Rising costs are hitting families hard across the country, with many struggling to make ends meet as bills pile up and wages fail to keep pace. While some people seem to weather every financial storm with ease, others find themselves constantly stressed about money, living paycheck to paycheck despite earning decent incomes.
The difference often comes down to specific habits that financially secure people practice without thinking. Fred Harrington, an investment expert at Vetted Prop Firms, a trusted platform helping traders navigate proprietary trading firms, has identified the key behaviours that separate those who stay financially stable from those who struggle.
“The people who never seem to worry about money aren’t necessarily earning more than everyone else,” explains Harrington. “They’ve simply developed habits that protect them from financial shocks and help them build wealth steadily over time.”
Below, Harrington breaks down the six money habits that frugal people never abandon, no matter how tempting it might be to splurge.
- They Always Pay Themselves First
The most successful savers treat their future selves like their most important bill. Before paying rent, groceries, or any other expense, they automatically move money into savings the moment their paycheck arrives.
This habit works because it removes the temptation to spend money that should be saved. When you pay yourself first, you’re forced to live on what’s left, which naturally keeps spending in check. Start with just 10% of your income if money’s tight – even $50 a month adds up to $600 by year’s end.
“Most people save whatever’s left over at the end of the month, which is usually nothing,” says Harrington. “Smart savers flip this around. They save first, then figure out how to live on the rest. It’s amazing how quickly you adapt when you have no choice.”
- They Build Emergency Funds Like Their Life Depends On It
Frugal people sleep well at night because they know unexpected expenses won’t destroy them financially. They prioritise building an emergency fund that covers three to six months of essential expenses before focusing on anything else.
This financial cushion prevents them from going into debt when the car breaks down or they lose their job. Without an emergency fund, every unexpected expense becomes a crisis that can derail years of progress. Start small – even $500 can prevent you from reaching for credit cards when life throws curveballs.
“An emergency fund is the difference between a setback and a catastrophe,” explains Harrington. “I’ve seen too many people with good incomes lose everything because one unexpected expense turned into a debt spiral. Three months of expenses in the bank changes everything.”
- They Track Every Penny Without Obsessing
Successful money managers know exactly where their cash goes, but they don’t spend hours agonising over every purchase. They use simple systems – whether it’s a basic app, spreadsheet, or even notebook – to monitor spending patterns.
This awareness helps them spot money leaks before they become problems. Maybe they’re spending $80 monthly on coffee shops without realising it, or subscription services are quietly draining $200 from their account. Once you see the numbers, making adjustments becomes obvious.
“You can’t manage what you don’t measure,” explains Harrington. “People are often shocked when they first track their spending. That daily coffee and pastry can easily cost $150 a month – money that could be building wealth instead.”
- They Resist Lifestyle Inflation At Every Turn
When frugal people get pay rises or bonuses, they don’t immediately upgrade their lifestyle. Instead of moving to a fancier apartment or buying a newer car, they maintain their current living standards and save the extra income.
This habit is powerful because lifestyle inflation is incredibly difficult to reverse. It’s much easier to avoid upgrading in the first place than to downgrade later. When you resist the urge to spend every extra pound you earn, your wealth grows exponentially over time.
“Lifestyle inflation is wealth’s biggest enemy,” warns Harrington. “Every time your expenses grow to match your income, you’re essentially giving yourself a pay cut. The people who get rich are those who live like they’re still earning their first salary, even when they’re making much more.”
- They Shop With Lists And Stick To Them
Impulse purchases are wealth killers, and frugal people know this. They never shop without a list, whether they’re buying groceries, clothes, or household items. More importantly, they have the discipline to stick to their lists.
This simple habit prevents emotional spending and ensures they only buy what they actually need. Shopping lists also help resist marketing tricks designed to make you spend more than planned. Stores strategically place tempting items at eye level and near checkout counters for good reason.
“Retailers spend millions studying how to get you to spend your money,” notes Harrington. “A simple shopping list is your best defence against their psychological tactics. It keeps you focused on needs versus wants.”
- They Automate Everything Possible
The most financially successful people remove human error and temptation from money management by automating key processes. They set up automatic transfers to savings accounts, automatic bill payments, and automatic investment contributions.
Automation ensures important financial tasks happen consistently, even when life gets busy or willpower weakens. You can’t forget to save money if it happens automatically, and you can’t accidentally spend your bill money if it’s already been transferred.
“Automation is like having a financial assistant who never takes a day off,” says Harrington. “Set it up once and your money management runs itself. It’s the lazy person’s guide to wealth building – and it works better than relying on willpower alone.”
Fred Harrington, investment expert at Vetted Prop Firms, commented:
“The difference between people who build wealth and those who struggle financially isn’t necessarily how much money they earn, but how they develop the right habits early and stick to them consistently. These six practices might seem simple, but they’re incredibly powerful when combined.
“What most people don’t realise is that small daily choices compound over time. Skipping one coffee might save you $3, but doing it consistently for a year saves $1,000. That’s the deposit for an emergency fund right there. The wealthy understand this compound effect and use it to their advantage.
“I’ve worked with traders who earn six figures but live paycheck to paycheck because they never learned these basics. Meanwhile, I know people earning modest incomes who retire comfortably because they mastered these fundamental habits. It’s about consistency, not perfection. Start with just one habit, master it, then add another. Within a year, your entire financial picture can transform.”
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