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Wealthy People Save Money Like This

Wealthy People Save Money Like This

There’s no one among us who does not like to have more money. If you sometimes wonder about how the rich and successful have so much of it though, you need to read on. We have compiled a list of hacks that you can apply in your daily life to save money the way wealthy people do.

1. Be careful about small expenses

All of us are usually careful about making big investments and huge purchases. However, we tend to spend recklessly on seemingly small expenses.

But of course, these small expenses can amass to a big amount.

As Suze Orman rightly pointed out, “Look everywhere you can to cut a little bit from your expenses. It will all add up to a meaningful sum.”

2. Focus on the future

It is very easy to spend money for getting something that we like but at the end of the day, you will end up spending everything no matter how well you earn. Shift your focus to the future instead of getting satisfaction in the present.

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“You can be young without money, but you can’t be old without it.” – Tennessee Williams

3. Don’t buy unnecessary things to make an impression on people

Although we all like to have good feedback from our peers and friends regarding the things we own, we need to set a limit for us. You should buy things that you need but don’t just buy those to impress others. Otherwise the sky isn’t the limit for buying things!

“Stop buying things you don’t need, to impress people you don’t even like.” – Suze Orman

4. Put things in black and white

There are so many expenditures in today’s world that you would end up without any savings if you don’t plan and budget your money; the inflows and the outflows. Wealthy people know where their money comes from and where it goes.

An Excel sheet can really help you in this regard.

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“A budget is telling your money where to go, instead of wondering where it went.”- John C. Maxwell

5. Work hard

Unlike the common perception that wealthy people just have fun and enjoy their life, the reality is that they work harder than the common person, at least in the most productive age. So try to increase your income, and when it gets increased, save a larger portion of it than ever before.

“I like business and the truth is I save way more than I spend. I invest. I plan for the future. I have a special eye for opportunities and work harder than anyone might expect.” – Sofia Vergara

6. Save a huge portion of your income

Again, we think that wealthy people are always splurging and spending on things. No, they are not. That is why they remain wealthy.

They always save a portion of their income. So save a large proportion of what you get. This will ensure that you do not run out of money at any point in time.

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“Save one-third, live on one-third and give away one-third.” – Angelina Jolie

7. Make the most of sales and bargains

Just like us, the rich love to get the highest value of money. They always try to look for getting more value through finding great deals, bargains and discounts.

“Why should you pay more for something that someone else is paying less for?” – Sarah Michelle Gellar

8. Invest your savings wisely

We usually ignore the small amounts but such tiny amounts can add up to a substantial sum. If you have more, it is even better. To top it, if you invest the money properly, you will be amazed at the result yourself.

“A penny here, and a dollar there, placed at interest, goes on accumulating, and in this way the desired result is attained. It requires some training, perhaps, to accomplish this economy, but when once used to it, you will find there is more satisfaction in rational saving than in irrational spending.”  – P. T. Barnum

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9. Practice the Millionaire’s Formula

A common man’s way of thinking is usually that he saves after meeting the necessary expenditures. A wealthy person’s style is the opposite: we like to call this the Millionaire’s Formula.

Here’s how it goes: upon receiving your income, put a certain percentage towards giving back to the community, and also a certain percentage for your investments for your financial goals. Only spend what is left.

“Do not save what is left after spending, but spend what is left after saving.” – Warren Buffet

10. Close leakages

The wealthy don’t ever pay any unnecessary charges. They remain very careful about the fees and charges that can be avoided.

“Beware of little expenses; a small leak will sink a great ship.” – Benjamin Franklin

Follow these simple, practical tips in your life and you will be able to see the difference yourself. Happy savings!

Featured photo credit: DSC04319-B.jpgBy DodgertonSkillhause via cdn.morguefile.com

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Published on September 17, 2018

How Being Smart With Your Money Leads to Financial Success

How Being Smart With Your Money Leads to Financial Success

Achieving financial success is not something that just happens. Maybe if you win the lottery or something, but for the average person like you or me, it comes from a series of small steps you take over a long period of time.

With each step, you form a new smart money habit. And with each smart money habit, you build towards financial independence.

So what sort of habits can you form to get on that path? Let’s take a look at smart money habits you can start today to get you closer to a financially independent future.

1. Avoid being “penny wise but pound foolish”

It’s tempting to try saving a couple cents here and there when buying small items. However, that’s not where the real money is saved. You’re putting in extra effort for something that doesn’t move the needle.

You get the most bang when you’re able to cut down on your bigger bills. For example, finding a lower interest rate for your mortgage could save you $50+ per month. And cutting your transportation bill by purchasing a cheaper car or taking public transportation can provide large gains as well.

So, look at your recurring expenses such as housing, transportation, and insurance, and see where there’s wiggle room. It’s a much better use of your time than trying to pinch pennies here and there on smaller purchases.

2. When you want something big, wait

Impulsivity can get you in trouble in most aspects of life. Finances are no different.

