15 Habits To Build Wealth

These are fifteen habits that can help you build wealth. It takes time to develop good habits, but these habits can help set you up for a prosperous future.

These are fifteen habits that can help you build wealth. These habits affect different areas of your life. If you start to implement them, you can build wealth over a period of time.

Avoid Debt

You want to avoid debt. The financial system is a debt-based model, which means it wants to get as many people into debt as possible to keep the system going. Many of the common ways that the system gets people into debt are:

• Student loans by going to college.

• Credit cards.

• Car loans.

• Mortgage.

• Buy now, pay later.

The problem is that depending on where you may live, you need to know the basic costs of living each year. Your essential costs are food, energy, and housing.

These are seven steps to get out of debt if you have debt.

Don’t Max Out Your Credit Cards

Credit cards are convenient. Yet, the high-interest rates quickly add up, which can make you into debt if you do not pay your credit card off each month. It is in the credit card company's interest that you continue to borrow rather than pay in cash. The primary way that credit card companies make money is by charging interest and having many different types of credit card fees. This is why credit card companies want you to sign up for a new credit card or raise your maximum amount each year.

Credit card companies also entice you to use their service by saying you get airline miles, discounts, and other conveniences. It could be beneficial if you use the things already that the companies use to sign up for their card and pay your credit card off each month. Otherwise, credit cards are a way to make you spend money you don’t have and spend more than you allocate each month with your budget.

It is best to follow a budget and limit your use of credit cards. You could only pay for things in cash or with a debit card.

Live Below Your Means

The key is to live below your means. This will allow you to save more money. You must know what it costs to live each month for your necessities. There is nothing wrong with driving a used car, renting a smaller apartment than you can afford, or living with your parents if it is a step to help you toward financial freedom.

Doing this is fine despite the culture and social media messages telling you always to have the latest, greatest, or biggest thing.

Lifestyle Inflation

While inflation continues to be a problem and is likely not going away anytime soon, lifestyle inflation is another problem. You do not need to keep up with the Kardashians, the Joneses, or your neighbors. You may have a neighbor that looks like he has his life together.

He may have a nice house in a great neighborhood while driving an expensive car, but he may be in debt to pay for it. While his lifestyle looks nice, he cannot afford his lifestyle. Many people do this to make themselves look better to their friends.

You do not need a fancy house or fancy cars to live. That is just the lifestyle glamorized by movies and social media influencers.

You don’t need to keep up with others. There is no reason for you to try to please people. Living within your means and focusing on reaching your goals is best.

Track Your Expenses

You can start to track your expenses and follow a budget. When you know where your money goes, you are less likely to waste your money on things you do not need.

A 2019 survey found that Americans spend at least $18,000 yearly on non-essential costs. It has also been found that Americans spend over $300 a month on impulse purchases. So many Americans spend on non-essential items and impulse purchases because they must follow a budget and track their expenses.

You can also follow simple methods like the using the envelope method. You use different envelopes to break your expenses into categories: groceries, utilities, entertainment, et cetera.

Source: SWNSDigital

A common excuse often given for not following a budget goes along the lines of “I’m going to overspend anyway, so what should I have a budget?” Following a budget will also help you psychologically.

You want to manage your monthly expenses like you are operating a business. You are your own best asset. You have assets and liabilities, just like a business. You want to work to build your assets and decrease your liabilities. A simple way to do this is to keep track of your expenses. Some online and app budget apps are You Need A Budget (YNAB), Mint, Rocket Money, Empower, and EveryDollar.