27 Good Financial Habits You Need For Ultimate Financial Success

Joseph Meyer
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Live Within Your Means

Whether you work a full-time job, are self-employed, or run your own business, you need to learn to live within your means.

This habit is critical because you need to avoid getting into credit card debt and long-term financial obligations.

If you’re living paycheck to paycheck, it won’t be long before you run into financial problems. So, if you want to live with financial security, you need to live within your means and put any extra money you make in a bank account. There is nothing wrong with spending, but spend your money wisely. It’s easy to get carried away when you’re spending money because there is always a new gadget on the horizon or a trip to plan.

Fortunately, it isn’t too difficult to live within your means. It all comes down to striking a healthy balance between spending and saving. If you can do this, you’ll be all set.

Pay Yourself, You Deserve It

First of all, I want to make a quick distinction between a Financial habit and a Financial goal. A Financial habit is something you do every day, and a Financial goal is a target you want to accomplish within a specified period of time.

Your goal can either be to pay yourself first, or your goal can be to save more money. You know the money is coming out first.

There are no ifs, ands, or buts!

But how can you make sure you pay yourself daily or weekly? You just have to make sure it happens on auto-pilot.

This is a very powerful habit because when you have a few dollars in your pocket every day, the added bills won’t seem so daunting.

And when you see yourself taking control of your finances on a daily basis, you will soon find yourself at peace with your financial future.

Give Yourself a Consistent Raise

If you want to discover how long it will take for you to become a millionaire, start saving money. My rich dad would always say, “It’s better to pretend to be a millionaire, even if you’re not one.” It was a lot easier to give himself a 10% raise every year, even if he was only working for a modest wage.

Buy Value

Not Price.

The key to being successful in any area of life is to do the right things. Many people make the mistake of thinking that doing the right things involves expensive things. However, many people invest in expensive toys or flashy clothes, but end up in financial ruin.

True success comes from being able to live within your means and acquiring the skills needed to make more money. If you make good decisions with the money you already have, you can easily acquire more capital.

More importantly, it takes discipline to do the right things, which is why I prefer to call it the Discipline of Financial Success. The primary goal of success is to be happy, and you can be happy by having financial freedom, which is the ability to live within your means while still enjoying the things you like to do.

If You Have to Borrow, You Can’t Afford It

This is a tough, but valuable piece of advice that my mother drilled into me a long time ago and that has helped me tremendously to get through a number of financial ups and downs without losing my shirt.

At no point in my life have I ever had a bill collector show up at my door, and I’ve paid off all my credit cards, my student loan and all my other debts much sooner than recommended.

However, the differences between how I operated and how many people around me operate were staggering.

Almost everyone I know uses their credit cards for all their ordinary spending and only pays them off at the end of the month, if ever.

Using credit cards allows you to make your purchases right now and pay for them later. By doing so, you can get things you can’t afford by only paying for them with cash, such as cars and vacations.

Most people do use them for their ordinary spending, but they end up in trouble when, for whatever reason, they stop being able to pay them off at the end of the month. They then start accumulating interest on top of their debt, so they end up owing much more than what they originally spent.

Pay Your Bills Ahead of Time

This is one of the key habits that can make a huge difference in your finances and overall personal wellbeing. You should automate as many of your bills as possible and pay them ahead of time.

By doing this, you not only build and maintain good credit ratings and score, you also have fewer bills to deal with each month.

Also, paying bills (especially on time) shows employers and would-be business partners that you are responsible. As an added bonus, if you have a credit card, you’ll earn some rewards.

Read One Financial Book Each Year

Reading financial books is a way to learn and change your financial habits. A successful investor like Warren Buffett reads at least 500 pages a day. Do you read that much? It’s important to develop a daily routine of reading and to also set a goal. I’d recommend setting a goal to read one financial book per year that you’ve never read before. This will help you expose yourself to new ideas and give you time to think about how you can incorporate the ideas into your money habits.

Possible Annual Reading Goal:

  • 5 books per year (10 per semester)
  • 1 book per month (2 per semester)
  • 1 book per week (4 per semester)

When choosing a book to read, consider what financial topics interest you the most. Perhaps it’s learning some specific money management habits. If you’re looking for financial books on building wealth, you’ll have plenty of options. But if you want to read some good personal finance books, there aren’t as many to choose from. Here are some suggested topics for discovering more about money:

  • debt repayment
  • investing 101
  • saving for retirement
  • spending habits
  • sticker shock

Track Your Spending

One of the most effective ways to improve your spending habits is to make a conscious effort to track your spending habits.

