How do you think millionaires live their life? Believe it or not, we will reveal to you their secret budgeting habits!
Just because you have the money to spend, doesn’t mean you have to spend it on new and fancy things. A lot of wealthy people buy regular clothes and don’t pay excessively when buying whatever they want.
Those are just a few easy tips to try.
Pay in Cash
Some think that there is a major difference between how millionaires handle their finances versus the masses: It comes down to cash flow.
“Millionaires are hyper-critical of their inflow and outflows of cash, particularly the expenses, Money is a tool that should work harder for you than you for it.”
Here’s a simple tip to help you manage your cash flow without having to check your bank account every day. “Pay for items in cash, if you can’t, don’t buy it.”
You can also use an envelope system. You write the categories of items you can pay for in cash on envelopes. Then you put the monthly fixed amount of cash into those envelopes. When the money runs out, you can’t spend any more on that item until next month.
Work it backward
Think about your money in reverse, figure out a specific financial freedom number as a goal, then calculate backward on how much you need to earn to make it hit that goal.
You can try one of these four goal-setting methods to help get you started.
Automatically saving your money
Every month you can have your money automatically transferred from your checking to your savings. If you are young you can save $25 a month, if your salary is big enough it can as high as $500 or $1.000 per month.
Retirement plan at a young age
It might be hard to think about saving for the future when you have tons of costs right now, but putting money aside for retirement can prevent a financial headache in the future.
Even if you can’t max out your accounts, contribute as much as you can as early as you can, even if it is the bare minimum, start now, the younger, the better!
For example, if you put $250 a month toward retirement starting at age 35, you would end up with about $250,000 by age 65 with an additional percentage return. If you start 10 years earlier, you’ll have nearly double that.
It is easier than it seems
Have you noticed that all of these tips from a millionaire’s perspective don’t include buying a property or playing in stock markets, they are simple budgeting tips you can go about in your life.