7 Simple Financial Habits That Can Help Make You Rich
Winning the lottery or getting lucky with risky investments may make headlines, but most people build their long-term wealth quietly and slowly.
That’s because putting a few simple practices in place, like personalizing your savings and investing, can help you build your nest egg and reach your goals over time. And by cutting small expenses, you’ll have more money to put towards your future. Here are seven money habits you can implement today to help increase your overall worth.
1. Automate your investments
Saving and investing your money is consistently easier when you don’t have to think about it.
If you have a 401(k) or similar employer-sponsored retirement savings plan, you probably already have automatic investments set up. But you can switch your contributions to tax-advantaged accounts like individual retirement plans (IRAs) as well. Although the experts at Fidelity recommend that you save 15% of your pre-tax income each year in retirement, start by contributing what you can and increase your contribution amount each year, as well as when you get a raise.
2. Do insurance research
If you already buy home and auto insurance, you don’t need to stick with the same provider. In fact, you may be able to save money by purchasing regularly, such as every year or two or when your policy expires.
You won’t always get a better deal if you check again. But sometimes, you may find a cheaper option or be able to negotiate better terms with your insurance company.
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3. Stick to cheap stores
Sometimes, the store brand is just as good as the big names. When visiting the supermarket, try to automatically buy store-bought items such as pantry staples, frozen vegetables, coffee, paper towels and cleaning supplies. This won’t produce a huge windfall, but it can help you save money without sacrificing quality.
4. Negotiate finances
When it comes to negotiating costs, you’ll never know what you can get cut unless you ask – and you might be able to negotiate more than you think.
For example, sometimes banks or credit card companies are willing to waive payments if you apply. The same goes for internet and cable companies, and gyms. Also, there may be a promotion going on that you can’t interfere with that you wouldn’t know about unless you asked.
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5. Do a digital purge
Internet marketers often claim that the money is in the email list. If you’ve ever been tempted to buy from a company that sends you regular emails, you understand why. Go through your inbox and unsubscribe from newsletters and promotional emails you don’t need so you won’t be tempted to pull out your credit card the next time you read them.
6. Pay off credit cards regularly
Debt can be an important part of a strong financial life, but it can also be detrimental to your long-term wealth if you don’t prioritize paying it off. This is especially true for high-interest debt, such as credit card debt. Stop automatic payments on credit cards and other high-interest debts to make sure you stay ahead of debt, and don’t lose your interest payments.
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7. Reduce impulse purchases
If you’re happy with something you see online or in a store window, it can be easy to pull out your credit card and swipe. Try using a time-out schedule, where you don’t make any non-essential purchases for more than a set amount of time, such as purchases that cost more than $100 in 24 hours. Waiting to buy things that don’t matter forces you to evaluate whether the item or service will add real value to your life. A time-out rule can reduce unexpected spending and keep more money in your wallet.
