Many people in the world look around and wonder how the rich actually got that way.
Some are envious, some are angry, some think it’s unfair, some rejoice in others fortunes, and many understand that wealthy folks do more good in the world than all of the government agencies combined.
Regardless of what your personal beliefs about wealthy people…whether you’re one of them, working on developing wealth for yourself or don’t have a clue where to start, there’s one thing that wealthy people have that other do not…they have great money habits.
You see…habits are actions, choices, thoughts, etc. that we do without having to think about what or why we’re doing them. And, when it comes to our finances, for a load of reasons I’ll go into as we discuss our Creative Wealth Principles, habits make becoming, and staying, financially free all that much easier.
So…let’s talk about money habits for a bit.
We actually have two kinds of habits:
- Habits we do
- Habits we don’t do.
Yes, I said, habits we don’t do.
For example, you’re either in the habit of brushing your teeth in the morning or you’re in the habit of NOT brushing your teeth in the morning. Yuk!
Another example…you’re either in the habit of saving money from every paycheck or you’re in the habit of NOT saving, i.e., you’re in the habit of spending all of your hard earned cash with little or no regard to the older self inside you who’s going to need money to live on later. But more on this in another article.
Financial habits work the same way. Just like not brushing your teeth, the choice to not establish and practice good financial habits, is going to put you in an unhealthy, uncomfortable financial situation later on in life.
And, just like brushing your teeth, it’s hard to develop great financial habits unless you’ve:
- Been taught them as a child.
Took a personal finance camp or class in school.
Been mentored by a financially responsible adult.
Learned the hard way, which is no doubt the most common way people say they learn about money.
The most challenging aspect of this ‘habit thing’ is that most of us are walking around simply not knowing what we don’t know so it’s often impossible to know that there are actually financial habits awaiting us.
But now that you know…
Where we learn our financial habits
Financial habits are established early on in life whether we want them or not. We acquire them through listening, watching, and experiencing how money works from our parents, relatives, teachers, mentors, friends, bosses and especially the media.
And while learning to invest in different types of financial products (real estate, business, stock market, etc.) can feel a bit like learning rocket science, please know there is no magic to creating it nor do you have to be a special type of person to develop it.
You do, however, have to choose to be financially free and then you have to learn and practice several basic financial principles, aka habits, and these principles are the same principles virtually ALL financially free people use to get, and stay, financially free.
Simply stated, financially free people have money management habits that got them where they are and keep them there.
I suppose you’d like to know what some (or all) of those habits are? Great, keep reading. (If you want to peek, you can go to http://creativewealthintl.org/principles.php to see the 30 we teach in our other financial literacy programs).
Seven of the most important money habits that will lead you toward financial freedom
Developing healthy financial thoughts, beliefs and attitudes. Without a doubt, developing the right thoughts, beliefs and attitudes about money and wealth creation is by far, the most important first step when you choose financial freedom for yourself. Without the right things happening in your brain, that subconscious of yours will take over and sabotage you in ways you can’t even begin to imagine!*
Paying yourself first: This means you save money from every paycheck to put to work for yourself first BEFORE you pay everyone else.
Save early, safe often. This simply means that you start saving early and you save every time you get paid. Remember that we teach financial education to youth so they have a slight advantage over adults but every adult on the planet can start saving 10% of their paychecks and make huge progress toward financial stability.
Putting your money to work for you. This is investing in assets like real estate, stock the stock market and business ventures that grow in value and/or produce regular cash flow for you to live on…i.e., pay your expenses.
Only borrow money if it’s going to make you money. Tip: never use a credit card to buy a liability. Instead use debt to buy assets (example: real estate).
Make more money than you spend and spend less money than you make. This simply means to live within your means.
It’s better to tell your money where to go than to ask it where it went. Wealthy people tend to budget and and spend time doing financial planning, either themselves or with a trusted financial advisor.
There are many more great financial habits out there but these are some of the most important.
How to develop great financial habits
Once you choose a financial habit you’d like to embrace and make your own, it’s good to make sure you really understand what the habit entails. Spend time researching and asking questions to learn all you can about making the habit stick.
Another awesome way to help ensure your success is to get an accountability partner. Find someone you can call every morning or evening or once week. Whatever schedule works for the two of you.
Or, find a financial mastermind group that can help you make progress and keep you moving forward toward your financial goals. Ask your family members, friends and colleagues for referrals or look online. There are a gazillion places to find groups of supportive people (hellooooo, Facebook?)
One of THE most important foundations for developing good financial habits is having a huge WHY…a ‘why’ that is profound and unshakable. A why that is backed by the core of your being… a why that drives you.
When you have a ‘why’ that is coming from your true self, a why that comes from your core values and desires, it’s pretty difficult to be thrown off your track.
And yet, even with a huge ‘why’, you will probably occasionally get thrown off your journey. It’s OK. It happens to the best of us and it’s what helps us learn, grow and mature.
The great thing about having a big enough ‘why’ is that it’s super easy to right back in the saddle (apologies for the horse analogy if you don’t care for them or are afraid of them…you have to admit there’s something stupendous about a horse!).
So, what habits are YOU willing to develop in order to experience financial freedom? Take a few minutes and write them down in a journal, in your computer or where ever you’ll see them every day.
Then, each day, take just one of the habits you’d like to incorporate into your own life and take one step towards making that habit a part of your every day comings and goings. It won’t be long before it will second nature and you’ll be ready to add the next habit.
Now that wasn’t so hard, was it?
* One of the best books on financial beliefs is, Secrets of the Millionaire Mind, by T.Harv Eker. Most financially astute people I know personally have read this book more than once!