6 Frugal and smart money habits of young millionaires

                  

Have you ever wondered why certain people are so wealthy? Or why do some groups of people seem to flourish more than others?

If you will take a closer peek you will see that it’s the money habits that make them the wealthiest people.

And if you’re tired of living paycheck to paycheck, having your phone regularly cut off, or making excuses to skip dinners with your friends, then you can use these habits to take control of your money situation and live a happier and more frugal lifestyle.

  1. Set a budget and stick to it 

Millionaire money habits are mostly about mindset. A major part of that is creating a budget and sticking with it. Here’s how:

  • Write down what you make each month.

  • Subtract the amount you want to save.

  • What is left over is what you have to work with.

  • Then write down your fixed expenses, the things that are necessary like your rent or mortgage and utilities.

  • Budget a fixed amount that you can stick to for food and other necessities.

  • If there is more leftover, you can either save more, budget a little discretionary money for your occasional wants or use a blend of the two methods.

  • Keep track of your expenses as you pay for things so you see how much you have left until you get paid again.

  • Use coupons whenever possible, especially on things you buy often.

  • Stick to your budget and don’t touch your savings.

  1. Set financial goals

Most wealthy people will tell you that they have invested at least 20% of their income (between savings and investment products).

Setting a goal to save at least 20% will give you a better shot at financial freedom. This figure will likely see you reach the financial milestones of the wealth that you desire.

If saving 20% is a stretch right now then save whatever you can and build the figure up. Something is better than nothing.

  1. Invest for future

Wealthy people invest their money wisely and do it regularly to create wealth. When you start investing early on in your life you will have the benefit of time. Time is the catalyst to make your money grow.

Here are some typical areas where the ultra-rich invest their money.

  • Investing in assets - Property, Savings, Gold

  • Investing in new high-income skills- An investment in knowledge pays the best interest. How can you invest in yourself? Read more books, go to educational seminars or events, or hire a coach. Take a new course to learn a new skill.

  • Investing in What You Understand- Warren Buffet famously said, “Never invest in a business you cannot understand. If you feel confident that you understand what you want to invest in, develop a plan. Follow the 100, 10, 3, 1 rule. It means you look at one hundred deals, break it down into ten possibilities worth considering. From those ten, narrow it down to three options that have very good potential, and finally narrow it down to one.

 As a general rule of thumb, you should save at least 20% of your income each month for your savings plans, emergency fund, retirement, and investments. Investing is one of the best things you can do to obtain wealth.

  1. Live Below your means 

A key millionaire money habit involves living below your means. You set aside savings that you don’t touch, and you build spending habits and expectations that help ensure that you don’t use more than you make.

One helpful tip is to cook more often. Going out to eat is fun, but it’s also expensive. Instead of treating a night out like a regular occurrence or something, you do when you don’t want to cook, treat it as something that you only do on special occasions.

  1. Drive a reasonable car

One of the biggest lifestyle traps we can fall into involves the vehicle we drive.  A major millionaire money habit that will really help is to change how you think about the car you drive.

The car you drive should be reliable and inexpensive. You can save so much money by driving a reliable used car that you keep as long as it remains reliable. You will save thousands right off the bat just by purchasing a used car. Then you keep on saving the longer you drive it without opting for another car purchase.

  1. Automate savings 

This is how the rich save money. They set up automatic payments to their savings and investment products.

Automated savings will boost your savings and can help you with budgeting and with managing spending habits, as you can't spend money that has already been transferred into a separate account.

 

The key is to manage money better with a budget and work on reducing any debt. Then start saving, gradually moving into investing into areas you genuinely have an interest in and understanding about.

Next, it’s about creating other streams of income so that you’re in a good position should any financial trouble come about.

Implementing these millionaire money habits will help you to build wealth and live a lifestyle you’ve been always dreaming for.


 


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