Simply logging your expenses on your phone at the end of every day will help you create awareness of your spending habits. You’ll also become aware of your expenses and will be able to react before you make impulse purchases. You might feel like making a purchase but will be able to stop and ask yourself “Do I really need this?” before you make the purchase.

If you aren’t able to track your spending, you’re likely to be spending without knowing where your money is going to. This will put you at risk of overspending and unknowingly depleting your bank balance to zero. Tracking your spending will prevent this from happening because you’ll have an accurate idea of how much money you have left.

Spend Less Time Watching TV

Channel Your Time Into Things That'll Benefit You:

The average American spends 5 hours a day watching TV, this is time that we could be spending exercising, working on a side hustle, or starting a business. In order to build wealth you need to spend less time on TV and more time on activities that will benefit you in the long run. I choose not to own a TV and I spend my free time learning about investing and building my businesses.

Balance Your Checkbook Regularly

When you buy something … groceries, gas, clothing, a gift, or anything else … you need to make sure that you have the money in your account.

Most people do this by some sort of banking account. They have a unique account number which allows them to authorize money to be taken out of their account and show up in somebody else’s account.

Most people have their bank account linked to a checking account. They receive a checkbook that they write checks with. These checks become their authorization for the bank to take money out of their account and put it in somebody else’s.

If you don’t keep track of the checks you write and the money that flows out of your account, you will soon have a negative balance, which is described as being overdrawn. You can quickly lose thousands of dollars due to this complicated banking environment.

This is why most banks and credit unions open checking accounts with the requirement that customers either:

keep a zero balance in the account or

Sign up for automatic payments to authorized financial institutions that are associated with your account.

If your goal is to keep a zero balance, it is vital that you review your account balance daily. If you do not have enough money to pay for a purchase, you should not make that purchase.

Shop Without Your Credit Cards

In today‘s world, many people have a hard time living without their credit cards – whether shopping on vacation or at home. It’s easy to get caught up in using a certain card or to “browse” and end up impulsively buying that isn’t really needed. So how do you avoid that?

Decide on a day when you’ll be going to the store and don’t take your credit cards with you. This helps because thinking that you’ll be going to the store unarmed or without access to your cards will keep you from impulsively buying items that aren’t on your list. So if you’re planning to get new towels for the bathroom or dishes for the kitchen, put it on the list and stick with it. While you’re at it, prepare a meal plan or grocery list, instead of stopping by a restaurant or fast food place.

Pay More Than the Minimum on Your Credit Cards

When it comes to paying off your credit cards, nothing is more common than making minimum payments. That’s because you can save a couple of dollars every month when you take this approach. However, saving a little each month means it will take a looong time to pay off your debt.

Instead, consider paying 30 percent of your balance each month. In the long-run, this strategy will save you money and put you in a better financial position. Why? Because by paying 30 percent each month, you’ll be eliminating your debt much faster. Also, because you’re no longer revolving debt, you’ll be paying less interest. And that puts you in a better position to get ahead financially.

Dust Off That Business Idea You’ve Been Putting Off

The greatest business ideas probably come from the most mundane moments. Consider these three famous entrepreneurs: Grant Achatz, who started out as a line cook before opening up his own restaurant, had the inspiration to create the world’s most complex restaurant ever made while preparing food for a special guest.

Sam Walton, founder of Wal-Mart, had the idea to start his first store as he drove through his home town of Bentonville, Arkansas.

And Larry Page and Sergey Brin came up with the idea for their search engine while sitting at a coffee shop, waiting for one of their classmates to show up for a meeting.

Think about it. These are the sort of moments you know and love. Micro-inspiration!

So if you have a great business idea, keep that pen and paper with you at all times, and write it down. (And you don’t even need those fancy Moleskine journals with the fancy fountain pens).

Learn to Say “No” to Yourself

It’s this simple word has the power to change your life. It’s the key to a healthier lifestyle. And it’s also your ticket to financial freedom.

My friend, say it’s you. You’re a person who likes

To own the latest and the greatest.

And the greatest. to have all the things you want to wear

To eat exactly what you love without considering the cost.

To eat exactly what you love without considering the cost. you rarely say no to yourself or to others.

On most days, you simply do whatever you want.