It’s human nature to see something and want it right then and there. It starts as a kid in the checkout line at the grocery store, and it continues on through adulthood.

We get an idea in our head of something we want, and it’s hard not to go out and get it right then.

A good example is wanting a new car. Perhaps you’ve had your car for several years. It’s crossed the 100k mile mark. Maybe maintenance is due, and you’re annoyed that you need to replace the timing belt or purchase new tires.

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So, you get the itch.

You start digging around online, and you realize you could trade in your current car for something newer and more exciting… all for a few hundred bucks a month. Then you get obsessed.

Here’s where you have to take a step back.

Your newfound obsession is clouding your judgement. Rather than giving into the impulse, wait it out.

Set a timeframe for yourself. Maybe you come back to the decision three months down the road. See if the obsession lasts.

It might, but often, a funny thing happens. Often, you forget about it. And often, you find that the new car wasn’t a need at all.

The impulse faded. And you just saved yourself a ton of money.

3. Live smaller than you can afford

You finally get that big raise. And you want to celebrate – and why not?

You’ve been looking forward to this forever. And after all, it was all due to your hard work.

That’s fine, splurge a little. However, make it a one-time deal and be done.

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Don’t get caught in the trap that just because you’re now making more money, you should spend more.

Too often, people get more money and feel like they that gives them the means to buy a bigger house, a bigger car… you know the drill. Resist.

The fact is that living smaller than what you can afford is one of the fastest ways to build savings.

But if you constantly upgrade as you begin to make more, then you’ll never get ahead. You’ll just build up more debt along the way and have just as little wiggle room as before.

4. Practice smart grocery shopping

Food… it’s one of the biggest portions of any budget. And if you’re not careful, it can be one of the biggest drains on your wallet.

But luckily, there are a few things you can do to ensure that you stay smart with your money when buying groceries.

Create a grocery budget

Set a strict weekly grocery budget. When you know how much you can spend on groceries, you can then plan your weekly menu around it.

Once you know what all you need, you can go shopping and keep a running tally as you shop to ensure you’re on track.

I tend to do this in my head, rounding for each item. However, writing it down as you go would probably work best for most people.

Make a list… and never deviate

Never go to the grocery store without a list. If you go to the store with a ballpark idea in mind, you don’t have a true ide of what you need.

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You’re not well-researched. You don’t know what the sales are. As a result, you’re going to make decisions on the fly.

These impulse decisions will lead to overspending, which will derail your grocery budget.

Eat before going grocery shopping

It’s also important to eat prior to going to the grocery store. Hunger is a powerful force.

If you’re shopping on an empty stomach, everything is going to look good. In particular, you may find a lot of ready-made, processed snacks will look enticing.

After all, you’re hungry now and that food is easily available. So subconsciously, you may lean towards those items.

Unfortunately, not only are those items typically less healthy, but they’re likely more expensive. You pay for convenience.

However, when you eat prior to shopping, then you’ll shop with a clear mind. Your hunger won’t cloud your judgement, influencing you to make poor decisions like a cartoon devil resting on your shoulder whispering in your ear.

This makes it much easier to stick to your grocery plan.

5. Cancel your gym membership

Now that you’re all set on your food, it’s time to get smart about managing your budget in terms of physical fitness. And let’s begin by avoiding the gym. The gym bill, that is.

The average gym membership costs around $60 per month. That’s $720 a year.

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Yet, two out of three gym memberships go unused. That means two-thirds of people who have a gym membership are literally giving away almost a thousand bucks a year. It’s crazy!

I recommend seeking an alternative. One good alternative is to look into fitness streaming services.

Streaming services allow you to stream hundreds of workouts like Insanity and p90x, right in your own home for around $10-20 a month. That’s $40-50 less a month than the average gym membership.

Of course, then there’s the free option. The internet is full of free workouts that you can do on your own with minimal or no equipment.

For example, there’s the Couch to 5K program, that I personally used a decade ago to ease myself from couch potato to running my first 5K race. If I could do it, anyone could.

Then there are free resources like reddit that have limitless information on workouts. The Fitness subreddit has done all the research for you, populating workout tips and detailed workout routines for anyone to use in their wiki.

There are several routines that require no equipment. And you can join in on the subreddit to become part of the community, making it easier for those seeking comraderie and encouragement in their fitness goals. All for free.

It’s baby steps… And baby steps can start now!

I’ve never met anyone that can’t stand to be a bit smarter with their money. And on the flip side, anyone can get smarter with their money. But remember, it doesn’t happen all at once.

Begin by fighting your impulses. Prepare for the week and be smart at the store. And cut monthly expenses like gym memberships that are overpriced and you probably aren’t getting your money’s worth out of anyway.

The devil is in the details. And the details can change your lifestyle and prep you for a financially independent future.

Featured photo credit: Unsplash via unsplash.com

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