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5 Golden Rules to Keep Your Money Growing and Wallet Full All Year Long

Rich people always save more than anyone else, and below are the 5 key principles they apply and maintain every day.

Administrator

28 February, 2024

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Using cash

This rule may seem backwards in the modern age, when payment apps and credit cards make shopping easier. However, it is precisely that ease and convenience that can lead you to overspend. Spending with cash will help you control your expenses and limit unnecessary spending more effectively.

Set spending limits

According to billionaire Warren Buffett, you should not save what is left after spending, but spend what is left after saving. Do not confuse the order.

You can set up automatic transfers directly from your checking account to an online savings account on a regular basis. This way, you will not dip into your savings each month.

Don’t open multiple credit cards

Thomas Corley, a self-made American millionaire and author of popular books, once shared in one of his works that only 8% of the wealthy use more than one credit card.

“The more credit cards you have, the more likely you are to create unnecessary consumption,” he emphasized.

In reality, when you use a credit card, you do not directly see the amount you are spending, so it is easy to feel “richer” than you actually are. A high credit limit also makes you confident to spend more than you can afford. Not to mention, if you do not fully understand the regulations, interest rates, and fees of credit cards, coupled with inefficient financial management, you are likely to get into debt.

The 24-hour rule

Many of us have the habit of impulsive shopping, liking and buying things without much consideration. On the other hand, the wealthy often think at least a day before deciding to buy an expensive item.

If they find it unnecessary, they will skip the product even if they previously liked it. In difficult economic times, when wallets need to be tightened, this simple rule will help you avoid wastefulness.

Repair before discarding items

Frequently asked questions

Billionaire Warren Buffett advises spending what is left after saving, not the other way around. Set up automatic transfers from your checking account to a dedicated savings account to ensure a consistent savings rate.

Thomas Corley, a self-made American millionaire, notes that only 8% of the wealthy use multiple credit cards. Having too many credit cards can lead to unnecessary spending and a false sense of financial security. Stick to one or a small number to maintain financial discipline.

Implement the 24-hour rule. Take a day to consider any expensive purchases. This simple strategy helps curb impulsive shopping and ensures you only buy what you truly need.

Before discarding items, consider if they can be repaired or refurbished. This practice reduces waste and encourages a more thoughtful relationship with your belongings.