God made us crave success and success here means LOTS OF MONEY.
He made us like Him – God-like.
We know how big achievements we can make and how rich we want to become.
Sadly, many people realise this but do nothing about their finances.
You either start adopting mindsets like rich people are evil, or money is evil.
Before you know it, you wallow in debt and jealousy when you hear of successful people.
Do you want to figure out how you can achieve financial success?
Are you curious to find out how the rich, wealthy and successful people of the world get, retain and grow their income?
Successful people have certain financial habits (that may seem ordinary) that they incorporate into their lifestyle every day.
Some of these successful people have been kind enough with their “secret” financial habits that have made them be as successful as they are today.
This is good news for us because we can take lessons from their lives and the things that they do and implement these financial habits into ours.
In this article, I will share with you the financial habits of successful people.
They are easy and well-proven approaches that you can use to manage your money management habits for better financial standing.
It will also drive you to your success when you have some positive lifestyle changes.
I have come to the conclusion that successful people follow rules (rules that no one else/their neighbour believes is too difficult) and they don’t give up until they achieve what they set their minds to.
25 Easy Financial Habits of Successful People to Follow
Here are the 25 financial habits of successful people and they include:
- They establish saving goals early on in life.
One financial habit of successful people is that they start saving their money very early.
Even with their first paycheck, they do not forget to put some money aside for saving.
It is very important to have saving goals when you want to achieve financial success.
We have rules for saving and the most common one that these successful people use is the 60:40 rule.
This means that only 60% of their income is used on expenses such as aren’t and water while the 40% is to be saved.
I know we all have been told to only save 10% of our income, but I’m not telling you to do what everyone else is doing.
You have to have high saving goals to be financially successful.
- They avoid lifestyle jump
Financially successful people do not force an upgrade into their lifestyle.
If you are always concerned about how you are going to look when you have this car or this house and then you make bad decisions, you have to ditch this habit.
You do not have to compare your life to anyone else’s or keep up with the Joneses.
A lifestyle jump is a temporary high that we take in our lives every time we get an income or our current income increases.
If you do this, you will be living paycheck to paycheck.
You have to adopt the habit of setting aside any additional income you get every year for saving or investing.
- They automate their investment
This is a very important and common habit for people who are successful financially.
Oftentimes when financial decisions like investing are left up to you, you will end up diverting the funds to serve other purposes.
If you can make your money “vanish” automatically, then you can achieve financial success.
You can inform your bank to automatically cut a certain amount of money from your account to be invested in your investment area of choice.
These steps should happen on their own without your intervention.
When you automate your investment, you will save yourself a lot of effort and it is going to be easier to build accountability.
- They live a frugal life
Another financial habit that you want to adopt from successful people is living a frugal lifestyle.
A frugal life is a life that is not filled with excesses. It is a minimalist lifestyle.
According to the latest reports, 65% of successful people live a frugal life. Let’s look at Bill Gates for example.
A very simple man rocking the same outfit every day.
This proves that there is only a limited number of things that you genuinely need in your life, like clothes.
Bill Gates can buy a whole wardrobe if not two.
But he doesn’t. Living a frugal life doesn’t mean that you worry about spending money.
It means that you are consciously aware of what you need and don’t need.
- They choose their friends carefully
There’s someone who said that you are the average of the 5 people you spend most of your time with.
Now, look at your friends. In terms of finances, who is successful?
Who is responsible for their money?
What is their overall money mindset?
What are their financial habits?
If none of them is where you want to be, then you can minimise the time you spend with them or change your mindset.
Surround yourself with like-minded people. Avoid partying and eating out every time.
Live within your own means.
Self-restraint is a very important trait if you want to achieve financial success.
Live within your means and learn to say no when those Subaru Boys ask you to go hang out in Vasha.
- They acquire financial literacy
Financial literacy is a very important life lesson that is sadly not taught in the traditional schooling system.
If you want to understand how money works, then you have to invest your time into gaining some financial literacy skills.
Start with the basics and gain the necessary knowledge and understanding of various topics in personal finance such as saving and investments.
Get into the habit of familiarising yourself with these financial matters if you want to achieve financial success and freedom.
- They have emergency funds
An emergency fund is a money that you set aside to act as a cushion in a situation where you lose your current source of income.
This money is going to help you live off a given period of time until you get back on your feet.
Think about this for a moment: if you lost your job today, what would be the first thing you do?
