George Kamel - 7 Money Habits to Master Before Your 40s

Episode Date: September 22, 2023

Today we are talking about 7 money habits to master before the age of 40. Even if you haven’t been very good with money in the past, you still have some time to catch up, and you may even have a shot at retiring a millionaire if you establish some good money habits now! Links: Budgeting for Beginners Investing for Beginners Investment Calculator EveryDollar Budget Deal: I love a good deal, when you sign up using this link , I’ll hook you up with a 14-day free trial and $15 off your first year of the premium version of EveryDollar. Learn more about your ad choices. Visit megaphone.fm/adchoices

What's up future millionaires, George Camel here, and today we're talking about habits. Habits account for about 40% of our behaviors on any given day, which is almost 41%. You don't say. And guess what? That includes your money. The habits you form today have a major impact on your tomorrow. And that's why in today's episode, we are covering the seven money habits you need to master before the age of 40.

Where'd you get that number? Out of my butt. Here's the reason. When you hit 40, you still have at least 20 years until you reach a number. normal retirement. And those 20 or 30 years will likely be when your income is the highest. So even if you haven't been very good with money in the past, you still have some time to catch up and you may even have a shot to retire a millionaire if you establish some of these good money habits. So what exactly are those money habits? Well, I'll tell you, but first,

let's establish a real easy habit of clicking the like and share buttons on this video. And if you haven't subscribed yet, that's what we call a bad habit. Stop it. Let's fix that right now. Easy fix. Hit the button. Move on with your life. Let's go. Just do it. All right, let's get to it. Habit number one is budgeting. No surprise coming from me, but I seriously can't stress enough how big of a deal this is. When you learn how to make a budget and actually do it every month, you're giving your money purpose. You're taking control. You're giving every dollar a job. You're telling your money where to go instead of wondering where it went. And a lot of people get turned off by the word budget because they think of it as restricting their spending and holding them back.

But here's the big secret. A budget actually gives you freedom to spend. In fact, according to Tom Stanley's book, The Millionaire Next Door, most millionaires do a budget. You would think they have all the money in the world. What do they need to budget for? Because they want to keep the money. That's how they got there. That's how they're going to stay there. And so when you think about a budget, think of it this way.

It's an intentional spending plan. It's spending on purpose instead of willy-nilly. Newsflash, we're deeply in debt. And being intentional with your money, month after month, year after year, is one of the keys to building wealth. And even at 40 years old, it's not too late to get started. And if you want more info on how to create a budget, check out my video called budgeting for beginners.

I worked really hard on it. It would mean a lot if you watched it. Habit number two, living on less than you make. In other words, your income should be higher than your expenses. Duh. When you're spending more money than you make, that's not a good thing. Now, this should go without saying, but you know how people are. There's a lot of things out there that should go without saying.

Like, this sign from Arby's. Like, who parked inside to where someone was like, guys, we got to make a sign. This is getting out of control with people trying to park in here. Or this sign from a pool. Behind every sign, there's a backstory, and I don't want to know what happened there. Somebody pooped in the pool. So if you're 40 years old and you're buying things you can't afford,

there's a good chance you're stuck in a cycle of consumer debt, which is literally the opposite of living on less than you make. So if you have debt, get rid of it as quickly as possible, because it's going to be real hard to build wealth when huge chunks of your income are going to lenders every single month. So how do you make sure you're not spending more than you're making? By tracking your expenses. It's that simple and it's that hard.

You see, having a budget is great, but if you're not tracking your expenses, it's about as worthless as the G in lasagna. What are we doing with the G? Italians. All right, you're just trying to throw us off? C, uh, C, uh, correct though. Now, I personally do this with an app called Every Dollar.

And with the premium version, you can connect to your bank so that transactions automatically appear and you simply drag and drop them into the appropriate budget categories. That makes it easy to track your expenses while you're waiting on your next meeting, waiting at the doctor's office, or waiting on the world to change. It's not going to. And here's the deal. You probably already have a habit of pulling out your phone when you're bored or have a couple of free minutes. So you may as well use it for something productive that's going to help you out financially.

Now, if you want to check out every dollar, I'll drop a link below where you can get started for free. Habit number three, being generous. Now, I always tell people to give 10% of your income, no matter where you are on your financial journey, even when you have debt. Because here's the deal. If you hold everything with a closed fist

and you're always trying to make your bank account bigger to protect yourself, that is a miserable and exhausting experience. And if you want to be a generous person, there's no better time than the present to get started. So if you say, when I have this much, then I'll be more generous. Well, the truth is you want. Why?

