12 Tiny Habits That Can Lead to Incredible Wealth
So it follows that if we don’t have the life, health or wealth we desire, it isn’t because we’re unlucky; instead, it’s likely because our habits have lead to our current condition.
Image Credit: Pixabay (modified to add quote)
I know this for a fact because I felt very unlucky early in life. It wasn’t until I hit a low point and started to consciously alter my behavior that I began to feel lucky…fortunate…even wealthy.
I’m sure you’ve read about people who have dug themselves out of generational poverty or horrific living conditions and now lead rewarding and rich lives. A common theme is that they did things differently from the people around them. They built better habits.
There’s an interesting post about habits on Dan Pink‘s blog where he interviewed Charles Duhigg about his book The Power of Habit: Why We Do What We Do in Life and Business. This book just went on my must-read list (there are over 2,000 reviews giving it a five-star rating). Here’s a thought-provoking tidbit from that interview:
If I’ve managed to convince you that your habits may be holding you back from achieving wealth, or anything in your life, then read on. Here are my tips for building 12 tiny habits that can lead to incredible wealth!
#1: Believe You are Worthy of a Rich Life
One of the biggest hurdles to overcome is the belief that we are not worthy to have wealth or are not capable of achieving it. Our behaviors, if examined closely, reveal habits that support that belief.
Here are some things you can do to build habits that support the belief that you are worthy:
- Read self-help books instead of (or in addition to) fiction.
- Find and befriend people (mentors) who have the habits you want to develop. Try Meetups, clubs, online forums, etc.
- Put visual cues in your home and workspace that support the language you are trying to imprint on your mind.
These are just a few techniques you can try. What others have you tried or heard of? Please leave them in the comments!
#2: Pay Yourself First
One of my favorite books is The Richest Man in Babylon by George S. Clason. In fact, it’s one of the first money-related books I read and it helped to get me on the right path. One of the habits Clason reveals is to pay yourself first. He suggests paying yourself 10% of everything you earn.
While that is a nobel goal, the thing I found so important when I started the practice is to just start. Any regular amount or percentage will do. It’s the habit of paying yourself first that is key. As time goes by, you’ll find it’s easy to increase the amount.
#3: Pay Cash (or it’s equivalent)
When we use credit cards to pay for products and services, it doesn’t really feel like money. However, when you pull crispy green bills from your wallet, it’s a lot harder to let them go!
When I first began my journey out of bad money habits, I made myself use an envelope system and pay cash for everything. It was a good strategy because I wasn’t to be trusted with plastic.
Now, years later, I use a combination of cash and credit cards; however, I pay the cards off in full each month, which is the equivalent of using cash. If you aren’t habitual about paying the cards in full every month…use the cash-only system.
#4: Change one Service Provider Every Year
This is a habit I need to work on. Every time I research a new service provider, I realize I’m getting soaked and can do better. It takes a lot of research to get an apples-to-apples comparison on some things, like auto and home insurance, so it’s easy to put off (a bad habit).
I really need to change my cell phone service. I currently have Verizon and use an iPhone 5; I’m getting financially cremated every month because I’m afraid to change.
I’m very interested in Republic Wireless. I love their company vision and the service plans look amazing.
Reviews I’ve read on many blogs, including the ever popular Mr. Money Mustache, rave about the price and service. When MMM puts this company the same category as Vanguard, I think it bears consideration!
So here’s what I’m going to do: test the product. I’ll keep my current phone and plan through Verizon and:
- Buy a MotoX for $299 with a new number.
- Test Republic’s service.
- Make a decision by the end of 2014 about whether to dump Verizon.
I’ll keep you posted along the way. Are you a current Republic Wireless or other low-cost carrier user? What advice can you offer those of us who are heavy phone, text and data users? Please leave a comment!
UPDATE #1: It looks like I’ll be moving forward with my test. I asked if I could buy the phone with a new number and then transfer my current number later should I decide to cancel my Verizon plan after the test. I received this reply back from Republic:
#5: Ask for a Discount
My Mr. and I hadn’t been out to a movie for the last five years (he hates going to theaters). But recently he caved to make me happy and off to the movies we went. I asked about the senior discount. To my disappointment, they raised the age to 62…we’d have to wait another seven years to qualify!
But the nice clerk took pity on us and gave us the discount anyway. Awesome! Never be timid to ask for a price “hair cut.” Here are some examples of when I’ve asked for a discount:
- When shopping at a thrift store. Don’t assume the price is “the price,” be willing to ask for a little off.
- If you are a senior, don’t pass up the senior discount. I’m so surprised at people who don’t want to admit their age so they skip claiming this prize. Heck, I’m thrilled to have lived long enough to finally get it (thanks IHop and CoCo’s!) and I plan to live a long time to reap the rewards!
- When shopping for a car.
- When buying a house.
