What does it take to become a millionaire? That is the question many of us ask ourselves every day. For those who are living paycheck to paycheck, becoming a millionaire seems like an impossible dream. But is it really impossible? Most people don’t become millionaires overnight. It takes years of dedication and discipline. But, if you set your sights high, you can achieve the impossible.
Here are a few habits self-made millionaires do that helped them create financial freedom.
1. Spend Wisely.
Yes, we are talking about creating a budget. Creating a budget will help you know exactly where your money is going.
No matter what your income is, you should be creating a monthly budget to keep track of your income and expenses. It will hold you accountable for your spending habits and will help create a plan for saving money.
Millionaires don’t build a comfortable emergency or retirement fund by luck. Take control of your money. Put it to work where it will make the most bang for your buck.
2. Set goals.
Where do you want to be in 5 years? Where do you want to be in 10 years? What do you want your retirement to look like?
Setting goals will help you have something to work towards. If you want to be a millionaire when you retire, figure out what you need to be doing right now in order to make that happen. If that means increasing your 401k contribution to 20 percent or higher, then figure out how to make that work in your finances today.
Setting goals now will help you make those goals come true in the future.
3. Live frugally.
Many people who are making a decent income still find themselves living paycheck to paycheck because of their lifestyle choices. When their income goes up, their lifestyle expenses go up as well.
If you got a five percent raise and started putting that money directly towards your 401k or savings account, can you imagine how much money you could save in a few short years?
Remember Dave Ramsey’s famous quote: “Live like no one else today so you can live like no one else.” Be true to your budget and don’t make any impulse purchases that you could honestly live without.
4. Put your money to work.
Millionaires invest their money wisely. If the company you work for matches up to five percent of your 401k contribution, then you should invest at least five percent into your 401k. Don’t lose out on free money that the company is willing to give you.
Likewise, if your property manager offers you an opportunity to enroll in RentPlus and build your credit, you should enroll. Building your credit while doing something you already do on a regular basis is too good of a deal to pass up.
Be wise with your finances and think about what you’re spending your hard-earned money on. Don’t throw it away on stuff that will depreciate with time. Invest it in something that will help you create financial freedom.
Millionaires are all around us. We often don’t recognize them because they aren’t living extravagantly. They don’t drive fancy sport cars or wear expensive jewelry. They are content with their living expenses. They spend their money wisely and focus on what truly matters.
They have created financial freedom.