5 Money Habits to Boost Your Financial Wealth

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Do you think you need more money to improve your financial wealth? More money usually helps, but what’s even more important is how you manage your money.

Having a solid financial plan in place can help to live a financially comfortable life instead of one plagued by money-related stress.

If you want to improve your financial wealth, you need to take actionable steps to get there. The habits in this article will help to get you moving in the right direction.

1. Improve Your Money Mindset

All the money in the world won’t help you if you don’t know how to handle it. Doing well with money is very much influenced by how you behave, and behavior is not always easy to teach.

Your behavior and views on money are developed from your personal experiences over many years. Things like how your parents handled money, your views of the world, your pride, and your education can all have an impact.

Many people save money in this order when they get their paycheck: pay bills, buy groceries and essentials, buy discretionary items, and then save the rest.

To build a lasting habit that will help to boost your financial wealth, you need to save money first, pay your bills, and then spend the rest. You don’t have to go all-in right away. If you aren’t really saving any money right now, start with a small amount and build from there. My money saving challenge would be a great way for you to start small.

If you would like to learn more about shifting your mindset and behavior with regards to money, I highly recommend reading The Psychology of Money by Morgan Housel.

2. Set Financial Goals

One of the most important money habits that you may be overlooking is setting financial goals. Intentionally planning your goals will help to make saving money feel more intentional and purposeful. What do you want your life to look like 5, 10, and 15 years from now and so on? Make a list of short-term and long-term financial goals that you would like to achieve. Short-term goals could include things like reducing credit card debt, buying a new car, planning a vacation, or buying a new computer. Long-term goals, like saving for retirement or your child’s education, could take years to achieve.

Identifying goals will help you identify your priorities and things that are important to you. If you set intentional and achievable goals, it will inspire you to stay on track with a plan to improve your financial wealth.

3. Spend Less Than You Make

There’s nothing wrong with treating yourself from time to time, but you should definitely be spending less money than you make. If not, you’ll never be able to save up any money and improve your financial wealth.

Often times, as soon as someone gets a raise, they will start spending more money. Instead of doing this, challenge yourself to save the money instead of increasing your spending. That way, you won’t even really miss it, especially if you set-up an automated transfer to move the money to a savings account right after you get a paycheck.

To make sure you are spending less money than you make, I highly recommend creating and following a budget. It will definitely help you to get a better handle on your income and expenses by helping you to see how much you’re really spending. You’ll be able to work on reducing expenses and increasing your savings.

Making a budget is actually not that hard, and pretty much anyone can do it. When done right, making a budget is a great way to take control of your finances and help you to reach financial goals. Check out my 7 Steps to Create a Personal Budget blog post, which outlines the following steps:

Step 1: Collect Your Financial Paperwork
Step 2: Determine Your Monthly Income
Step 3: Calculate Your Monthly Expenses
Step 4: Set Your Financial Goals
Step 5: Make Your Budget Plan
Step 6: Adjust Your Spending Habits
Step 7: Review Your Budget

There are also many online budgeting applications. One of the most customizable digital budgeting tools available is PocketSmith. They have an app that can help you with planning and tracking your budget. Use my link if you’d like to save 50% off your first two months of their premium plan.

If you prefer a tried-and-true, non-digital method of tracking your budget, here’s a best-selling budget planner that comes in so many different colors to choose from: Clever Fox Budget Planner

4. Create Multiple Streams of Income

The most obvious way to improve your wealth, of course, is to make more money. Once you know how to handle more money, it can quickly help you to boost your financial wealth.

If you aren’t going to be eligible for a raise at work anytime soon, you could consider looking elsewhere. You could look for another higher-paying job, or look for ways to supplement your income. Consider temporarily adding a second job or “side hustle”. You could drive for Uber or Lyft, deliver groceries with Instacart, or resell some of your stuff.

There are also lots of ways to make extra money online. Check out my 5 Websites to Make Money With Print on Demand blog post. Also, in my 7 Ways to Make Money Online Fast post, I outline these ideas for making extra money:

Become a Freelancer
Start an Etsy Shop
Take Surveys or Participate in Research for Money
Sell Your Photographs
Sell Your Stuff on an Online Marketplace
Create How-to Videos
Start Drop Shipping

5. Save for Retirement

Retirement might seem like a lifetime away if you’re still in your 20s or 30s, but the sooner you start saving for retirement, the better, thanks to compounding interest over time. Your investments and interest will compound over time to grow faster and faster. To learn more about this, read my How Does Compounding Affect My Investments? post.

Starting to invest for retirement can sound more intimidating than it actually is. If you’re not sure where to begin, you might consider reaching out to a financial advisor for guidance. They can help customize an investment plan for you, based on your financial situation and goals.

If your employer offers a 401(k) retirement plan with an employer match, I definitely recommend taking advantage of that. It’s basically free money.

Other options for investing include Individual Retirement Accounts (IRAs), taxable brokerage accounts, and education investment accounts. If you would like to learn more about IRAs, read one of my related blog posts: Why Should I Invest in an IRA? and Which IRA is Right for Me – Traditional or Roth?

You will also need to choose investments within your investment account that match your risk tolerance. These could include investments like stocks, bonds, mutual funds, and real estate. Some types of investments are riskier, so you will want to carefully match this up with your long-term financial goals.

Conclusion

Boosting your financial wealth won’t happen overnight, but with careful planning, it can definitely happen. The habits I’ve listed above will help to get you well on your way!

Check out some of my other posts on saving, making, and investing money:

Disclaimer: This information is intended for educational purposes and is not tailored for the needs of any specific investor. It is important to conduct your own analysis and research before making any investment. It is recommended to independently research and verify or seek financial advice from a professional in connection with any information on this website before using it to make an investment decision or otherwise.