Being good with money doesn’t mean being wealthy, but being good with money is always healthy.
Being good with money is more about your habits than your income. There are certain things that people who are good with money don’t buy.
First of all, if you want to be good with money, don’t buy a new car. It may sound tempting, but cars are expensive items that lose their value quickly. In fact, a car loses value the moment it’s driven off the lot. After just one year, a new car will have lost about 20% of its value, making it the opposite of an investment. Someone who’s good with money won’t accept a loss like that. Likewise, someone who’s good with money won’t lease a brand new car often.
One of the worst financial decisions most Americans will make will cause them to go deep into debt. With mortgages, the wrong choice in home or mortgage provider will cost you a fortune. This is why people who are good with money don’t buy houses they can’t afford. Even if you can afford the down payment, you should think hard about how you plan on financing your home in the long term.
People who are good with money definitely don’t make purchases that they can’t afford on credit. This common-sense rule is one that many people break due to the psychology of credit cards. Financially wise people don’t spend money they don’t have and they avoid paying interest like the plague. This is also a part of why if you’re good with money, you’ll focus your purchases on quality over quantity. That doesn’t mean buying brand-name apparel, as the rich are less concerned with showing off than they once were. According to Business Insider, the top 1% in the US have been spending less on material goods.