THE SECRET LIFE HACKS OF THE AVERAGE RICH GIRL
Less is actually more.
Have you ever wondered why some people are just rich? Maybe you haven’t, but you should. It is not always because the rich make more money. Getting and staying rich is about a chosen LIFEstyle not WORKstyle. What does this mean, you ask? The financially savvy is an elite group that make the following decisions habits. Over and over again. And now, you can too:
Create a budget (and stick to it)
Get comfortable
Align your spending with your values
Accept that less is actually more
Prioritize your goals
Protect what matters most
Invest. Invest. Invest.
Review, update, manage & repeat
Create a budget (and stick to it)
This one might seem obvious (since literally everyone and their grandmother has told you that the key to money management is a budget). But the reality is… it is. However, what is more important is that you stick to it (see our earlier posts on budgeting and managing your spending).
Get comfortable
…with tough and sometimes awkward conversations. As we mentioned in our saving money post, negotiate everything. Rich people do this all the time: banking fees, late fees, utility bills, service providers, etc. Negotiating not about being cheap. It is getting the best bang for your buck, while keeping both ends of the deal happy. Of course, asking for a lower price or to waive fees is not always easy but it is often worth politely and respectfully asking - hey, what’s the worst that can happen?
Another habit is to continuously ask for raises at work. Although this is a topic for another post, it is important that you get comfortable with this. According to payscale.com, women make only $0.81 for every dollar a man makes as of March 2020. There are many reasons why this may be the case, including gender bias, discrimination, social issues, etc. (sadly, that list could go on and on) - one plausible reason for this massive disparity is that women are less socialized to discuss money (hence the birth of doe). Therefore, it is critical that women speak up and talk about their compensation. Please visit our post on negotiating a raise for a guide to having that conversation with your boss.
Align your spending with your values
Being “rich” for all intents and purposes is not about having more money - it’s about the quality of life. Sure, more money = more options. But more money does not always equal a better life. It’s all about how you spend that money. What’s important is that you align each and every dollar to your values, whether that is a lot of dollars or not so many. The allocation is what matters.
Accept that less is actually more
The Magic of Tidying Up is literally a magical book. Does what you have (or are about to click that purchase button for) spark joy? Sometimes we would think that having more is better but that is not always the case (do you have any idea how stressful having a house staff is?! Just kidding. My house ‘staff’ includes a Roomba and a dishwasher). Anyways - what is important to recognize is that having more is often a symptom of a bigger void. I online shop when I am bored (accompanied by too much chocolate). Do I actually need the things I am buying? Usually the answer is no, of course not. The void of boredom is powerful but I am attempting and reliability failing at filling. Whenever you are making a purpose that is perhaps frivolous, ask yourself how it aligns to your values or if you may be experiencing something else that can be solved more cheaply (or in therapy).
Prioritize your goals
A secret of the rich is that they have goals. Clearly, identifiable goals. Create a vision board for your life. Write down what it is that you want to accomplish in your life. Make it real and tangible.
Protect what matters most
This point is largely on insurance but I had to disguise it with fancy wording since insurance is SUPER boring. HOWEVER, I will make it quick. Health insurance, homeowners/renters insurance, car insurance and in some cases, life insurance are CRITICAL. Do not get yourself into a situation where you risk a lot for a little (e.g. small monthly premium).
Invest. Invest. Invest.
If you have $1 or $1 million - invest it. We will talk more about how to invest and understanding the risks associated with investing. But for now, the takeaway is that if you want to be rich, you HAVE to invest. This is the single most important element to attaining wealth.
Review, update, manage & repeat
Finally, once you have committed to the above rules into habit, review your progress, update where necessary, manage your weaknesses and repeat this process often. Then, you will be well on your way to living a life of the financially savvy.