10. Learn Delayed Gratification
In our world of instant everything, patience is a lost virtue. When desire for instant gratification meets money, we end up buying storage units full of things we do not need or really enjoy. At the least, learning to delay gratification will leave you with a less cluttered garage and attic. At best, it teaches a powerful mindset that will make saving for your future easier.
9. Take Responsibility
You are not a product of your circumstances; you are a product of your decisions. When you let your circumstances guide your behaviors, then you are giving up control of your life to anyone who can influence your circumstances. Instead of waiting for the external change, focus on what you can change internally to influence the external problem. Whether the financial situation you find yourself in is your fault or not, it is your responsibility to fix it. Nobody else is going to do it for you. Successful people understand this and take action to improve their situation.
8. Focus on the Big Things
Most people try to fix their income problem by selling small knickknacks on Craigslist, or by making a half-hearted attempt at the latest multi-level marketing craze. Or instead, they will try to fix their spending problem by clipping coupons, accumulating airline miles, or shopping the sales. But at the same time, they are in a house or apartment they cannot afford, driving cars they cannot afford, and are throwing money left and right at the latest electronics, nice clothes, and eating out every meal. These small actions make us feel good about ourselves, but that false sense of accomplishment is what keeps us from real accomplishment. If you are going to spend the time and energy to do something, why not do something that will make a difference.
7. Live Behind your Money
Most Americans spend money before they have it and live in a state where they are perpetually trying to catch their income up to their expenses. You cannot get ahead financially when your income is used to clean up the mess of debt and overspending that you leave behind. Successful people use their money to save for things that are in the future, not pay for expenses in the past.
6. Understand that Income Is not Wealth
Wealth and income are two totally different things. There are many people who make a lot of money who are broke, and many people who make very little money who are wealthy. It does not matter as much how much you make, what matters is what you keep and what you do with it.
5. Invest wisely
Don’t fall for “get rich quick” schemes, do not invest in something you do not understand, and do not let your emotions drive your decisions. Develop a consistent well thought out long-term investment plan and stick with it. This will require you to learn some investing basics. It may be boring, but it can work.
4. Pay Yourself First
This is how you align your finances with your priorities. Most people have a huge disconnect between what they say they value, and how they use/spend their money. Every time money comes in, apply it to your goals first (retirement, giving, saving for intentional fun, etc.). Once the money is transferred out of your account for important things, do not spend more than what is left.
3. Live on significantly less than you make
To build wealth and become financially free, you need to increase assets and decrease debt. To do that, you need to have positive cash flow to invest in assets and pay down debt. To have positive cash flow, you need to create a gap between income and expenses. This buffer will not only allow you to purchase assets and pay off debt, but it will also allow you to absorb any unexpected expenses.
2. Learn Contentment & Generosity
Money does not buy happiness. If you have not found purpose and fulfillment where you are at financially, you will not find it with more money. Being thankful for what you have and giving to others can bring more fulfillment and contentment than consuming ever will.
1. Know Your Why
Financial independence requires sacrifice, and we do not like to sacrifice unless we know that our sacrifice can lead to our desired outcome. Your why (purpose) needs to be strong enough to push you to make the sacrifices and do the things you do not want to do so that it can lead to the purpose you want to accomplish.
If you want to know my top 10 for financial failure, just take the opposite of each of the above.