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Wealthy People Save Money Like This

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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

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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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Lianne Martha Maiquez Laroya

Lianne is a licensed financial advisor, Registered Financial Planner, entrepreneur and book author.

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Last Updated on July 20, 2021

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

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Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

Break Free of Your Finances

Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

Though it seems hard to believe, it is really very simple to get financial freedom.

To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

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Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

1. Stop Unnecessary Spending

We often spend money inwardly, instead of objectively.

For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

To stop this habitual spending, log down all your spending over the course of a month.

Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

2. Plan a Monthly Budget

This is a great opportunity to get serious.

Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

3. Cut-up Credit Cards

Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

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If not, you may want to consider ridding your life of the burden that credit cards bring.

Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

4. Increase Savings

There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

It’s good practice to save up to 15% of your income.

Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

5. Invest Wisely

Consider investing in funds.

Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

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Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

6. Invest in Gold

There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

Another way to invest in gold is through ETFs (Exchange Traded Funds).

These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

7. Stash Emergency Funds

Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

Make it hard to get your cash.

Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

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8. Find Fabulous Mentors

Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

9. Be Extra Patient

Patience is the key of financial success.

Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

Financial Freedom for All

Anyone can achieve financial freedom, regardless of their financial circumstance.

Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

Featured photo credit: rawpixel via unsplash.com

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Reference

[1] Hartford Gold Group: IRA Retirement Accounts

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