The struggle for financial independence is real.
It is everyone’s desire to have more money than they can spend, and not live paycheck to paycheck. We all desire it, but few attain it. Those who never go broke are on their way to attaining financial independence, or they already have.
Here are some things we can all learn from the money habits of people who never go broke.
1) Live below your means
It is not a crime to desire the finer things of life, but it is self sabotage for you to try to live above your means or maintain a lifestyle that is unsustainable with your income. People who never go broke do not spend money anyhow, they spend primarily on what is important.
One thing that makes people try to live a lifestyle they can’t sustain, is because they have their eyes on others. i.e they compare themselves with others or try to live like others.
Example, for some, a car is an essential need, and for others it is not. If you try to own a car when it is not an essential need for you, just because others around you have cars, you may get in financial trouble.
2) Set financial goals
Like with almost any aspect of life, without a plan, failure is inevitable.
If you have a goal to own a house in the year 2021, and you have done the market survey to research on how much it will cost to have the kind of house you desire, then you would dedicate resources to achieve that and it will guide your saving and spending.
Many times I have discovered that when I have no budget plan for whatever money that comes into my hand, at the end of the day, I am left with nothing and no idea of where the money really went.
When you get a paycheck, and you have no budget, you may feel like you have so much money, but in time, it will be all gone. If you crave financial independent, you have to learn how to budget and stick with it.
4) Differentiate between want vs needs
There are many things you may want but do not actually need. You may want to have your own space but do not need to just yet, if your parents can still accommodate you.
People who never go broke are not consumed by the spirit of consumerism (obsession with buying material goods or items). They scrutinize their every expense.
5) Don’t spend what you don’t have
There are people who always spend money they are yet to earn. Having a credit card can be detrimental if you are not a disciplined spender.
6) Save, save, save
Save as much as your lifestyle permits. People who never go broke are disciplined about their savings. One of the rules of saving is to save at least 6 months of your current living expenses. It will require you making you making a few lifestyle changes, and it may not be easy, but this is one case where the end indeed justifies the means.
Understand that having more money does not necessarily equate to more savings. So don’t wait until you start earning more.
For instance, instead of eating out, you can pack your lunch and eat out only on special occasions. Of course, there are people who need to save time, as time is their currency, so eating out is a way to save time for them.
The whole point is to put saving above your spending. Set out an amount you want to save weekly, bi-weekly, monthly as the case may be, and spend from whatever is left. Don’t plan to save after your expenses. Always do it the other way round.
Recommended:How to save on household expenses
7) Have multiple sources of income
The world’s richest people are able to maintain their lifestyle by diversifying their income streams. Aside their main jobs, people who never go broke have a few side hustles no matter how small.
A few cents, may not look like much, but in reality it goes a long way. Since I started earning from blogging, I have been saved many times by the money I get from it.
8) Go for quality
It may seem like you are saving money when you buy something that is less durable as opposed to something of good quality, but you are really not.
Because in no time, that product you bought of low quality may go bad and you will have to spend more replacing it, than the initial amount you would have spent buying a good product.
9) Pay off debt above the minimum
If you are servicing a debt, and you have a fixed amount you put down every month, one way to become financially independent is pay above the minimum anytime you have more.
This way you are able to pay off your debt quicker, and begin the process of saving. Paying just the minimum amount might mean you paying off the interest for a longer time.
10) See money as a good thing
People who never go broke, see money as a good thing. Money is not the root of all evil, it is the love of money that is. You attract what you believe in. So if you see money as a welcome tool in your development, it will come to you.
Don’t always feel like you have the worst luck.It is said that a repeated thought becomes a belief, and a belief becomes truth, and this truth will manifest conditions to support its truthfulness. Click To Tweet
Just saving money alone, may not get you the the level of financial independence that you desire. Money saved in the bank for instance, yields little to no interest. You have to let the money work for you. people who never go broke, invest a part of their saving on profitable ventures.
Money is only a tool. It will take you to wherever you wish, but it will not replace you as the driver. – Ayn Rand.