When it comes to earning more money, building some degree of wealth or achieving financial freedom, just as in every other area of life, all it takes is to build some smart habits and get rid of some less smart ones.
As T. Harv Eker, author of Secrets of the Millionaire Mind, put it: if you want to be a great golfer, you can learn how to do it; if you want to be a great pianist, you can learn how to do it; if you want to be rich, you can learn how to do it. The process is the same.
And to do that, we need to make some changes to our lifestyle.
Steps to earn more money and get your personal finances in order
1. Set financial goals and a plan
To get anywhere, we first need to know where we want to go. And having a financial goal broken down into small, achievable goals helps us reach it.
2. Have a budget
This advice is nothing new. Our personal finances will go much better if we get into the habit of having a monthly budget, in which we allocate the money we earn to essential expenses, to savings (at least 20% of our income) and to the money we are going to spend on leisure.
3. Know where the money you spend ends up
We need to have total and absolute control over where the money we don’t manage to save goes, from small expenses to the biggest ones. If we know what we spend on and do our monthly and yearly sums, we can do something about it.
4. If you buy something new, get rid of the old one
I call this habit “replace, don’t add”. One way to stop compulsive and unnecessary shopping is to get into the habit, for example, of getting rid of an old item of clothing whenever we buy a new one. If we haven’t thrown it away, it’s because it’s still usable, and if it’s still usable, we should ask ourselves whether we need to buy another. The same goes for tech products and other things.
5. Don’t buy on credit
There’s little more to say about buying on credit, especially when we buy something we will enjoy for less time than we will spend paying off the loan.
To these we can add a few other habits, such as:
6. Spend time with different kinds of people
Bearing in mind that we are the average of the people we spend the most time with, let’s try to spend more time with people who have talent or skills we admire and want to learn.
If you raise the intellectual level of your circle of friends, your own intellectual level will rise through sheer momentum. If they are entrepreneurial, creative people who are constantly coming up with ideas, as well as businesspeople, our mind will grow, and so will our money.
7. Put your money to work
Earn more money by generating extra income, passive income, or start learning about the stock market, but make sure the money you earn brings you more money, whether by investing in a business idea or in fixed income and equities.
You can look for a part-time job or earn money online, but try to increase your income in one way or another.
8. Read as much as you can
If you read an author, you may end up thinking like that author. The same happens when you read the biography of a successful person. Turn off the TV and spend more time with books. It’s undoubtedly the most effective way to end up earning much more money than average.
Successful people stand out for constantly learning and reading.
9. Embrace discomfort
If you want to succeed in life, achieve financial freedom or get ahead, you’ll have to get used to uncertainty and do all those things most people find uncomfortable and uncertain.
Taking risks is uncomfortable. That’s why most people don’t take them and stay in their comfort zone.
Uncertainty makes most people uneasy, but many rich people say that if you aren’t experiencing discomfort and uncertainty, it’s because you aren’t fighting for a big goal.
See also: Why you don’t have money, according to Jordan Belfort
Featured image: BrokenSphere, CC BY-SA 3.0, via Wikimedia Commons.
