Daily habits like showing up to work on time, eating right and working out are a path to personal well-being. Similarly, good money habits pave the road to wealth and financial health.
Think about the unassuming millionaire next door or 401(k) savers who hit the magic $1 million number. Consider supersavers who retire at 50. What is it about the way these people manage and think about money?
To find out, IBD asked financial advisors what habits clients who earn A+ grades in personal finance have. Below are money habits that pay off over the long haul.
1. Commit To Regular Saving
There's a reason the adage "a penny saved is a penny earned" gets so much airtime. Unless you're a trust-fund baby or inherit a large sum of money, it's hard to build lasting wealth without habitual, regular saving, says Jason Grover, founder and financial planning specialist at Grover Financial Services.
Having a saver mentality is a prerequisite for building wealth. "When I think of supersavers and the millionaire next door (type of person), one habit comes to mind: They have a consistent saving philosophy," said Grover. "Saving is automatic."
2. Pay Yourself First
Don't treat your paycheck as mad money or just a pool of money to pay bills. The first thing you should do after your employer pays you is to pay yourself, says George McFarlane, president and financial advisor at 7 Waters Advisors.
Ideally, you'll want to put your savings on autopilot. Take money automatically out of your paycheck and put it into a retirement savings account or other type of savings account. And if you get a raise at work, save a chunk of the added income.
"Every time you get a raise, you can actually give your retirement account a raise," said McFarlane. Say you get a 4% raise; make sure you divert at least half of that wage increase to your 401(k).
The clients most prepared for retirement are those that saved no matter what the market was doing, says McFarlane. "They didn't wait for some big market event to happen or look for just the right time," said McFarlane. "They just made it a priority that a portion of every single check that they got was going into savings for their retirement."
3. Control Spending
Among the laundry list of bad money habits, overspending is near the top of the list. Impulse spending and trying to keep up with the Joneses are more likely to mire you in debt than make you financially secure. It's hard to free up cash to save when you're still paying off debt.
"It's not how much money you have, it's how much you spend," said Grover. "I've had clients on Social Security that have been able to retire with $250,000 in the bank because they have kept spending under control. I also have people with $2.5 million who aren't even thinking about retirement because of their poor spending habits."
4. Create A Budget And Stick To It
It sounds so basic, but not having a budget likely means you haven't a clue as to where your money is going. Where it probably isn't going is your 401(k). "If you're not paying attention to your money, it just disappears," said Grover.
Part of adhering to a budget is getting in the habit of paying off high-rate credit cards in full every month to avoid interest from eating cash flow.
5. Take A Long-Term Approach To Retirement Savings
Accumulating a million-dollar nest egg doesn't happen overnight. Reaching that seven-figure account balance milestone requires years of disciplined saving and investing, says Mike Shamrell, vice president of workplace thought leadership at Fidelity Investments.
The average investor on Fidelity's 401(k) platform with $1 million in savings has been saving for 26 years, says Shamrell. "They understand that saving for retirement is a marathon, not a sprint," said Shamrell.
And the more you save, the better. Fidelity's 401(k) millionaires, it turns out, save at an above-average rate. The average employee contribution rate for people with $1 million is around 18%, which is higher than the record 14.3% savings rate for Fidelity 401(k) plan participants in this year's first quarter, Shamrell says. What's more, nearly half (45%) of these 401(k) millionaires are making catch-up contributions. For 2025, the catch-up rate for plan participants 50 or over in 2025 is $7,500.
6. Don't Be Afraid To Invest In Stocks
The higher the return you earn on your money, the more wealth you can build over time, thanks to the magic of compounding.
The Fidelity 500 Index fund (FXAIX) has posted a 13.5% average annual total return over the past 10 years, says Morningstar. That double-digit gain tops less volatile investments like bonds and cash by a wide margin. Investing in a healthy helping of stocks regularly is what historically has turbocharged portfolios. The average equity exposure for people with $1 million in retirement savings on Fidelity's platform is about 78%, says Shamrell.
And 401(k) savers who dollar-cost average, or make equal deposits to their retirement accounts every payday, should also get in the habit of looking at the number of shares they are buying when the market turns down, and not their account balance, Grover says.
"When the markets are doing well, people who dollar-cost average are buying thimbles full of shares of great companies, and when the markets are doing horrible, you're buying buckets full of shares," said Grover.
7. Invest In Appreciating Assets
Building wealth is about asset appreciation. So, get into the habit of funneling your hard-earned dollars into investments with the potential to appreciate in value, such as stocks and real estate, rather than assets that depreciate the second you buy them, like cars, says Rob Williams, managing director of financial planning at Charles Schwab.
And, if there is such a thing as good debt, Williams says taking out a mortgage on a home is a way to grow wealth over time for homeowners as real estate typically appreciates over time.
"There are forms of debt that actually can be constructive, such as a mortgage," said Williams. "When you buy a home, you're paying down the principal. And that's a form of savings as you're building up equity in your home."
8. Take Advantage Of Company Matching Contributions
When your employer chips in money to your retirement account through matching contributions, take advantage of that free money, McFarlane says. That means making sure you save enough in your 401(k) to earn the full match.
"Make full use of the match," said McFarlane. "So, if they start matching only after you save 5% of your pay, then you need to put at least 5% into your account."
9. Live Below Your Means
Sure, it's nice to have a second home, take a trip to Europe every year and have a Rolls-Royce in the driveway. But if it's busting your budget and straining your checkbook, it's a sign you're living a life you can't really afford.
Instead, try to match your lifestyle to your income — not the pay package of a CEO.
"It's important to live below your means so you're not stressing your cash flow to the point that you can't invest, and you can't grow your future," said McFarlane. "Put your money into your retirement account and earn interest on that money rather than giving the money to someone else (such as a credit card company) and pay them interest."
Adds Grover: "I encourage people to live a lifestyle than they can afford and that they can maintain for the rest of their lives."
10. Save No Matter How Small The Dollar Amount
Any money you save today, even if it's just $100, is the first baby step toward building a nest egg for the future, says Williams. "Get in the habit of taking ownership of your financial life," said Williams. "It's a mindset. It can be as simple as just starting to save and investing small amounts if you need to. We've seen that taking action to save and invest consistently over time is one of the best paths to financial independence for Americans."