- When buying something at a retail store that is slightly damaged (our refrigerator was a floor model with a scratch) or the packaging is damaged.
#6: Buy Used
Buying new is a habit based on the belief that new is better. While it may be for some things, it’s not true for everything. “NEW” IS A ROBBER IN DISGUISE. It steals wealth and never looks back.
I’m a big believer in buying used cars. Even for single women. With a little help from a knowledgeable friend or a good mechanic, you can get a rock’n good car for a deal. Some of my family use Craigslist to find vehicles and it’s worked out well for them.
As for clothes, I know a lot of people shop thrift stores or consignment. I haven’t done that yet but I do know of an interesting company that I’m going to try: ThreadUp. Here’s a link that tells the story Like-new clothes from brands you love! Up to 90% off retail.
What do you buy used and what company recommendations can you share? Please leave a comment with your suggestions!
#7: Make Yourself Wait
This is by far, one of my favorite habits that has helped me grow wealth. By simply making myself wait for a month or more, I can either talk myself out of the purchase, find a better product or perhaps get that very item at a better price.
While you’re waiting, keep an eye on what is happening with the price over time. This family of sites offer price-watch tools that show price history and alert you if the price is dropping!
#8: Save Monthly for Large Purchases
If you want to reduce stress related to money, this is a habit you should develop. I call this saving for “future capital expenses” and I’ve written several blog posts addressing how I do this.
It changed my life when I started saving monthly for purchases and expenses that I knew were coming down the road. Here are some links that may be helpful if you decide to work on building this excellent habit.
- Spender Vs Saver — Which One Are You?
- Does Your Spending Support Your Values?
- Reduce Financial Emergencies With One Simple Strategy
- Setting 10-year Plan Goals
- 4 Ways I Use Quicken to Stay On Top Of My Money
Don’t laugh…this is a big deal! In this report from CMS.gov, we see that dental care costs Americans in the billions of dollars. Worse yet are the out-of-pocket costs. And don’t think things will become less expensive any time soon.
One thing you can do to help avoid dental bills is to become a regular flosser. This was a big challenge for me. My teeth are close together and the floss would break, or worse yet, get stuck.
Two things helped me get in the habit of flossing:
- Introduction to better floss like Glide or my current favorite Listerine Healthy White Floss, and
- Having someone tell me FLOSS BEFORE YOU BRUSH!
It turns out that when you are trying to introduce a new habit into your life, if you insert it in front of something you wouldn’t consider skipping (like brushing your teeth), then it’s more likely that you’ll adopt the new behavior. It works for me!
I know beyond a shadow of a doubt that habitual flossing has saved me hundreds, if not thousands, of dollars over the last 20 years.
#10: Track Your Net Worth
This habit is one of the most important to develop if you are interested in living a debt-free, stress-free life. It doesn’t have to be complicated and you can evolve your method over time as you like.
What this habit does for you is to give you a window into your REAL financial situation and helps to keep you honest with yourself. It’s simply the process of adding up your debts, adding up your assets and then subtracting your debts from your assets. Of course the goal is to have your assets outstrip your debts but even if that isn’t true now, it gives you a benchmark from which to measure progress.
If you’re ready to build this habit, here are a couple of my posts that will help to get you jump started:
- The Holy Grail of Personal Finance Numbers: Your Net Worth
- My Crazy Method of Determining Property Value for Net Worth Calculations
#11: Openly Talk About Money
As a culture we are reluctant to talk about money. I think it’s not unlike our fear of talking about death with the dying. There are fears about not fitting in, having less than someone else, looking dumb, being taken advantage of…the list goes on. So we keep our traps shut.
But the truth is that things change for the better when you screw up the courage to talk about money. And, over time it becomes easier. Transparency in a relationship is of utmost importance. A couple will never achieve wealth if they don’t talk about money.
Here are two older posts I wrote that may be useful to you:
- Are You Waiting for Your Partner to Change?
- Why a Marriage Manifesto is Better than a Prenuptial Agreement
#12: Be Grateful
Probably the most important of all is the habit of being grateful. When you consciously, and regularly appreciate what you have in your life, it helps temper the desire to have more “stuff.” You focus on treasuring and caring for the people and things you already have.
Being grateful builds wealth of all sorts, not just financial. I’m grateful for our small but comfortable home, my amazing Mr., a wonderful family AND for the nice things I have and enjoy. At this stage of my life, I really don’t NEED much more.
How has being grateful enriched your life and what do you do to keep in a grateful mindset?
I realize that people who are raised with generational poverty have profoundly different challenges from those of us who grew up in stable, loving families. While the habits we discuss here can certainly improve anyone’s life, it can be a much bigger challenge for some.
Consider this Warren Buffett quote—perhaps we all should work on evaluating and changing habits that steal our wealth, health and happiness before we need a chainsaw to get the job done!
Image Credit: Pixabay (modified to add quote)
Places to Visit on Escaping Dodge:
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