There are a few ideas that serve as the foundation of good money management habits. Spend less than you earn. Try your best to save more than you spend. Develop these routines and you’ll be on your way to building wealth.
If this is true, though, why do so many people fail to achieve financial success? If personal finance was really so straightforward, we’d all be debt free with healthy net worths. What’s holding some of us back?
People who achieve more with their money are those who do many small things right, and over a long period of time. In other words, habits are what set financially successful people apart from others.
If you want to reach personal financial success, you need to develop these seven great habits for yourself.
1. Set goals.
It’s difficult to achieve at a high level if you have no purpose, focus, or direction. Similarly, it’s impossible to succeed if you’re not sure what you’re working toward. Goals can provide that necessary direction. But there’s a difference between a great goal and one that’s doomed from the get-go.
Your goals need to be actionable, specific, and trackable. Monitor your progress and reward yourself for accomplishments. Create positive goals, like “I will save $100 extra every month” (instead of negative ones, like “I will stop spending too much on dining out every month.”).
2. Live frugally.
Financially successful people aren’t the ones that spend lavishly on keeping up an expensive lifestyle. They understand there’s a difference between looking rich and being wealthy. Warren Buffett, for example, is nearly as well-known for being a frugal billionaire as he is for being an investing icon.
If you want financial success, you need to learn to live within your means—and ideally, how to live well and be happy with less.
3. Align priorities with spending.
Money is a tool that can be used like any other, and financially successful people know how to make the most of every cent.
That’s because they align their spending with their priorities and values. They cut back on expenses in areas that don’t provide lasting fulfillment and satisfaction to create room in their budgets for the things that do.
If you want to achieve financial success, you need to focus on your own personal journey. Avoid being influenced by what others spend their money on.
4. Keep a budget and track spending.
Speaking of budgets, financially successful people most certainly know how to use them. They know how much they make, how much they spend, and on what. You can’t succeed with your finances if you don’t have a clue what you’re doing each month. Ignoring your budget or failing to track your spending puts you on the fast track for financial problems like consumer debt.
5. Continue education and increase financial literacy.
Socrates said, “True knowledge exists in knowing that you know nothing.” It’s critical to accept that there’s always more to learn about your money. Those who succeed with what they earn, save, and invest, understand that they need to continue their financial educations and work to increase their financial literacy.
No matter how much progress you’ve made, there’s always something to improve on and learn more about.
6. Earn more.
You can’t grow your wealth through clipping coupons alone. Financially successful people understand that saving more money is one half of the wealth equation. The other half: earning more money. Why? Because working to earn more allows you to fast-track your financial goals and accomplishments.
Don’t hesitate to negotiate for raises and ask for what you’re worth. Establish a side hustle or gig and earn extra money on the side of your full-time job. If you’re passionate about working for yourself, explore freelancing or entrepreneurship to help you boost your earning potential.
7. Take initiative.
People who are financially successful don’t achieve more with their money by sitting back and waiting for good things to come their way. They take action and play an active role in their accomplishments. It’s critical that you learn to capitalize on good opportunities that come your way—and create your own when that well runs dry.
This post originally appeared on gogirlfinance.com.