I know, the prospect of saying No to yourself and the people around you can be quite intimidating. But I promise you that once you get started, the word will come easier and will soon become second nature.

Here are 27 examples of how you can “No” more to yourself as you go through the day. Follow them, and I am pretty confident, you’ll be glad you did.

Learn to Say “No” to Your Kids

One of the most successful investors in the world, Warren Buffett, says that the most important investment you can make is in yourself. He claims that investing money in yourself pays the highest of all returns, which is a return on education.

The most successful people understand the importance of education and every day they are learning something new to advance their career.

One simple way to make yourself more valuable by investing in yourself is through learning a skill or feeling more comfortable with a subject that you’re already familiar with.

Here are some skills and subjects that you can learn to increase your value at work and make more money.

Buy Term and Invest the Difference

When you purchase a home, the biggest expense is the mortgage. This expense lasts for 30 years or so. That’s a long time, so it pays to invest your money wisely over that time period!

If you’re buying a home, consider the different ways you can invest the difference between paying for your home outright and buying a mortgage. You can invest in stocks and mutual funds, or even real estate, and still cover the costs of your home. By the time you pay off your mortgage, your savings will have grown substantially and you can use that money for other investments (or lifestyle with your new home!).

Another smart way to invest the difference is in a tax free ISA. That way all of your return is tax free which increases your investment gains and will make more money for you at the end of the term.

Start a Retirement Savings Plan

Even if you’ve never had a retirement savings plan, now is the time to start one. Most companies offer a workplace retirement plan like a 401(k) or 403(b). When you’re offered a retirement savings plan, you should enroll as soon as you can.

The easiest way to get started is to automatically transfer enough money to your 401(k) or 403(b) account every payday. You don’t have to worry about the money disappearing from your paycheck, and you’ll be less tempted to spend it.

If your company matches your 401(k) contributions, great!. The sooner you enroll, the sooner you can get extra money from the company. But no matter what kind of retirement savings plan you have – 401(k), 403(b), Roth IRA, traditional IRA – the sooner you contribute, the sooner you’ll start adding money to your retirement account.

Refresh Your Emergency Fund on a Regular Basis

The one thing that every single one of my clients wants is financial freedom. The problem is, at times you do not know how to get the most of your money and build financial freedom just outside the door.

The best financial habit that you can create for yourself is to build your emergency fund. Most of us have emergency situations come up.

Whether your car breaks down, your washing machine gives up or you lose your job, you will have to have some money available to bail on those devastating events.

Save For Specific Goals

Setting goals makes you aware of what you want to achieve in the future. It makes you appreciate the importance of saving.

Investing your money in the stock market without a goal is dangerous; you should never take a risk with hard-earned money. It is always good to set small goals and progress towards the bigger one. The money saved in the initial stages could be used later to make more and you can start saving again.

Saving money can become a part of your life if you save a small amount each month. This will give you a cushion in case of emergencies. Financial experts advise that a person should save a minimum of 10% of his income.

A good habit that a person should develop is, to review his expenses every month. I don’t think this could be taught to everyone; I had to learn this the hard way. When I started my first job, I would spend my salary on buying clothes, eating out and also invest in the stock market. It was in the third year of my job that I realized my saving had decreased drastically. I confronted myself on the issues of lack of expenses and saved 70% of my income.

Know What You’re Paying

Never buy something without paying attention to exactly how much you’re spending. If you see something you want, ask yourself, “how much is this?” before you pull out your wallet. If you need more information, ask someone or look online. Try to avoid handing over your hard-earned cash without knowing how much it’s going to cost you. If you’re paying with credit or debit, make sure you know the actual dollar amount you’re being charged.

Pay attention specifically to the following costs:

  • The lowest price you’ll need to pay for a product
  • Cash, check, credit, or debit card
  • Sales tax
  • Shipping and handling
  • Restocking fees
  • $$$$$$

These additional costs can easily end up being bigger than the sale price of an item. Make sure that you can afford to pay all of these associated costs before you buy, or find cheaper alternatives.

Give to Others

{1}. Dedicate time, energy, and resources to serve and help others. By doing so, we get to enjoy the feeling that comes from giving, and helping others feel valued.
{2}. Give generously, especially when it’s inconvenient to do so. It’s important to remember that every little bit and effort that we put into someone else is appreciated in a big way. Giving in this way makes them feel important—and you’ll likely experience the same happiness as well.
{3}. Give freely—don’t hold back. It’s easy to get caught up in the mindset that we have to hold on to what we have because the world is a harsh place. Yet, oftentimes, giving freely and even to those who have hurt us or whom we don’t like helps alleviate our stress and discomfort, and make us feel more fulfilled. Even a small act of giving such as buying a coffee for the person behind you in line at the coffee shop can have a big impact.

