Money Habits That Can Make You Rich

Types of Investment
Reading Time: 8 minutes


Most, if not all the actions we take on a daily basis may appear to be products of well-thought out decision making processes; but they are not.  They are habits.  And when it comes to our finances, these money habits make the difference in whether one is poor or rich because the way a man works, earns, spends or saves money impact his financial health.

If you want to build enduring wealth, then take steps to cultivate these effective money habits:

#1        Pay yourself first

By all means, at all cost pay yourself first every time you earn an income. Arkard, the Character in the book The Richest Man in Babylon, said “I found the road to wealth when I decided that a part of all I earned was mine to keep.” 

If you are a salary earner, the golden rule is to set aside one-tenth of your monthly income in a saving plan irrespective of the mountain of expenses facing you every passing month.

Avoid the temptation of spending extra, sometime unexpected money that comes your way.  When you get that bonus, a salary raise or a sudden cash gift from a satisfied customer or boss, it is not a time to go shopping or indulge yourself in frivolities.  Rather it is time to increase your nest egg.  In other words, the rule still applies here, put aside at least a tenth of it in your saving plan. 

Whatever you put aside does add up.

To help you cultivate the saving habit, make it an autopilot by giving your bank a standing order to move a certain amount of money to a named account once your monthly salary is credited to your salary account.  Saving on autopilot is becoming easier by the day with the many apps now available to help you manage your money.

Also Read: 8 Sure Ways to Manage Your Money Better and Avoid Personal Financial Troubles

This money you save will work for you to earn more money and make you richer only if you are able to develop habit No. 2, which is, investing in income yielding assets.

#2        Invest

Make your gold multiply. Again, Arkard advises his friends, “Every gold piece you save is a slave to work for you.  Every copper it earns is its child that also can earn for you.  If you would become wealthy, then what you save must earn, and its children must earn, that all may help to give to you the abundance you crave.”

Like a tree, wealth grows from planting a tiny seed.  If you are just starting out in your career, the first kobo you invested is the seed which will grow your money tree.  So the earlier you sow that seed, the sooner your wealth will grow. 

There are many windows available to start investing your savings. An effective habit worth developing is to investing every three months savings in a viable income yielding instruments such as Savings Bonds, Treasury Bills, Certificate of Deposits, stocks and other such investment windows.

Someone once told me that he lent a friend of his a certain amount of money because he didn’t want to spend it.  What a wrong way to save!  Of course, this person did not get his money back; well at least up to the time we were having the conversation, he was yet to get his money back. 

You do not save by lending out your savings.  You are neither a bank nor a money lender.  Put your money in a financial instrument or business that is secured and guaranteed to give you returns. 

This is not to say that it is wrong to help your friends but if you must give out loan to your friends, don’t do it with your savings. 

#3        Control your Spending

As much as possible, spend less than you earn.  In any case, if you are able to cultivate the habit of saving and investing, you would have been far gone in the journey of spending less than you earn.  An effective way to ensure that you live within your income is to avoid impulse buying. 

Always plan your spending!

Your spending is impulsive when you buy things that you did not plan to buy.  Spending in this manner too often will certainly affect your financial conditions and if you are a fixed income earner you will discover that your monthly disposable income hardly lasts you till the next pay day.

One effective way of avoiding impulse buying is to have a budget.  Some people associate personal budgeting with self-deprivation. 


Having a budget helps you to develop a disciplined spending habit.  It tracks your spending and gives you a warning signal whenever you are spending on items outside your plan for the period.

Developing and sticking to a budget is not as easy as it sounds but there are free personal finance apps available that can help you develop and stick to a spending plan and achieve your overall financial goal.

Also Read 8 Reasons You Are Not Getting Rich By Saving Money

#4        Stay out of debt

As much as possible endeavor to stay out of debt.  If you are in one right now, take definite steps to get out of it.  This is because being in debt will not allow you to plan adequately for your future. 

When your debt becomes too much for you to bear, it destroys your self esteem, limits your creative thinking process and inhibits your power to make wealth.  You work to service interest and practically become a slave to your creditor.  There are stories of people who have had to commit suicide because of the impact of mounting debt.

If you spend less than you earn, live within a budgeted spending, invest to earn more income and develop multiple streams of income, it is very unlikely that you will find yourself in a position of debt.

To stay out of debt, pay cash for your purchases and if you can’t afford it now, plan for it and get it when you have the cash, control your use of credit cards and most importantly, avoid borrowing money if you can.

Borrowing is not bad in itself.  People often get into the debt trap because they borrow for the wrong reasons.  As a general rule, do not borrow to fund consumption, rather borrow to fund assets. 

When you borrow money to pay your house rent, buy household equipment, get the latest iphone or buy a new car for your pleasure, you are simply financing your lifestyle with borrowed funds which you will have to repay with interest.  I have come across a man who borrowed money from a finance company at a flat interest rate to fund a birthday party. 

Wasn’t that crazy?

Paying back such money borrowed usually put a strain on your fixed income and this is what usually causes you to default, and then get into the debt trap.

The sound rule to follow is, by all means, finance your consumption with your income and only borrow to finance income yielding asset, if you must.  If you borrow to buy a commercial vehicle which you will invest in Uber, for example, you are certain that that business will finance the repay the loan and also give you some return.  This way, you increase your wealth with borrowing rather than decreasing it.

#5        Set Financial Goals

It really helps to have financial goals.  Having such goals will help you develop a plan of how to achieve it and also push you to have a budget and stick to it.

