5 Daily Habits Middle-Class Americans Use To Build Six-Figure Wealth
Written by
Nicole Symon
Edited by
Molly Sullivan
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Growing your money can seem overwhelming at first, but building six-figure wealth isn’t out of reach. The right daily habits will set you up for success and get you closer to your goal, little by little.
Try incorporating these habits that many middle-class Americans are already using to build six-figure wealth.
1. Make a Budget
Creating a budget can help keep you on track to reach your financial goals. Make a budget that outlines all the money you earn in an average month and how much you typically spend during that time.
Fixed expenses — like your rent or mortgage payment, insurance premiums and subscriptions — stay the same every month, so they’re easier to add to your budget. For variable expenses like fuel, groceries, utilities, healthcare and personal care items, you’ll have to estimate how much you spend.
Create spending categories and set limits to keep your expenditures in line with your income. Make sure there’s some wiggle room to account for minor unexpected expenses.
2. Build an Emergency Fund
While a budget is essential, it won’t account for significant unexpected expenses, like home or car repairs or emergency medical bills. Around 37% of Americans would not be able to pay a $400 unexpected expense in cash.
An emergency fund will help ensure that you have enough money to cover those bills. Otherwise, you may be left with no better options than taking out high-interest loans or maxing out credit cards to pay for emergency expenses.
As you’re building your emergency fund, start with a small goal like saving $100 a month — or whatever you can afford to get the ball rolling. Keep adding to the fund whenever you can and only withdraw money for true emergency expenses. In the long term, try to save three to six months of living expenses in your emergency fund so you know you’re fully covered.
3. Wait To Make Nonessential Purchases
Throughout the day, you’ll find many opportunities to spend money without thinking about it. You’ll see ads on Instagram, promotional emails, billboards and numerous other forms of marketing trying to get you to buy things you probably don’t need.
The solution isn’t restricting yourself to buying only the absolute essentials to cut costs, though. That’s unrealistic and likely to backfire. Instead, if you’re tempted to buy something fun, like a new sweater or video game, just wait. Check your budget and wait at least a day before buying it. After the waiting period ends, you can buy the item if you still want it and it fits in your budget. This slight delay can help eliminate many impulse purchases, which cost the average consumer nearly $300 per month.
4. Add New Income Streams
When you boil it down, building wealth comes down to earning more than you spend so that you have enough left over to save and invest. So, you can either earn more, spend less or do both to fast-track your wealth-building.
If you have some extra time, consider adding new income streams beyond your primary job. Gig work is one option, such as driving for Uber or delivering food with DoorDash. Selling crafts or items you no longer use is another option. People hire freelancers for everything from graphic design to app development, too. Depending on your interests and availability, there are lots of flexible options to earn supplemental income.
5. Invest
No matter how many hours you work, there’s a limit to how much you can earn. The key to growing your wealth long term is making your money work for you even when you aren’t working. When you invest, your money can grow while you’re sleeping, eating or just enjoying yourself.
You don’t need thousands of dollars to start investing, either. Many brokerages have no minimum investment requirement, so you can get started with any amount of money. Starting now gives your money more time to grow thanks to the power of compounding returns. As your investment earns returns, you can reinvest this money to generate even more money.
Just remember that all investments come with risks. Weigh them against potential returns and choose your investments carefully.
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