Update on November 3, 2022: *An important point I missed from this article is to *not live beyond your means. That is to say, try your best to not buy things you cannot afford without credit. Try and separate what you want from what you need. Keep on track with your credit card spending, and be responsible with your money.*
I made this list after reading a stack of books about financial habits back in 2018-2019. It’s helped keep me on track to save money, make prudent financial decisions, and changed the way I think about money and spending. Enjoy.
Top habits
- Save 10-20% of your income per month.
- Max out your 401k.
- Pay off your credit card balance each month.
- Never buy or sell individual stocks.
- Buy inexpensive well-diversified index mutual funds and exchange trading funds.
Financial Wellness
- Wealth is measured in your consistent income, not the amount of cash or assets you have.
- Above all else, pay off your debt as quickly as possible.
- Work out monthly living expenses, and get 6 months in the bank for emergencies.
- Only get credit cards you can pay off instantly in order to build a credit score. (e.g. weekly grocery purchases).
- Do not get a credit (e.g. credit cards or loans) to fix financial situations.
- Don’t buy depreciating items (e.g. cars) with credit.
Investing
- Buy inexpensive, well-diversified index mutual funds and exchange trading funds (ETFs).
- Passive trading often yields better results than active trading.
- Never buy or sell individual stocks or use managed funds.
- For long term investments, riskier is okay.
- Do not look at your investments.
This isn’t financial advice, so don’t take my word for it!