5 Common Money Habits That Lead to Wealth

If you’re looking to build wealth, then you should practice the types of habits that lead to wealth creation. That seems easy enough, right?

Unfortunately, as with so many other things in life, it’s easier said that done. Still, you’ll never develop the proper habits if you don’t know about them.

Here are 5 common money habits that lead to wealth.

1. Save First, Spend Later

Some people who offer money tips for millennials will tell them to save money based on what they have left over after spending their income on expenses. However, people who build wealth often have the opposite mindset.

Instead of saving whatever they have left over after paying for their expenses, they save first and then pay their expenses with the money that’s left over.

Why is that so important? Because that habit puts an emphasis on building wealth rather than just living paycheck to paycheck. Rich people who find that they don’t have enough money left over after stashing away some of their income for savings will find a way to earn additional income or reduce their expenses.

2. Set Goals

What do you want to do with your money? What are you saving for? If you can’t answer questions like those, then you’re not practicing the kind of money habit that leads to wealth.

Set financial goals and strive to reach them. Calculate how much money you need to reach those goals at specific points in the future and begin saving accordingly.

Remember: if you shoot for nothing, you’ll hit it every time.

3. Set Boundaries

If you want to build wealth, you’ll likely have to set boundaries about how you spend (and, more importantly, how you don’t spend) your money.

Set a rule that encourages you to save instead of spend. Tell yourself that you’ll never spend over $250 on something that isn’t absolutely essential. Remember, video game consoles aren’t absolutely essential.

Once you set the rule, though, it’s important that you follow it. You’ll have to practice a little self-discipline to make that happen.

This is also a good principle to follow once you merge your money after marriage. Following it will prevent a lot of marital strife that occurs over spending.

4. Live Like a “Secret” Rich Person

Many millionaires don’t brag about the fact that they’re rich. They don’t live in mansions. They don’t have butlers. They don’t drive expensive sports cars.

The reality is that many millionaires are very frugal. That’s part of the reason that they became millionaires in the first place.

5. Prepare for Retirement

You might be young and think that you have plenty of time to save for retirement. In fact, you should start saving for retirement right away.

Why? Because you’ll have a better overall return if you invest early in life as opposed to later in life. Remember, the idea is that your portfolio will increase in value over time. The more time that you give it to increase, the more it will grow.

If you want to build wealth, follow the habits of people who’ve already built wealth. How many of these five habits can you start practicing?