You don’t have to do anything flashy to generate wealth. In fact, most of wealth building revolves around a few ‘boring’ financial habits that you implement over a long stretch. Most people with seven-figure portfolios didn’t get there with lottery tickets. Instead, they practiced good financial discipline and avoided bad routines.
More than 100 people shared some of their top financial habits in a recent Reddit post. These were some of the top habits you can use to bolster your finances.
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Tracking Expenses
The top commenter said that tracking expenses is one of the best things you can do for your financial well-being. While it can be one of the most tedious tasks, it can provide a level of clarity about your finances that you can’t get in any other way.
Knowing how much you spend each month can reveal opportunities to cut costs and indicate how well you are doing with your finances. You may be less prone to impulsive purchases if you monitor your budget.
“I’ve gotten more into this lately, and it really cut down on my frivolous spending,” one Redditor said.
Tracking expenses keeps you accountable. While some banks have mobile apps that let you track each cost, you can also create a spreadsheet that details your monthly expenses.
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Automatically Increase Your Portfolio Contributions
Investing in assets is one of the best ways to build wealth, but some people forget to contribute to their portfolios. Automatic investing has been a popular financial habit, but one Redditor took this common tactic to a new level.
“Automatically increase your [portfolio] contributions by at least 1% anytime you get a pay increase. You won’t even feel the difference in your monthly income, but over time, that can make a substantial increase in your wealth,” one Redditor said.
You can also strive to boost your portfolio contributions by 1% each year. If you contribute $1,000 to your portfolio each month, aim to contribute at least $1,010 per month to your portfolio next year. You can always raise this number by a higher amount, but any progress will get you closer to your long-term financial goals.
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Make Spreadsheets That Compare The Costs Of Two Choices
One Redditor was annoyed about having to ride the bus to work instead of buying a car until they crunched the numbers in a spreadsheet. When calculating the financial impact of riding the bus versus buying a car, the Redditor realized how much the bus saves them.
This Redditor explained that riding the bus to work costs $80 per month. However, buying a car would result in $110 per month in parking costs. That does not include auto insurance or the cost of buying the car.
Saving that much money makes it easier for the Redditor to invest in assets and have extra money left over. Not everyone’s lifestyle justifies a car, and it’s good to review the numbers before making a big purchase.
“I went from constantly being annoyed to gamifying how long I can go before breaking down and buying a car,” the Redditor said.
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