Key financial habits of self-made millionaires
Self-made millionaires have unique financial habits that get them ahead, adopting them well before hitting that seven-figure milestone. Here are a handful you can start applying to your life today, regardless of what’s in your bank account now.
Millionaires make lists
According to the Motley Fool, 85 per cent of millionaires are list-makers. Before hitting the grocery store (or any store, for that matter), they make lists, allowing them to avoid unnecessary spending. I love list-making, a key benefit being a more strategic shop, which helps you save. Another bonus: lists are amazing for sticking to a healthy meal plan.
Your practical takeaway; be a list maker for all your shopping.
They love wheeling and dealing … especially in the second-hand market
Millionaires are good at asking for a better price. Knowing the competitive market price for what they are buying is key, as is understanding the seller’s motivations. If they’re buying a used vehicle (buying second-hand is a significant money-saving move), they use research to back up their offer and might even ask for further discounts depending on how quickly the seller wants to close the deal.
If the word “negotiation” elevates your blood pressure, here’s a key question you can ask any seller to kick off a healthy discussion about the price: “How did you arrive at this price?” Before you know it, the two of you will be talking about your ideal price.
Your practical takeaways; ask for a better deal and consider buying second-hand.
They keep tabs on their finances
If a higher-than-expected charge goes through their credit card or bank account, millionaires notice, and take action. They’re looking at their money several times a week to see if their systems and automations for bill payments and savings are working well.
Most self-made millionaires approach their money through a financial-wellness lens. They are like “good shepherds” minding and caring for their resources.
Your practical takeaway; keep track of your money so that you can reduce unnecessary costs and ensure your savings stay on track.
Millionaires take advantage of rewards
They can’t help their frugal selves — free rewards are exciting. Millionaires choose banking, credit card and retailer rewards that offer the greatest value for their needs. For some, the rewards are focused on groceries, and for others it’s travel. Certain banks offer rewards that convert directly into cash back, savings or even retirement savings. Some credit cards charge fees for these rewards. Millionaires are doing the math on what will give the greatest return for the cost. They’re also using their rewards regularly and not hoarding them (rewards programs change from time to time, which may alter the value of the points).
Your practical takeaway; collect rewards that matter most to you — and use them.
Fun and wellness are included in their budget
It is good to spend money on what fills your cup and makes you well. Millionaires work fun and wellness spending into their household budgets. They balance this investment in their wellness with consistent savings for retirement, which offers peace of mind knowing they can enjoy today and will eventually enjoy retirement, too.
Your practical takeaways; set aside up to 10 per cent of your takeaway household income for fun and wellness, and enjoy it! And balance this with consistent retirement savings.
Adopting these millionaire habits today will help you become a better money manager, and realize savings almost right away.
This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.
