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- Self-made millionaires check their budget regularly and keep living expenses lower than income.
- They're more interested in preserving wealth through low-risk investments than growing it.
- Millionaires move on quickly from money mistakes, taking important lessons to their next venture.
- Read more stories from Personal Finance Insider.
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Millionaires aren't made overnight.
Some self-made millionaires started out making expensive mistakes that negatively impacted their financial health — just like anyone else. And they might be moving larger sums from one account to another, but many of us can probably learn a thing or two from their ability to maintain a high net worth.
Here are five money habits that help millionaires stay wealthy, according to financial planners and advisors who know firsthand.
1. Many millionaires avoid lifestyle creep
Kenny Senour, CFP at Millennial Wealth Management says that most wealthy people avoid "lifestyle creep," the slow but steady creep of spending more money on luxury items that then become essential to your lifestyle as your income increases.
"Self-made millionaires typically buy used cars with cash and hold onto them as long as possible," says Senour. Before splurging on luxury cars, Senour says wealthy people prioritize getting good health insurance and building an emergency savings fund. An emergency savings fund is an easily accessible cash reserve, typically kept in a high-yield savings account, to cover expenses for 3-6 months in case you have an emergency like losing your job.
2. They prioritize paying down their debts
Childfree wealth specialist Jay Zigmont, CFP, Ph.D. says that millionaires prioritize being free of high-interest debt as soon as they possibly can. "Debt is not a part of their life," he says. "They may have credit cards, but they don't carry a balance."
Zigmont says millionaires avoid credit card debt altogether. "Rather than paying 16% or more in interest to a bank, they are investing in themselves and their future," explains Zigmont. "Some millionaires do use credit cards, but they rarely keep a balance to avoid paying interest."
3. They check on their money regularly
Zigmont also says that millionaires live within their budget, with a clear understanding of what they can and can't spend money on. Checking their money on a regular basis helps them prioritize the most important spending categories and saving money by avoiding buying things they don't actually need.
Financial advisor and certified divorce financial analyst Laurie Itkin at Coastwise Capital also says that millionaires check their net worth every month. They assess which income streams are working well, and do more of that. "If their net worth has declined from the previous month, they figure out exactly why," says Itkin. Millionaires typically stay focused on solutions by analyzing their own income and spending trends.
4. They're more interested in preserving wealth than growing wealth
Dr. Guy Baker, CFP, Ph.D., founder of Wealth Teams Alliance, says millionaires are more interested in preserving capital than they are in growing it. "They invest in equities and debt that are low risk with a high probability of reasonable income," says Baker. "They become much more focused on whether they are going to get their capital back than doubling it or tripling it in the next 10 years."
Many self-made millionaires are more likely to invest in business ventures or growth opportunities that they already know, instead of taking big risks on something they haven't studied yet.
5. Millionaires don't dwell on their money mistakes
Most millionaires have made tons of money mistakes, "big and small," that negatively impacted their wealth, says financial advisor Hannah Whatley, CFP, AIF of the wealth and retirement firm Rather & Kittrell. "However, they know that the mistake does not define them or their ability to grow their wealth, and they move on. Millionaires understand that consistency does not require perfection."
Whatley uses an analogy of falling off a diet to explain how millionaires think. "You can't change what you already had for breakfast," she says. "Many millionaires share the sentiment of fail fast and move forward."
Leo Aquino (they/them) was a Spending & Saving Reporter. Before joining the Insider team, they covered relationships, sexual wellness, beauty, fashion and more, always uplifting stories of BIPOC and LGBTQ+ communities. In 2022, Leo won The Curve Award for Emerging LGBTQ+ Journalists, presented by the NLGJA.
