The 3 Everyday Money-Management Habits of the Rich
The wealthiest people are not always the most intelligent, talented and charming among us. So what factors gives them that vital edge that builds their financial resources while others struggle to make ends meet?
It’s all in the habits — daily habits that gravitate around being money-smart. Habits are a subconscious, second-nature activities that make up 40% of our daily activities. They kind of put you on an autopilot.
Is your financial habit limiting you or building a viable path to a secure future for you? What can we learn from the best money management habits o f the rich? Here are 3 habits you should know.
They Live Within their Means
Rich people often spend way less than they earn. Instead, they focus more on the future and avoid overspending in the present. They often set an 80/20 percent rule on their net income or a similar ratio. They create smart budgets, allocating a part to meet their everyday needs and save the rest.
For example, they may determine to spend no less than 25 percent on their housing, regardless of whether they own or rented the property. They may also allocate no more than 15 percent on food and limit their entertainment budget to 10 percent of their total expenditure.
Wealthy people are astute and set their sights on discovering what a profitable investment is and what isn’t. They take calculated risks and seize the opportunities. Their minds are set on long term goals and geared towards building wealth from their net income within a specific, realistic period, 10 years time.
To do this, rich people often engage in some venture, even if it’s on apart-time basis. Their imaginations roam, and they stir latent possibilities like their talents, hobbies, or a property with greater profit-generating potentials in the future; and fully explore them.
The rewards may not be instantly obvious, but rich people know the effects are there, only subtle in the first few weeks, days or months. They know the effects of their money-saving habits become dramatic in the long term.
Most people think saving is a difficult task. It isn’t when you commit to it and disciplined about it. And it doesn’t have to be a chore, especially with a smart money-saving app like B. For example, the B app comes with smart tools like a tagging function that helps keep track of your spending and tells you when it looks like time to spend or save money.
Or, if you live like the other half, this stuff won’t really matter. We can dream!