits.