5 Go to Financial Behaviors
For financial freedom
If I could condense twenty or so years of wealth accumulation onto a 3 x 5 index card, and keep it handy as a refresher, this exercise would reinforce good personal finance behaviors. My mom is a fan of 3 x 5 index cards and has encouraged me to use them for the simplest reminders. Even in this day of mobile lists, downloading, songs, streams, and tweets, writing down these five behaviors in your own handwriting and referring back to them frequently will result in a larger Personal Financial Statement over time.
Focus on affordable housing first.
I lucked out plain and simple. But it did take saying “NO” to a lot of Realtors who were pushing expensive houses that were well outside of my price range. I can just see how the housing crisis evolved. We tend to listen to people that hold themselves out as experts. Statements like “Don’t worry, it can only go up in value.” OR “You’ll build equity and you can always sell it if needed.” Here we are some six to seven years later and many Americans are still under water.
I didn’t take that deal. I bought a cheap townhouse that I financed with a 15-year mortgage and paid off in 9 years. No….it’s not the Taj Mahal. Ironically, all my friends tell me they love my house. My cheap paid-off condo allows me to sleep at night and focus my attention on the next four behaviors.
Live well below your means.
The 15-year mortgage was an impulsive last minute decision and obviously wreaked havoc on implementing this behavior.
Or did it?
You will adapt when you want to achieve something won’t you? Deposit paycheck to savings account, transfer enough to checking account to cover variable costs with weekly cash budget. Use credit cards for purchase protection only. Yes, sounding like a broken record. This one’s non-negotiable!
Continue to reinvent thyself often.
Another non-negotiable behavior. Social media makes this all possible. You can have a virtual resume working for you 24/7 for all to view and take in. Any introvert can now sell themselves to virtually anyone or any company at anytime. Get started. Use LinkedIn, Facebook, Twitter, etc.
Dollar Cost Average (DCA).
Let’s talk DCA here. It is entirely behavior-based. By saving and investing bi-weekly, monthly, etc. a sum of money, the power of compounding and time will result in an accumulation of wealth. Notwithstanding volatility in stock/bond markets, this one technique, combined with living well below your means is why so many middle income folks WILL become millionaires.
Save for a rainy day
It’s called an Emergency Fund and if you use DCA, the result will not only contribute to your wealth accumulation, but also allow you to sleep better at night and be strategically positioned to take advantage of opportunities that you might not have otherwise if you are living paycheck-to-paycheck.
I hope that this condensed list of ideas will resonate with you or someone you know.
Remember this one thing: These behaviors are absolutely achievable under any income level. The challenge is taking the time to go through each behavior and craft the process that works for you and your life.
Because, as I always say in the end, it is about life and how you live it.
In the spirit of financial well-being,