Become the Go To Guy/Girl at Work

You want to be able to comfortably hold any conversation that comes your way in the office. You want to be able to handle any question that could come up. You want to be able to speak intelligently on any subject.

What that requires is the need to continuously work on yourself at a deep level. You want to be able to speak confidently about your knowledge. You want to be able to back up every saying with examples and stories. You want to be able able to laugh at your own jokes and glow with confidence.

Here’s a general list then that will help you become that person. Feel free to add to this list what you know is crucial to be that person.

Get to Work 15 Minutes Early Each Day

This one habit alone can save you money every single month. The average American checks their email when they arrive at the office (according to a study by Outbox). And if you’re a big procrastinator like me, it’s very likely that you’re going to check your email when you get in the office.

Do yourself a favor and show up 15 minutes early. Then answer your emails during breaks. You’ll be more productive, and since you’ll be getting into work 15 minutes early, you’ll have time to even complete some projects before your coworkers show up.

Cut Down on Your Spending Allowance

Your financial allowance is the amount of money you allocate each week for personal spending. As a rule of thumb, allot yourself a bit less than you spend in this category so that you’re not spending a lot of money every week. Spend each week in your allowance and not a penny more. This is a good financial habit to have as it helps you to consistently spend less than what you earn as a way to cut down on your spending.

Identify ways to save up to 40% off on everyday purchases. Get a deal or two under your belt, and you’ll build up the confidence and momentum to find other ways to save. Here is one example of being able to save money. How to earn cash back at any store. You will never have to pay full price again.

Cut Down on Restaurant Meals

When I was growing up, the word “credit” was a dirty word in our household. Like a lot of people during the 1970s, my parents were big into credit card debt. By the time I was in high school, they were approaching bankruptcy. That forced them to pay off all of their debt just to stay afloat.

I think my dad was more depressed than I was after spending a full day at work, so I figured I would give him like a 30-minute break and take him out to the movies (only 1.5 hours). I knew he liked action flicks, so I brought him to see a James Bond movie, which was like 3 hours long. I felt so bad that we were out so long, so I tried to give him snacks at the theater and the concessions stand for dinner. It was a disaster.

On our way back home, we stopped at the grocery store for milk and food for dinner. Unfortunately, the milk was gone, the bank account was drained and we had to ride the bus home. I was too ashamed to walk home, so we took the bus the whole way.

That was a lot of trouble for one night at the theater. It was an extremely embarrassing night and I really learned how to avoid restaurant meals from then on.

Drive Your Car a Few Years Longer

Keeping your car longer can save you big bucks. Periodically check your owner’s manual for the suggested useful life of your car, and aim for keeping your vehicle longer than the car’s appointed lifespan.

So, what are the big cost savings in doing so? First and foremost, is the obvious fuel savings. Driving your car longer means you’ll use less gas. All things being equal, this results in a lower gas bill. When you up your driving mileage, you get more gas mileage out of your car, which translates to less money spent at the pump. Even if your car is older, it’s still using gas. Shifting from newer to older models can help you save big money.

Also, you’re replacing less often. If you drive your car every day, the wear and tear on the tires and the windshield wipers, and the maintenance on various parts of the car, along with the insurance, could all add up to a significant amount of money. If you keep your car longer, you’ll have to replace some of these consumables less frequently.

Learn to Love the House You Live In

The house is the biggest purchase most people will make in their lifetime, so it’s important to love it. What you pay for your house depends on location, size, and other factors. It’s very important to not look at the price tag alone. You also need to look at your dream home using your mind’s eye. One of the great habits that you need to develop for financial success is to learn to love the house you live in.

The purchase of a property is an investment, and it’s true that the value of the home may increase over time. But, even if you don’t make any money from the sale of the property, you can still love it by enjoying the space around you.

If you learn to love the house you live in, you’ll be happier, more content, and less likely to want to sell your house just for the sake of selling it. The key is to realize that even if you have a large mortgage, it’s okay because it’s still an asset and part of a bigger plan to acquire wealth. You should focus on what you have rather than what you don’t have. This is a good habit to get into for your financial success.