14 smart money habits
If you want to change your life, you have to change your habits. In my book,Effortless WealthI highlight which habits have the most impact on your financial life and in my bookChange your habits Change your lifeI explain how to change habits quickly, painlessly and permanently.
Below, I share some of the top smart money habits from my book, Effort-Less Wealth, that will improve your finances. I will also include in my book, Change Your Habits, Change Your Life, some of the habit-changing strategies that will help you form those habits more easily.
#1 I will invest in myself by pursuing a dream or something that I am passionate about, on the side, that may one day reward me financially.
We are given this great ability to dream. It’s in our DNA. Yet somewhere along the way, we put our dreams aside. It’s never too late to dream. Grandma Moses started painting at age 80. Colonel Sanders was in his early 60s when KFC was born. Ray Kroc was 55 when he founded McDonalds.
The ability to pursue your dreams never dies. You are never too old to pursue a dream. Take 30 minutes from your life today and write down your ideal life. In 1,000 words or less, paint a picture, in words, of the ideal and perfect life you desire. This exercise will rejuvenate you, inspire you, and motivate you to grow and improve.
Don’t let life pass you by without pursuing your dreams. We are infinitely bigger than we ever imagined.
#2 I will do one thing every day that will help me move forward in achieving my goals in life and achieving my dreams.
A dream is a desired future outcome. It is a destination. A goal represents a future action that you intend to take. Goals are your transportation system and dreams are your destination. Since goals require action, you have control over whether or not to take that action and achieve your goals.
Do one thing every day that will help you move forward in achieving your dreams.
#3 I commit to reading 30 minutes every day to learn more about my job, my industry, or a dream I’m pursuing.
Perhaps the most important Rich Habit self-improvement I discovered in my five-year study of the daily habits of rich and poor was in reading. Wealthy, successful people are voracious readers. They devote a lot of time to reading every day to improve and grow.
#4 I will seek to build a new relationship with a successful person.
Wealthy and successful people are very demanding of who they associate with. Their goal is to develop relationships with other people who want to succeed. When they come across someone who fits the bill, they then devote an enormous amount of their time and energy to building a strong relationship. They develop the relationship of a sapling to a redwood.
Relationships are the currency of the rich.
#5 I will spend 20 minutes a day developing a new skill.
Wealthy, successful people all have one thing in common: continuous, daily self-improvement. Each individual has a circle. Within this circle are the things you are comfortable doing. Those things inside your circle represent your comfort zone. Most do everything humanly possible to stay in their comfort zone. When you do things that are out of your comfort zone and out of that circle, it causes discomfort. But each time you engage in a new activity that causes discomfort, you widen your circle; you grow as an individual.
You have to engage in activities that cause discomfort and that means you have to feel the pain of growing up. Expanding your circle of comfort by engaging in new activities that cause discomfort is necessary if you want to grow. You cannot succeed in life by staying in your comfort zone. You need to expand your circle of comfort in order to become the person you need to be to successfully visit you.
Those who are unsuccessful in life avoid doing things that cause them discomfort and pain. As a result, they never become the individuals they need to become to successfully visit them.
Start expanding your circle today. Never fear the pain of growing up. It is this very pain that makes you stronger and helps you become the person you need to be for success to visit you.
#6 I will commit to aerobic exercise for 20 minutes every day because I know that aerobic exercise increases brain performance and will help me in my career.
Exercise has many health benefits. Aerobic exercise, in particular, increases the volume of oxygen and glucose delivered to the brain, helping to nourish brain cells. It also helps maintain weight, improves muscle performance and improves digestion.
But, perhaps even more importantly, aerobic exercise has a profound effect on your state of mind. Studies have shown that daily aerobic exercise promotes a positive mental attitude. It increases positivity, optimism, confidence, cheerfulness and has a calming effect on the amygdala.
#7 I will adopt a frugal mindset.
Being thrifty requires three things:
- Awareness – Being aware of how you spend your money
- Quality – Spending your money on quality products and services and
- Advantageous Shopping – Spend as little as possible, shopping for the lowest price.
