6. Avoid using credit cards
This is a trap that way too many people fall into. When you have a credit card, you feel encouraged to use it at will and splurge, buying the things you want. That’s especially true if you just know you don’t really have the means to afford it right now.
5. Buy in bulk and on sale
Shop for deals. It’s not the advice you’d probably expect from millionaires, but it works. Everyone understands that searching for sales, comparing for the best prices, and buying certain things in bulk, are the best way to go in order to save money.
4. Live below your means
The biggest thing that keeps people from being rich, is that they spend more than they earn. The only logical way to increase your budget is to live below your means for a while. Far too many people like to buy nice houses in nice neighborhoods to impress others.
That becomes a major problem. They want their friends and family to be impressed, but they should be focused on themselves. Grant Cardone still drove his same Toyota Camry after becoming a millioniare and didn’t spend on luxuries. He said, “Be known for your work ethic – not the trinkets that you buy.”
3. Earn passive income
What a lot of people struggle with is that they work long, hard hours for every dollar. Basically, their time literally equals money. Millionaires figure out ways to get their money to work for them because time is more valuable than money.
Mark Cuban said, “Can you save a million dollars? You can, but you have to be really disciplined. You also have to be a little bit of a risktaker. Part of the risk is maybe putting money into a low-cost mutual fund.”
2. Money isn’t everything
For many, this might be the most important rule on the list. Understand, money is absolutely a major part of our lives and it drives a lot of what we do. It defines what we eat, where we live, and what we possess, but it honestly isn’t everything.
What money does is improve the quality of life. You don’t need money to have a loving family or happy relationship, but it certainly makes things easier. The support and love from your friends and family are much more important. Don’t make money the focus of everything.
1. The 50/30/20 Rule
We end on a rule to use to help manage your budget. It divides your income into three categories, to make sure things get spent properly and there’s no real waste. It starts with living essentials, which should take up 50% of your income. These include rent, transportation, groceries, bills, and things like that.
Up next, is personal spending. This is the 30% that goes on entertainment, hobbies, shopping, and those things that make us very happy. The final 20% of your income is spent on savings. It should go straight to the bank and not be touched, allowing you to save up for the future.