Top 10 Money Habits of People Who Never Broke Financially

“A simple fact that is hard to learn is that the time to save money is when you have some.” — Joe Moore

People say that money isn’t everything in life. To some extent it is true. However, we also can’t deny the fact that money is required for almost every pleasures of life.

Suppose you are taking your kid out for a walk; and he pleads for an ice-cream. You must have that much extra cash with you to splurge on it. And, for that, you must have some savings.

If we study the money habits of people who never broke financially, we find that they had certain things in common.

Let’s uncover the rich money habits of people who always have enough to live.

Good Money Habits That You Must Adopt

Learn to avoid certain bad money management skills that trouble you financially. These money habits will help you to save, budget, and improve your finance in everyday life.

1. Don’t Spend Too Much on Your Housing

Educate yourself financially with these good money habits that every couple must know. — Credit: Freepik

The population pressures in our mega-cities are huge, and this has created a huge demand for housing. This has made the real estate expensive and rents have gone sky-high.

A ballpark figure is that you shouldn’t spend more than 25 percent of your salary on housing. If you spend above that amount on your rent, you won’t have anything to save.

So, ideally you should buy a flat, instead of renting one. Even if you have to sell out a booking amount, and the monthly E.M.I.s will pinch, at the end of the day you will be creating an asset.

2. Mix With Friends Who Have Good Money Habits

How you save money, depends on your money management skills; it also depends on the type of friends you mix with.

Surprisingly true!

Suppose you are a teacher and have a modest salary. Your best friend is a rich heir to a family fortune. He/she has a habit of inviting you to nightclubs for partying. Every time you go there you end up blowing a huge amount. This will put a huge strain on your personal finances.

A study of financially successful people has revealed that they all mix with those friends, whose money spending habits match theirs.

3. Spending on Credit Cards? A Big No-No!

Educate yourself with these top money managing skills and habits to stay wealthy and worry free financially. — Credit: Freepik

To improve your finance, you have to learn to do away with credit cards.

Credit cards are psychologically designed to make us spend more than our means. And the interest that is accrued gets compounded over and over. This means that the total amount that you might pay for an impulse purchase, might be double or triple the actual amount.

So, it is better to spend cash or use your debit card while making purchases. Your budget will then be in real-time.

4. Don’t Spend on a Whim

“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” —James W. FrickClick To Tweet

One of the basic financial management skills is that you should first plan before you spend.

Suppose you had been eyeing that lovely purse for a long time. You should not buy it without planning. First, save money, maybe a small amount each month. Then, when you managed to save the entire amount, buy it. In this way, your monthly budget won’t be disturbed.

Some people live from paycheck to paycheck and spend their money as soon as they receive it. They buy anything that catches their fancy, and this leads to financial ruin. So don’t be careless about such money habits!

5. Curb the Cable and Satellite T.V. Expenditure

Improve your personal finance with these smart money habits that every person must know. — Credit: Freepik

With a plethora of entertainment, sports, and news channels, people are hooked to television, thus burning a hole in their pocket.

Each channel costs money and the total sum of all the channels adds up to a tidy sum. The influx of internet-based entertainment channels like Netflix and Hotstar means more choice for the consumer at a high cost.

You should be selective about which channels you watch, and subscribe only to those channels. In this way, you will be able to save money.

6. Avoid Going Out for Lunch Frequently

Our busy schedule leaves little time for us to cook food at home. Many office-goers find it easy and convenient to go out for lunch.

It has two big drawbacks’: firstly it is expensive and burns a big hole in your pocket if you do it regularly. Secondly, it is bad for your health and will also increase your waistline.

The same logic applies to frequent visits to restaurants. You can save a lot of money by avoiding eating out. Outside food bills take up a large chunk of people’s monthly budget.

Try these quick breakfast recipes ideas for your hurry morning.

7. Have an Emergency Fund: Save For a Rainy Day

Learn to save, and budgeting your money for emergency troubles with these good money habits. — Credit: Freepik

Disasters and emergencies come without any warning. Hospitalization for serious diseases can wreak havoc on our finances.

If we are not prepared for such exigencies, we have to take either a loan or pay it from our credit card. Both are expensive propositions in the long term. So it is best to save for an emergency fund by keeping aside a certain amount each month.

It can be in the form of a S.I.P. (Systematic Investment Plan) or a Mutual Fund.

8. Reduce Your Entertainment Spending

“Never spend your money before you have earned it.” —Thomas Jefferson

It has been found that financially successful people do not spend more than 10 percent of their household budget on entertainment. This means you have to cut down your going out for movies or restaurants or within reasonable limits.

One way to reduce it is, to opt for an online streaming service. These days there are many service providers like Amazon, Zee who have a huge library of movies and other content. It is a lot cheaper to watch at home with your loved ones rather than going to a multiplex and spending a bomb!

9. Start Bargain Shopping

Improve your finance with these smart money habits that most people don’t incorporate into life. Include these top 10 money habits of people who never broke financially. — Credit: Freepik

Where do you think millionaires go for shopping? Some pricey mall? Guess again!

Self-made tycoons often do their shopping from discount stores. It is a habit that is ingrained in their mind.

Discounts go a long way to increase our savings. Most big retail stores offer discounts ranging from 2-5% on groceries and other household items. If you do your monthly shopping combined, as many people do, the amount saved can be substantial.

10. Don’t Have Wine with Dinner!

It will make you tipsy and you won’t be clear-headed enough to do your financial planning! Jokes apart, avoid wine with dinner especially if you are in a restaurant.

Nowadays it is a trend to pair wine with the food that you are having, in upscale restaurants.

Most restaurants mark up their wine 2-3 times and make a huge profit at our expense. And the sales and luxury taxes also pinch. Ideally, you should go to a restaurant that does not have wine on their menu.

If you want to order wine then it is better to order a bottle than glasses, because glasses have much higher mark-ups than bottles.

“The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.” —T.T. Munger

We hope that the above list will help to improve your money habits and finance to lead a richer life both truly and metaphorically.

If savings is your goal, you have to work towards it with lots of discipline and self-control. And you will find the pot of gold at the end of the rainbow!