Goals need not be complicated.  It may be as simple as deciding to build your own home in say two years time, or to get married within the next six months, or to buy a car in three months to aid your mobility.   

Once you achieve one goal, set another and pursue it.  Whatever it is, goals are easy to achieve if they are

S          –           Specific

M        –           Measurable

A         –           Achievable

R         –           Relevant

T         –           Time-Bound          

Properly done, goal setting is a very powerful way of defining what your ideal future shall be and taking positive steps to bringing that future to reality.  You set goals for different aspects of your life: career, family, health, finance, etc.  Your financial goals deals with how you want to live, how much you want to earn to live the way you want and at what time.

#6 Have a contingency fund

How often have you had to alter your plan due to unexpected occurrence that needed to be urgently taken care of?

Emergency expenses, be it failing health, accident, death of a loved one, natural disaster like flood, fire, unplanned major car repair or even loss of jobs, are responsible for majority of people’s inability to become financially free.

But it need not be if you plan your finances very well.  A viable way to take care of unexpected occurrences is to set up an emergency fund.  This fund can either be a separate savings account, an insurance policy or both.

Set aside a particular amount on a monthly basis into your emergency fund and only use it when the unexpected or unplanned events happen.  That way you are not persuaded or forced to alter your savings and investment plans.

This emergency fund also provides the buffer to keep you going in desperate times and will enable you not to resort to borrowing to meet otherwise embarrassing obligations.

#7  Create more than one source of income

Every financially free person has more than one source of income; some wealthy people earn from three to four income sources.  Indeed, it is increasingly becoming dangerous these days to rely on one source of income.   

If corporate organizations do not rely on one source of revenue by establishing subsidiaries, why should you?

It may sound difficult and for some people impossible to be at a job or business and still do other jobs or businesses.  However, with the help of the internet, creating multiple streams of income has become easier than you think.

Buy and sell fast moving consumer goods during the weekends or supply to co-workers and other offices during your break period.  Invest part of your savings in a corner shop. 

Engage in freelance writing if you have the skill or use your skill to provide service to those who need them on part time part time basis. Just do something to earn you legitimate money aside your day job or primary business.

The need to have more than once source of income cannot be overemphasized.  It not only helps you to build your nest egg faster but also provides you with a fall back in case the unexpected happens such as loss of job or business failure. 

The more streams of income you are able to create the faster you are on your way to becoming rich.

#8 Self-development               

Invest in yourself through continuous learning.  The need to read cannot be overemphasized.  If you read the biographies of very wealthy individuals or study the lives of successful people, you will find that reading is one common habit they all have. 

Warren Buffet, for example, is said to read 75 percent of his day and Bill Gates is said to read about 50 books in a year.

Knowledge builds up like compound interest, says Warren Buffet.  Everybody can do it.  Unfortunately only a few are able to cultivate the discipline to do it.  There are an enormous amount of useful ideas and actionable tips, hidden in the pages of books. 

You don’t have to have the same energy as Warren Buffet or Bill Gates but spending at least 30 minutes a day to read useful materials can make the difference in your life.

Very important: Be selective of what you read, do not read for entertainment.  That is what makes the different.

If your goal is to grow your income, read relevant books and materials that deal with money management, personal finance, business, investing and the likes.

Apart from reading, attend seminars, network and form friendship with successful people.  That way you not only learn but are persuaded to copy and replicate methods that work.

Last Words

To create wealth and achieve financial freedom, it is important that you learn to control your money.  Understanding money, how it is earned, how it works and how it is maintained can be attained if you are able to develop good money habits.  This is the first step to taking control and living the kind of your life you desire.

The problem I observe is that we usually think that it is difficult to develop these habits that help us grow our income.  Sometimes, we think it takes an expert in finance to understand these things but the truth is that all it takes is a little effort, one step at  a time and the commitment to move from the point we are to the next most desirable position.

2 Comments on “Money Habits That Can Make You Rich”

  1. I read your on how to become financially rich, it was quite educative and inspiring, for me I have problems of saving, am salary earner with family, I also spend on transportation whenever I go to work each day, my monthly pay after expenses I find it difficult to save, what must I do to save with out trying so hard, and failing due to necessary expenditures surrounding me? Thanks

    1. You have to first take the decision to be financially healthy and being a salary earner, the best way to begin this journey is by saving and investing. The mistake you are making is that you are trying to save after your expenses. Many salary earners make this mistake because obligations that come month-after-month are mountainous.

      You will naturally feel overwhelmed and conclude that you cannot save because your income is too small. The most effective way to go about it is to religiously pay yourself first. Once your salary account is credited, clear 10% of it to dedicated savings account and discipline yourself to live on the remaining 90 percent. Ask born-again Christians how they survive after paying their Tithe. You will be amazed at how you are able to get by while building your financial nest egg.

      There is a growing number of Nigerian institutions offering you the opportunity to automate your saving. That way your saving is automatically deducted from your salary account before you know it. You can check out ALAT by Wema Bank or Cowriywise. These platforms, apart from helping you automate your saving also pay you higher interest, far more than what you can get from your regular savings account with your bank.

      You can also automate your savings by giving your bank a standing order to debit your salary account with a certain amount and credit your savings account on a monthly basis. Once you have accumulated some amount in your savings account, say on a quarterly basis, put it in an investment plan. To avoid the temptation of accessing your savings, do not request for an ATM on this account.

      Most importantly, develop a second source of income. Having another source of income will increase your disposable income and help you manage whatever shortfall that may arise.

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