9 Money Habits That Can Help You Build Wealth

Marisa Torrieri

woman sitting on steps drinking waterWhile a six-figure inheritance or high-paying job can land you in the top 1% of earners, it’s the little things—your money habits—that often make the difference between a life of prosperity and one of constant financial stress.

Just ask David Blaylock, CFP®, of LearnVest Planning Services, who doesn’t simply advise his clients on the merits of good money habits—he practices what he preaches.

For example, “I do a periodic review of all the subscriptions I have—the ones that hit my credit cards each month,” says Blaylock. “You’d be surprised at how many subscriptions we all have and how many go unused. You could create some significant savings each month just by looking at those things.”

Taking inventory of your recurring subscriptions and services is just one habit that can get you on the road to better fortune.

“If you look at the average amount of money you will earn over your lifetime, and figure out how many years you are working—most people earn more than a million dollars over their working life but very few people become millionaires,” says Nancy Butler, CFP®. “How they manage what goes through their fingers usually makes the difference.”

So what are these easy changes that can help move you further along the road to prosperity? We asked two financial planners for their favorites.

1. Reverse Your Thinking

We know: After taxes are taken out and the bills are paid, your paycheck can seem a little anemic—which can make the idea of having to save for retirement too seem like a real stretch. But to build wealth, a change in mindset is required. Namely, instead of spending the rest of your take-home pay, you’d actually take another cut of your paycheck and put it toward your biggest financial goals.

“Most people spend some money, pay their bills and save what’s left,” says Butler. “And that’s backwards: You should be saving for your financial goals first, paying your bills and and then consider spending the money you have leftover.”  Another trap is putting your good money habits off till “later,” when life will get easier. The thing is, somehow the minute your income increases, the demands on your money seem to as well.

Now, keep in mind, we’re not suggesting you sock all of your money away and live on rice cakes. As Blaylock puts it: “I’m not asking you to put $1,000 away a month, I’m asking you to put away $50, or a small amount that you can afford. We really can’t underestimate the power of starting small, because most of the time that momentum builds, and once we see progress, we tend to repeat behaviors.”

RELATED: Can’t Get Going on Your Long-Term Money Goals? Match Your Strategy to Your Personality

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  • Guest

    I’m getting a bit bored with the recycled advice. Any new insights or strategies within the last year?

    • BD

      Unfortunately there isn’t that much to say about money other than spend wisely, save more of it, and invest while still young. Every money article and magazine just res-pins that 1000 ways hoping to find something that resonates with the reader

      • Vivian F.

        Here’s my advice -
        1 – Save long enough for big purchases (car, house) so that payments plus all other expenses don’t go over 50% of net monthly income. Save the other 50%
        2 – Never EVER carry a credit card balance (unless it’s an emergency)
        3 – Every time you get a raise, automatically direct the difference to a savings/investment account
        4 – Understand the difference between a want and a need and try to indulge in fewer ‘wants’
        5 – Cut back spending on monthly expenses like cable, internet, insurance, etc. (look at $25/month auto insurance from InsurancePanda, for example)
        6 – Buy healthy foods and avoid excessive eating out. Pack your own lunches
        7 – Focus on accumulating assets. A car is not an asset. Better if they generate cash flow.

        Might be recycled…. but it works!

    • GoldRW

      - Switch from whole life to term life insurance, your policy should match your current liabilities.
      - Stop contributing extra into retirement accounts and do just matching or better yet stop completely and invest for retirement yourself.
      - If you live near your parents and they cook, see if they’re willing to cook extra food for your to pack up for lunch/dinner which will last a few days. Instead of paying restaurants you can pay them; win/win.
      - Grow your own fruits and vegetables.
      - Encourage your coworkers to bring lunch with you.

      • Bill

        Only a fool would not take advantage of free money from a match.

  • flours

    I agree with Guest…One of my favorite series in Money Magazine is where they take real people and go through their finances and discuss their goals with a financial planner and what changes they can make towards those goals…also, they don’t focus on the twenty-somethings like this site seems to do…granted I wish I knew some of this when I was 24, but I’m not anymore, so can I get some new advice?