If the first thing you think about is moving to a smaller house from the house you are far from achieving financial success.
You have to have an emergency fund that will last you 3 to 6 months to pull yourself back up.
Your business may fail, and you may lose your job or go through pay cuts.
You have to know that you are prepared when and if this happens.
Get into the habit of saving part of your money as an emergency fund, just like these financially successful people do.
- They avoid debt
One financial habit of successful people is that they will avoid debt as much as they can.
In fact, financially successful people do not get into debt, they are the lenders.
If you love asking for loans and getting into debt, you have to ditch this habit.
You are killing your future when you constantly find yourself in debts so huge that you cannot pay them off.
Financially successful people understand that when they are in debt, they are losing money, especially with the high-interest rates charged.
If you can, avoid debt.
You will achieve financial success in a much easier way.
- They utilise tax deductions
According to Investopedia, a tax deduction is an item you can subtract from your taxable income to lower the amount of taxes you owe.
Tax deductions are a good thing because they lower the amount of taxes that you are supposed to pay.
For example, if you earn Ksh. 50,000 a year and you contribute Ksh. 100,000 of that amount as a donation to charity, then this donation is a tax-deductible item and the amount of taxes you will pay is going to be reduced.
There are many examples of these tax deductions.
Get into the habit of utilising these tax deductions if you want to achieve financial success.
Financially successful people share this habit in common.
- They look for other income streams
If you want to be successful financially, you have to get into the habit of looking for different income streams.
You cannot just rely on your 9 to 5 job to get you to your financial goals.
If that’s what you are doing, then you are as short-sighted.
To achieve financial success, you need to widen your scope.
You can start a side hustle; have an eCommerce store that you’ll be running aside from your normal job.
People who have an entrepreneurial spirit are the luckiest when it comes to adopting this financial habit.
Financially successful people earn money both actively and passively.
You should do that too.
- They seek professional financial advice
This is a good practice habit that financially successful people do.
They understand the importance of teamwork.
You cannot do everything alone.
There is so much to learn in the world of finance and if you can find a reliable and credible person who can take you through this journey, then you are in luck.
Get into the habit of seeking financial advice from a financial advisor or have an accountant who is going to help you with your books of account.
You have to find trustworthy people who are going to propel you towards achieving financial success.
- They budget their money
Financially successful people understand the importance of budgeting.
Budgeting allows you to create a spending plan for your income.
This is a good financial habit if you want to achieve financial success.
When you budget, you will create a list of all the important bills you need to pay and you will also avoid working outside the budget on things that you do not need.
A lot of people have said that budgeting has really helped them to avoid heading into a financial disaster.
They understood themselves and they eliminated unnecessary expenses and debts.
Budgeting also helps you to have a clear financial plan and goals for your life.
You will also be operating within your spending limit.
- They embrace delayed gratification
According to Wikipedia, delayed gratification is the resistance to the temptation of an immediate pleasure in the hope of obtaining a valuable and long-lasting reward in the long term.
People who are financially successful have a habit of postponing their short-lived joys for an even better experience.
For example, you can put off getting a new car now and buy a better one later.
If you have a reliable means of transportation, then you do not really need a car now.
You have to master self-restraint for delayed gratification.
You will see that the results will be much better.
You will improve your saving and spending habits when you do this.
- They plan early for retirement
Financially successful people value their future selves more than their current selves.
This is why they are so much into the habit of planning and saving for their retirement.
You will not be working for the rest of your life.
You have to make sure that your future is financially secure once you stop working.
One way to do this is by starting to save for your retirement as early as now.
Have a retirement saving plan and goal and do not forget to execute this habit.
If you do not plan for your retirement now, then the chances of you achieving financial success are very slim.
- They keep their recurring monthly expenses to a minimum
Overall, the amount of money you spend on your monthly expenses should not exceed 28% of your monthly income.
You need to keep your expenses low if you want to have more money for savings and investments.
You do not need all those clothes, shoes or more cosmetic products that will just be sitting idly in your closet.
You can downgrade and live in a smaller house and save on rent, because the truth is, you do not need that two bedroomed house when you are living alone.
Get into the habit of tracking your expenses so that you can know what you need to cut down on or cut off completely.
- Wealthy people control impulse spending
If you love purchasing items on the spot without planning ahead of time, then you need to quit this bad financial habit.
