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Get Rich With Good Habits

Mary Dalrymple

If you want to get rich quick, you could win the lottery, discover buried golden treasure, or inherit a big pile of cash. But if none of those approaches has worked for you so far, never fear -- you also can put yourself on a path to riches by more humble and realistic means.

By establishing two basic habits, you can make money and save yourself from unnecessary expenses. It looks simple at first, but it may be harder than you think.

What are these secret habits that will make you wealthy? First, pay every single bill on time. Second, save some money every single month.

Here's why these two seemingly obvious habits can pay you hefty dividends. First, a late bill payment here or there can do lots of financial damage. Paying every single bill on time will prevent that costly calamity. It will obviously save you lots of money by preventing late fees and other charges that can drain your checking account for no good reason.

Consistently good bill-paying habits also mean you'll have good credit. Your good behavior will bring you savings through low interest rates when you apply for a loan or use your credit card. You'll also avoid the nasty trap of credit card default rates. That's when all your credit cards raise your interest rates because you made one late payment on a completely unrelated bill. (Yep, they do that.)

Follow up this good habit with the second and save a little money every month. In this case, consistency is just as important as the amount of money you set aside. Etching this habit into stone means you'll have achieved a major milestone by living within your means.

Live within your means and you'll avoid credit card debt at ridiculous interest rates. You'll also be able to put aside a stash of emergency cash, which can come in quite handy should calamity strike. And you'll be able to save for retirement, a vacation, or any other major goal.

You can even build up a fine portfolio of stocks with small investments if you just keep working at it. Investors who slowly purchased certain stocks over the last decade could have built a small fortune. As my Foolish colleague Dave Mock highlights, Citigroup (NYSE: C), General Electric (NYSE: GE), and Wal-Mart (NYSE: WMT) have respectively returned 14.2%, 15.9%, and 26.6% annually over the last three decades. He also points out that you can also make the most of your few investing dollars by investing when good companies hit a rough patch.

What's important is that you establish the habit. Once you've done that, you'll be on the winning side of the financial equation. Then you can tinker with the amounts to achieve your goals. But you can't do that until you've learned to at least put a penny of your paycheck away for good.

I may have made financial security sound deceptively easy, but it's not. There's a reason many of us struggle to establish these habits and follow them every day. That's because life gets in the way. It's hard enough to work all day, get the kids to soccer and ballet, and then remember your spouse's birthday and your wedding anniversary in time to get a card. Who has enough space left in their brains for remembering when the gas bill comes due?

If you can find some space in your busy life to nail down these two habits, you'll be happier and richer for it.

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