You know, one question I always hear a lot over the years is the following:
What’s the best secret to attracting more wealth in your life?
Whenever I hear that, the answer can vary, and I’ve listened to many responses to that question.
So, the answer to that question can be subjective.
There’s certainly no secret that everyone will instantly become wealthier over time.
If the secret were so easy to do, everyone would be doing it, right?
Then we would be all millionaires in that case — and life would be fantastic.
But we know that’s not the case. So, here’s how I would answer that question:
To be wealthy, you have to be disciplined in how you use the money you have at your disposal.
There may be a time when you may have to struggle and live below your means.
If that means putting money aside for an emergency fund or investing it in something that can tell much more in the future, then that’s what it’ll take.
If it requires you to improve your financial well-being, I have nothing against that.
Someone who I follow once said: Being broke is temporary. But being poor is more of a mindset issue.
If you’re broke, keep in mind that you can improve your financial situation over time.
You also can change your mindset on how money works in the real world.
The sooner you understand it, the sooner you can get on the right track to financial success.
Reality Check: Current Financial Trends
For many people, it’s easy to fall for consumption and easy credit, which makes overspending so familiar.
Unfortunately, we live in a society where consumption and using credit cards are encouraged.
When, in fact, it’s not good if someone spends and borrows money regularly.
Especially if the cost of living is increasing in most places, credit card usage seems to be becoming more common.
Here are some shocking numbers I found in a recent Yahoo Finance article:
Nearly half of Americans (48%) use credit cards to pay for their living expenses.The average American spends around $1506 on their credit card every month. For millennials, that number is higher, on average, and is $2410 each month.Around 43% of credit card users spend more money than they earn.
These numbers are not good, and it shows that the overall financial health of Americans looks dire.
When I read that article, it didn’t make me feel good about how Americans use their money.
There’s a lack of financial literacy here, so more financial education is needed.
My Basic Tips For Personal Finance 101
When it comes to personal finance, people may feel uncomfortable about improving their finances.
Why is that? They don’t want to cut back on their spending or have to make sacrifices to their current lifestyle.
I know that can be hard to swallow, but it’s necessary to get back to managing your finances.
Most people prefer to raise their lifestyles instead of using their money to invest in themselves (or build for a better future).
People are in the “I want it now” instead of 10 years from now mentality. I’d rather be patient and wait it out.
If you want to improve your finances, here are a few simple tips to keep in mind.
You’ll never have to read another personal finance book again if you follow the tips I share below.
Tip #1: Spend Less Than You Make
Spending less than you make is the first step toward achieving financial freedom.
It may be hard for many people who want to raise their lifestyle.
But spending less than you make will help ensure you have money left over for other things.
Once you set aside money for investments and expenses, there should be money left over for other things.
If that’s to buy personal things, having a couple of hundred dollars left makes a difference.
Even if you get a significant pay raise or your income dramatically increases, you still want to spend less than you make.
That’s what most people will do when their income goes up. They’ll spend more of it rather than use it for saving or investing for their future.
But first and foremost, spend less than you make — regardless of how much you earn.
Tip #2 Save For A Rainy Day
I’m not too crazy about saving money. In other words, saving and scrimping often won’t get you anywhere.
Not to mention, savings accounts today don’t give you a lot of interest in return.
With inflation rising, you’re losing money by keeping it in a savings account.
But there’s one exception: Having an emergency fund available as your sole savings account.
If you have an emergency fund set aside for unexpected expenses, it’s good to have some emergency savings set aside if it happens.
It’s a much better alternative than having to default on a credit card. You’re just putting yourself into bad debt.
How much should you put aside for an emergency fund? Aim for 3–6 months of living expenses.
I prefer at least 12 months of living expenses, as you never know what could happen if you find yourself out of work for an extended period.
But, at least get an emergency fund in place so you’re ready to tackle those unexpected bills.
Tip #3 Invest The Rest In Things You Understand
Most importantly, whatever money you have leftover, invest the rest in things you understand.
By meaning what you understand, ensure you get some education or the fundamentals before investing in something worthwhile.
I’m not just talking about the stock market.
That’s way too common to default to investing in the stock market when there are better options you can look into as well.
The stock market may not be the best fit for you, especially if you’re new. Don’t think that you can make a lot of money quickly.
That’s the wrong approach to take when, in fact, you’re more likely to lose money if you don’t understand how to invest in the stock market at all.
I took that route before, which was one of my biggest mistakes. Make sure to get some education first before you decide to invest in the stock market.
If you don’t know what to invest in, it’s always best to invest in yourself.
Investing in yourself will always provide the best return when you take a bet on yourself.
That’s always been the case for most people who take the initiative to invest in themselves.
But start somewhere. If you don’t know how or where to invest your money, invest in yourself.
You can’t go wrong with that.
Your Financial Future Begins Today
These are essential tips to follow as you start on your financial journey.
It may not be easy initially, but if you follow through and take action, you may see substantial results.
If it requires living below your means for a short period, it can make all of the difference in your financial future.
If you want to learn how you can start on that path, I have a free resource that you can use to see where 1% in weekly returns will take you.
I refer to it as the “Millionaire calculator”, and it’s so powerful to use.
I even find it addicting to use, as it’s powerful to see where 1% each week will eventually take you.
If that makes you curious, check it out by signing up for my email list.
You’ll get this incredible resource, plus some other bonuses as well.
Look forward to seeing you on the other side.
Until tomorrow,
-Eric
The Secret To Building Wealth In 2025 was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.