Most people who are successful financially work with a shopping list every time they go out shopping.
That way, they only get what they went to get and avoid impulse buying.
If you impulse buy too much, please stop. You will not achieve financial success this way.
- They pay bills on time/ahead of time
Financially successful people do wait for a landlord to knock on their door asking for last month’s rent, or for the debt collection agency to make annoying calls asking for payment.
They take initiative first.
It is important to pay your bills immediately when you have money and avoid piling them up.
If you have this habit, you realise that you will always be living in constant stress and worry about money.
You have to adopt the habit of paying your bills on time if you want to be like these financially successful people.
- They do not waste time complaining
I dislike people who always have something to complain about.
When things do not go their way, all they do is complain.
One financial habit of successful people is that when things don’t go their way, instead of complaining, they change course and find a better way to combat the situation.
If they cannot do that, then they learn from the situation or look for a way to use the situation to their advantage.
This is the habit that you should incorporate into your daily life.
If you complain too much, you will only lead a miserable life.
- Successful people buy value
Financially successful people have the habit of going for good quality items any time they make a purchase. Ever heard of the saying, cheap is expensive?
Well, it is. I always say it is better to get one quality item at the price of multiple knockoff items.
You should embrace this habit.
It will save you a lot of money that you will otherwise lose as repair and maintenance costs.
Always buy value. This is a great habit that will help you achieve financial success.
- They read one financial book each year
Do you love reading?
What books do you love reading?
Do you mind reading financial books?
Financially successful people appreciate the insight and depth of understanding they can get from financial books. If you can find time to read, do not skimp on it.
You can start with one of my favourite book series “Rich Dad, Poor Dad” by Robert Kiyosaki.
If you can’t find time to read books, you can always read magazine and article reports or watch business shows.
This habit will help you see how you can achieve financial success.
- Successful people shop without credit cards
It is easy to overspend using your credit cards.
Financially successful people understand this fact and they avoid using credit cards on their daily purchases.
Cash is much easier to manage because you can visualise money leaving your pockets.
You can abuse your credit cards without even intending to.
You have to adopt this habit of shopping without your credit cards if you want to achieve success financially.
- They balance their chequebook regularly
If you do not know your current financial status, you have to balance your chequebook.
This is why I said that you need to hire an accountant who is going to help you calculate your Net Worth and a financial advisor who will help you make the necessary changes in your financial habits based on your current financial position.
Balancing your chequebook is a good way to know your financial standing.
- They start their own businesses
It is so hard to find a financially successful person who doesn’t run a business on the side.
If you do find one, please point me in their direction.
Starting a business is a good way to achieve financial success and independence.
- They pay themselves first
Financially successful people pay themselves because they believe they deserve it.
And they do. After putting in so much hard work and effort you need to pay yourself to keep yourself motivated.
If all your money goes to expenses and saving and investing, without leaving out some money for you to relax, you will be burdened by the work that you are doing.
- They believe in giving back.
There is a text that says, “For the measure with which you give, so shall you receive.” You have to be a giver if you want to receive.
That is why you see so many people who are successful financially contribute heavily to charity organisations.
Look at your financial capabilities and lend a hand or two when you can.
FAQs on Financial Habits of Successful People
- What are the 4 habits of success?
The habits of success are
Ability to prioritise
Focus on energy
Ask God for guidance and help
2. Why are financial habits important?
Financial habits are important because
Allow money to work towards your goals
Make thoughtful decisions
Allow you to be confident and not vulnerable
No impulse buying
Have peace and avoid stress
3. What are healthy financial habits?
The financial healthy habits include:
Pay yourself first
Pay on time every time
Save for retirement
Resource Related to Financial Habits of Successful People
50 Secrets Habits of Highly Successful People to Adopt as a Kenyan
Money Mindset and How to Become Wealthy By Changing Your Mindset as a Kenyan
You can only go far by standing on the shoulders of giants.
If you want to be financially successful, start by studying the daily lives and financial decisions of people who are successful with their finances.
Look at Bill Gates.
What are his financial habits?
Does he live an extravagant lifestyle?
He understands the value of living a frugal life.
Once you have learnt their habits, you have to be ready to adopt these habits and keep doing them on repeat if you want to be financially successful.
Remember, do not be too hard on yourself.
Do not expect instant results.
Start now and take one step at a time.
Do you want to become financially successful?
What and how do you define success?