  • jmaggief

    Listen to my insane story. I’m 64 years old and taking care of my mom who is 85. I took her in cuz she is starting to show signs of dementia. My youngest brother has power of attorney and only leaves $300 a month from her $1367 social security check plus she gets $271 a month from her insurance business. And with Obamacare that might vanish. So she is living on $571 a month. She has doctor bills like $40 specialist co-pays and other medical bills. I have to drive her everywhere. She pays me nothing for her care. And I know my brother thinks I should be helping her for free,too. He just sold her condo for 123k and put the money into his account. He wants her to go into assisted living but that costs $3270+ a month and that’s without any dementia care. My mom said she won’t go into assisted living so if I decide not to let her stay with me then the police will have to be called. None of my other siblings say they can take her( there’s six). I called the VA to see if they could pay me to care for her(my dad was a vet) but they need prove that she’s paying me money and since my brother takes all her money she has no way to give me anything. But later I thought the VA won’t give me any money cuz they’ll see use the 123k from her condo sale which make sense. I have some health problems myself so I don’t even know how much longer I can keep her with me. And

    • Melinda

      Wow! This is so unfair to both you and your mom. I was in a similar situation. If you are in California…or anywhere else..I want to suugest you contact A Place For Mom and Jewish Family Services…they assist no mater what age race or gender. Copy and paste exactly what you have here and email them. You will get help and good people to talk to. I wish you the best.

      • ripper69

        A very similar thing happened to me. I wish I knew what state you are in (I am just turning 64) but have a lawyer in the family that goes after anyone hurting others. He beat my selfish family and would beat yours. Bryan is right–get a good attorney. If one doesn’t seem excited about the case, go to another. That brother is taking advantage of you and so are the other siblings. Don’t let them make you a doormat. Go after what is right for both you and your mother.

        • ripper69

          There was a well-known case in Colorado when I was there. The woman was getting demtia but was still pretty clear. The brother lived there in the area and got the power of attorney. Her two daughters lived in California and wanted her to come live with them. The brother never visited the mother and gave her care over to a state run care service who charged $10 for a bottle of aspirin. He was using her money and giving this company and person working with the mother any money they wanted. The girls went to court and asked to have the power of attorney reversed so they could take her to California where they had a place for her. Despite the brother’s effort, she told the judge she wanted to go with her daughters. The judge refused to let her go. They took it to court 2 or 3 times and the judge turned them down and told the daughters if they tried again he would put them in jail! That is why you need a lawyer!!! I couldn’t believe it and neither could most of Colorado Springs where I lived.

    • bryan

      If you are caring for your mother then you should have power of attorney and you should be handling her finances, not your brother. Furthermore, your brother should not have a right to take all of the proceeds from your mother’s condo. You need to speak with an attorney. If your brother does agree to make the situation more fair, you may need to sue him.

      • ripper69

        I wanted to agree with Bryan. Get an attorney–a good one that specializes in this kind of thing. Sometimes it takes a huge kick in the pants to change things that have to do with money.

    • Bill

      You can take legal action against your brother. He is violating his fiduciary responsibility under the power of attorney. He is stealing from SS as well.

  • Spotted Finger

    I agree about the recycled financial information and it being geared towards younger Americans. I also agree with the gentleman who asked for financial advice for older Americans however I’ve already started my research on my own. How did I start this journey you ask? Honestly, I prayed over it and stepped out on faith. Then suddenly books begain to appear for example my place of employeent was having a used boook sale and I purchased Economic Explained which discusses the history of money, how technology inpacts the economy and the effects of slavery on the economic growth of African-Americans presently. Powerful stuff. The next book I purchased was The Credit Diet by Father Furhman. Acually is name is John Furhman I refer to him as father because this man mad an immediate impact on my fiscal life and is single handley responsible for changing my thought patterns as it
    pertains to building wealth. Oh Suze Ozman and
    the book entitled The Five Laws of Money. It didn’t impact me as much as the first two reads however I did learn one powerful fact from Suze and that is if you are not honest about money, you will never possess any. Last but not least one of the founding Fathers of our nation the Honorable Benjamin Franklin who is know mostly for discovering the probability of electricity was a very financial astute gentleman and he knew the power of compound interest. I’m well on my way and as the ol cliche’ states, it’s better late than never.
    Live Long and Prosper!

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