You’ve probably already heard the saying, “Rome wasn’t built in a day.” It means that great things result from hard work, consistency, and commitment over a long period. The same goes for wealth–if you want a fortune that lasts, you need to build it every day. You can do this by beginning these seven wealth-building habits.
You achieve your goals by practicing good habits and following them religiously. For example, a body you’re proud of is something you build through diet and exercise.
Wealth-building habits are “diet and exercise” but for your net worth. Following them will help you grow your fortune and live the comfortable life you want. These are the seven wealth-building habits that I used to build (and continue building) my wealth:
Of the seven wealth-building habits in this article, this is the first one you should have. Setting a financial goal will help you plan out all the steps you need to achieve. Let’s take buying a house, for example. Let’s say you want to save up for a down payment of $9,000 in 10 years. You need to save just $75 a month for 10 years to get to that amount!
Additionally, a financial goal is something that keeps you moving forward. Having one will help give you the motivation necessary to keep hustling. You’ll be a lot more motivated to earn and save money if you have something to work towards.
Setting the financial goal is just the first step. You also want to build the habit of tracking and updating your progress. By tracking your progress towards your financial goals, you’ll always know what you need to do to reach them.
Your financial goals can be many things, ranging from short, medium, to long-term. Check out my article on budgeting goals to find out more.
Now that you have a goal, setting up a budget is next. A budget will inform you of where your money is going every month. Ideally, you want to budget every single bit of income you earn–down to the last cent.
The act of setting a budget isn’t one of the seven wealth-building habits to live by, though. Sticking to your budget is the habit you want to build. Building a fortune is challenging if you’re dipping into your savings every other week.
Now that you have a budget, the next of the seven wealth-building habits is to save a bit of money. Even with inflation being the highest since the 1940s, setting aside some savings is essential. Emergency savings will keep you afloat in case you lose your source of income.
A good rule of thumb is to have about twelve months’ worth of expenses saved up in your bank account. For reference, the average American spends about $5,000 per month. This means $60,000 for most people living alone should be fine. If you have a family, though? That’s a different story.
You mustn’t touch this fund outside of anything you consider an emergency. “Emergency” can mean a lot of things, though. However, I like to think of it as anything unexpected that damages your ability to make money. For example, an injury prevents you from working or if your car breaks down.
I have a whole article on what happens when you don’t save–you should check it out!
That being said, you don’t want to save too much money. Too much money in the bank means you’re not making your money work for you. This brings me to my next habit…
Once you have some savings, it’s time to start investing! Investing is how you make your money work for you. Following the seven wealth-building habits in this article will almost guarantee your wealth grows over time.
You have to invest consistently, though. Setting aside a portion of your monthly income for investments will ensure your wealth grows. Ideally, this should be about 20-30% of your income.
Investing in volatile assets like stocks and cryptocurrency is risky, but it isn’t gambling. Check out my article to learn the difference between investing your money and gambling.
You’ll still have to spend some of your money when you’re building wealth. Things like clothes, shoes, technology (e.g., phones and computers), and appliances will eventually have to be replaced.
When it’s time to replace them, make sure you’re spending money on things that will last you a while. This means focusing on the quality of an item before making a purchase.
Side-tip: secondhand shopping is a great way to buy quality items at a lower price. Phones, cars, and jackets are some items you should consider buying secondhand. You’d be buying the same brand but at a fraction of its original cost!
To someone just starting to build wealth, debt is your biggest enemy. As someone who was in six-figure debt herself, avoid unnecessary debt at all costs.
Sometimes, debts can’t be avoided, though. If inheriting a debt or you have to take a loan for a car, it can’t be helped. Instead, focus on paying back that debt as soon as possible–without sacrificing the necessities.
Finding new ways to build wealth is a habit, too. You’ll find more ways to create and maintain your future fortune by continuously learning and researching. Don’t believe me? Ask the people who started learning about Bitcoin during its infancy and invested early.
Researching financial tips on your own can be a drag, but there’s a way to make it easy. Sign up for the money squad, and you’ll have new money tips and insider information sent to you every week! The best part? It’s completely free and takes just seconds to sign up–so join the money squad today!
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Dollars Makes Cents by Shaquana, Financial Coach and Wealth Expert, resources helps professional millennial women of color with the tools and skills they need to eliminate their debt, amplify their savings, and build generational wealth — without having to compromise their lifestyle.
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