It is mind-blowing how so few people realize they can become rich, by leveling-up with their money habits. Think about it, how many people do you know earn a lot of money and are not even close to being rich? The subject of money remains an emotional topic for many people, and that is why so few people are comfortable talking about their financial matters.
In this article, we are going to look at 3 money rules of thumb and approaches that the wealthy turn into habits. If you are already earning money, you can adopt these principles right away. A small decision today, can lead you towards or away from your goal - keep this image in mind.
Flipping one switch can lead to dramatically different outcomes a few miles down the track.
1. Avoid consumer debt like the plague
Get out of debt immediately. Most people fall into the trap of thinking that once you start to earn, you are entitled to having whatever you want whether you can afford it or not, because you deserve to have the good things in life. You can see where this has taken a large percentage of hard-working folks today.
If you are already sinking in debt, you have to create a strategy to stop borrowing from Peter to pay Paul, and start paying off your creditors systematically. For this, you have to change your money habits. Spend less than you earn, and use the difference to pay off your debt.
It is amazing how so many people hope to wake up and find all their debt gone away! The most realistic way to pay off debt is to commit to making all your required payments plus whatever extra you can throw in, until the debt is fully paid off, instead of only making minimum payment waiting for that one big break that may never come.
2. Only lend what you can afford to lose
Your buddy or a member of your family comes up to you and asks you to lend them some money. Without any form of assessment of how the borrower will be able to repay you, $100 goes out of the window just like that. Lend five more people, and $500 is gone forever. If you are in the habit of doing this, stop. Ask yourself how much money you have you lost so far in this manner.
You have to get into the habit of saying no when you are not in position to help. When you are lending close relatives and friends, especially those who you know are not going to pay you back, lend what you can afford to lose. This money habit will make a big difference in your finances.
3. Stop handing out fish
Most rich people work hard for their money. Heck, poor people work hard for money too. For one reason or another, there will always be lazy people who wait for handouts from those who work hard. Now giving handouts may sound noble but in the long run, it turns out to be counterproductive.
Let's not bring up the ancient Chinese proverb about teaching a man to fish. Giving people free money in the hope that you will solve their problems will only create money problems for you, because you are only feeding into a symptom of a larger problem. You can point them here to the path to start their own journey to financial fitness. They can start with a simple saving habit, with a coffee can and as little as $5 per day.
Stаrt to view money as a non-renewable resource and it will become easier to understand the importance оf managing it wisely. Before you know it, these money habits and approaches of the wealthy will become second nature to you. Adopting these principles will help you achieve your goals by stopping the bleeding today. In future posts we’ll provide you with more ideas on changing your own spending and growing your income potential as well.
Tell us what's on your mind, financially speaking. Can FiClub help you reach your goals?