Rich Habits - part I

Success Habits of the Rich

From:

https://www.success.com/16-rich-habits/

I saw this and wanted to write on it (and, to be honest, I didn’t want to write on COVID-19, or Black Lives Matter or racial hatred - I can come back to those, but I wanted to be more upbeat)

The article starts talking about habits:

“Instead, the differences are in our daily habits. Do you realize that these subconscious, second-nature activities make up 40 percent of our waking hours? That means that two out of every five minutes, all day and every day, we operate on autopilot. It’s true: Habits are neural pathways stored in the basal ganglia, a golf ball-size mass of tissue right in the center of our brains, in the limbic system.

“This neural fast lane is meant to save the brain energy: When a habit is formed and stored in this region, the parts of the brain involved in deeper decision-making cease to fully participate in the activity. However, we all know there are good habits and bad habits.”

So, let’s get started!!

-1 Live within your means!!

The article suggests that wealthy people save for their future.  In my case, the “future is now”.  I/we saved part of every payroll check - first at 10% and later at 20% and put it into a retirement account (IRA).  Even with my pending divorce - and the COVID-19 virus hitting the stock market - I think I have funds for the future.  And, I know I get into some death thoughts at times, if and when I run out of funds, I will die!!!  It is my intent to ‘Invest” my surviving funds in higher education scholarships (most likely the endowed scholarship fund at DSU).  

The article states:

“Wealthy people avoid overspending by paying their future selves first. They save 20 percent of their net income and live on the remaining 80 percent. Here are some sensible ways to budget your monthly net pay:

• Spend no more than 25 percent on housing, no matter if you own or rent.

• Spend no more than 15 percent on food.

• Limit entertainment—bars, movies, miniature golf, whatever—to no more than 10  percent of your spending. Vacations should account for no more than 5 percent of your annual net pay.

• Spend no more than 5 percent on auto loans, and never lease. Ninety-four percent of the wealthy buy instead of leasing. These folks keep their cars until the wheels fall off, taking great care along the way so that they save money in the long run.

• Stay away from accumulating credit card debt. If you are doing this, it’s a clear sign that you need to cut back somewhere.  

• Think of savings and investments as two completely different things. You should never lose money on your savings. Try to stash six months of living expenses in an emergency fund in case you lose your job or your business goes belly-up.

• Contribute as much as you can afford to a retirement plan. If you work for a company that matches your contributions up to a certain percentage, great. Always take that free money when you can get it.

With the recent coronavirus/COVID-19, job layoffs, the stock market hit, many people lost jobs, and some lost health insurance - just when they might need it the most for paying for hospital stays from this virus.  

And, for me - just looking at these:

• Rent/housing - my apartment is on the cheap side - and less than 25% of my monthly income.  With my electrical, water, trash, and related, it might be just about 25%.  

• Food - I really don’t know what I am spending on food.  My guess is that I am less than the 15% suggested.  I think I shop wisely - and avoid impulse buying.  (Although I did get tapioca and butterscotch pudding the other day!!!).  I have cut back on my peanut butter habit (and I miss it - but I’m okay).  My crockpot gets a lot of boneless chicken breasts with rice - or with beans - or with lentils.  (And, I get lots of fiber!!  <smile>)

• I have no auto loans.  My car is now eight years old - and as suggested, I am planning on driving it until the wheels come off!! (If I am to splurge in the future, I want something quasi-practical for a senior driver - like an autonomous vehicle!!)

• Credit card debt.  Years ago, when I worked at Citibank in the summers, I/we learned to use the credit card frequently - but pay off the total amount every month.  

• Savings - I had a major car repair in January (transmission failure) that wiped out most of my/our savings, but I am working on bringing that back up!!

WOW - this article had 16 habits - and I mostly got through the first one today!!  I will return to this tomorrow!!!

Be careful with your money, your health, your relationships, your attitude, and your brain!!

Hugs!!

Karen