By itself, being frugal will not make you rich. This is just one piece of the financial success puzzle, and there are many. But being frugal will increase the amount of money you can save. The more savings you have, the more options you have to earn money. Having money set aside in savings allows you to take advantage of opportunities.
Without savings, opportunities pass you by.
#8 I’m going to start a fact binder where I write down anything new I learn about my job or industry during the year.
Wealthy and successful people read an average of 30 minutes a day. Their reading subjects? Related to career, self-help, education, biographies, history, current events, and anything related to a major goal or extracurricular activity.
Although reading is important, retaining the important information discovered in your reading is essential to learning new facts and information.
One strategy for doing this is the Fact Binder. In your fact binder, create various themed sections that interest you. Every day, after reading, add new facts or information to your fact binder. You can even add a section called: “New words” where you add any new words you come across while reading. Writing down what you read is a way to reinforce what you just read. Abraham Lincoln wrote things down 3 times in order to memorize them.
The physical act of writing engages the cerebellum, which helps double your ability to remember facts. Once a week, review the new information you’ve added. This will help reinforce learning.
#9 I will limit recreational screen time to less than an hour a day.
Time wasters come in many forms: TV, Facebook, Twitter, Pinterest, Snapchat, Instagram, watching YouTube videos, internet trolling, streaming Netflix, video games, etc. Excessive screen time prevents you from pursuing your dreams, your goals, reading to learn. , exercise, work, and other productive or creative activities that move you forward in life.
Limit your wasted time, especially recreational screen time.
#10 I will call everyone important to me on their birthday. I won’t use them on Facebook, tweet or text them. I will call them on the phone.
Happy birthday calls are a strategy the wealthy use to build their most important relationships. Making happy birthday calls keeps your relationships on life support. At least once a year, you will need to talk to your connections. 25% of the time, the recipient of a happy birthday call will return the favor, deleting that relationship.
Making a phone call personalizes the birthday and separates you from the rest of the crowd.
#11 I will pay $100 more per month for my mortgage.
Small things sometimes pay big dividends. Getting into the habit of paying $100 more for your mortgage drastically reduces the amount of interest you pay on that mortgage and shortens the term of your mortgage.
#12 I will have $100 per month automatically deducted from my paycheck or bank account and I will systematically/conservatively invest those savings.
Saving is a habit that most people don’t learn at an early age. It is only when we get older and wiser that we understand the importance of saving. Don’t wait until you’re old to get into the habit of saving. Start today. If you can’t afford $100 a month, make it $50 a month or $20 a month. The important thing is to form the habit of saving now.
#13 I’m going to do the 100 day challenge in which I charge nothing on my credit cards for 100 days. For 100 consecutive days, I will pay for everything in cash or with my bank card.
Using credit cards to pay daily expenses is a bad habit. Credit card usage can easily spiral out of control. If you have to use credit cards to pay for your living expenses, it means you are living beyond your means.
Take control of your life by taking control of your finances. For 100 days, try not to use credit cards and use cash or your ATM card instead. After 100 days, a habit will begin to form. The one that sets you up for success for the rest of your life.
#14 I will dedicate 30 consecutive days to tracking every penny spent.
Do you know where your money is going? Some do. They are called Saver-Investor, self-made millionaires. If you want to follow in the footsteps of the self-made Saver-Investor millionaires, one of the steps they take is to pay attention to what they spend their money on. Knowing the spend helps you uncover erroneous or excessive vendor charges. It also forces you to think about where your money is going.
Spend just 30 days tracking everything you spend. At the end of the 30 days, review where your money went. You will be surprised at what you might find.
Tom Corley is an accountant, financial planner, lecturer and author of the books “Wealthy Habits: Daily Success Habits of Wealthy People” and “RichKids: How to raise our children to be happy and successful in life“. Corley’s work has appeared on CNN, USA Today, The Huffington Post, SUCCESS Magazine, and numerous other outlets and podcasts in the United States and 27 other countries. Tom is a frequent contributor to Business Insider and CNBC.