Wise money management can be the difference between a successful future and a floundering one. While many people consider money management a process or a bit of knowledge, I consider money management something as simple as habits. Even someone that knows the benefits of saving and investing will sometimes pick buying a new car. Just learning something new will not change your life. You need to learn to apply it consistently. The only way to do that and enjoy it is to make it a habit. Wise money management is not just knowing what is right, it’s habitually doing what is right. Develop these following habits. Once they’re developed, proper money management will never be an issue again.

Quality not Luxury

Don’t pick based on luxury. Pick based on quality. Buying a top of the line Lamborgini is usually not a wise money management decision. While a Lamborgini might be quality, it can't justify the price. That means it is luxury. The only exception is if you are really really rich. Otherwise, it’s just foolish. Most people can agree with that. Everyone makes mistakes about buying luxury. What are some of the luxuries you buy? Even something like name brand cereal can be a luxury. At the same time, buying junk is not a good idea either. When you’re buying a car, occasionally, some frugal person will get caught buying the two thousand dollar lemon. Buying a quality used car is the better option. The extra risk of buying a ridiculously cheap car ruins any potential value. Buy quality. Luxury does not mean quality.

Insure What You Can't Live Without

Insure what you can’t afford to lose. Everyone should have some kind of insurance. If you can’t afford to lose something then you need to ensure it. At the very least, everyone should have a high deductible health insurance plan. This does not mean to insure everything. Insurance companies make more money off the little things. If you can buy a new ATV or boat and don’t have a payment then you don’t need to insure it more than the law requires. That goes with absolutely anything. You’ll save money and the other insurance policies will seem that more valuable.

Save then Invest

Save but don’t hoard money. Money sitting in a bank account can be comforting. It’s good to have three to six months of expenses in savings. Anything more than that get excessive. A security net is good but if you have more than six months of expenses saved then it’s time to invest more of your money. Investing can be as simple as using a mutual fund or ETF or as complicated as trading options. Just do something. Doing nothing will let your money's value drop with inflation and not teach you a thing.


With these wise money management habits you’ll be able to put yourself anywhere you want in life. Just know that doing nothing is the biggest problem. Wise money management isn’t about new tips and tricks for making or saving millions of dollars. It’s about habits. Doing the right thing day after day will put you in a position to do whatever you want with your life and time. Isn’t that what wise money management is all about?