Because you haven't built the habit. So if you're 40, don't wait until you're 50 or 60 to start being generous. Start now. And a side note, generosity doesn't always have to be monetary. You can be generous with your time, your talent, and other resources too. But if you want to give financially and don't have the margin for it, go back to that habit of budgeting because it will help you find and create that margin. So when you're focused on getting out of debt and building an emergency fund,

you're giving might look like tithes to your local church or monthly donations to a charity with some occasional extra gifts here and there. Then when you have zero consumer debt and a fully funded emergency fund, you can start giving even more. And then by the time you hit Baby Step 7 of the Ramsey Baby Steps, which means you don't have a payment in the world, your house is paid for, you can go absolutely bananas with generosity. Now, there are all kinds of ways you can be generous. It can be planned, like a monthly donation to your favorite charity, it can be spontaneous, like a hashtag tip the bill challenge to an awesome server, or it can be outrageous, like covering car repairs for a single mom. And let's be real, giving is the most fun you'll ever have with money.

There's a reason we all cry when we see those random acts of generosity on TikTok or Instagram. So make it a habit now. Set aside the money, create a line item in your budget, and make it a priority before you go spend it on tequitos at your gas station. Side note, that's a bad habit financially and digestively. Ask Caleb Hammer. He'll tell you. Ramen tequitos and Uberitz! Not a pitch for his merch, but it's...

I want one. Caleb, send me a mug. And down the road, you'll continue giving, but it'll be on a larger scale. And as my friend Rachel Cruz says, give a little... until you can give a lot. Thanks for giving us that quote, Rachel. She's so generous. Habit number four, setting money goals.

If you want to make progress with your money, you need to set some financial goals. And this doesn't have to be a big, complicated thing. I'm talking about having a plan for what your money's going to do for you. Now, this could be something big, like retiring with $2 million, awesome goal. Or something small, like saving up $1,000 starter emergency fund.

Also a great goal. But you've got to have something you're aiming for. Because as the great motivator, Zig Zig Zigler said, if you aim at nothing, you'll hit it every time. Or here's a lesser non-quote. Shoot for the moon. And even if you miss, at least you own Twitter or X or whatever it's called this week. And if you're 40, you can still set some pretty ambitious money goals and expect to reach them.

But here's what you need to do. Make sure your goals are specific, measurable, and have a deadline so that you can periodically check in with yourself and see how you're doing. For example, a bad goal is save more money. A better goal is to save up $1,000 by December 31st so you can buy $621,000. hot dog combos from Costco for your New Year's bash. Yes, a strange goal, but it's specific, measurable, and it has a deadline. I mean, how else am I going to compete with Ryan Seacrest's New Year's Rock and Eve? 621 hot dog combos.

That's how I'm going to compete, Ryan. Now that's a lot of damage! Another component of goal setting is to make sure that it's your goals. If you're chasing someone else's hot dog dreams, you're probably not going to keep going when things get tough. And things are going to get tough with that hot dog dream. There's going to be a lot of obstacles in your way. Now lastly, make sure you write these goals down.

and put them in a place where you'll see them a lot, like on your mirror in your bathroom, your wallpaper on your phone, or on the bathroom stall at Taco Bell. You're there a lot, and it's a problem in a lot of ways, and we're worried about you. So make setting money goals a habit consistently check in on your progress, and your future self will be glad you did.

Habit number five, sleeping on big money decisions. Now, some people call this the 24-hour rule. Basically, it's a good idea to wait 24 hours before making a big financial decision. And I know, you would think by the age of 40, you'd be a little better impulse control. but you're still human. So maybe wait a day before you drop $96,000 on that 2023 Ford Super Duty Limited.

The reasoning behind this is that emotions have a huge part to play in overspending. And simply waiting a little while can help you determine what's necessary and what's not. So take the time to think about whether this purchase is a need, if it's a want, or it's something that can just wait until later, or maybe never. It's probably better. If you make this a habit to pause before spending, you're going to save yourself a lot of money and a whole lot of money. a ragrats.

You have no regrets? No regrets. Not one? No regerts, no ragrats. Like not even a single letter? I don't want to hear it. Habit number six. Talking about money with your spouse.

You know, for a lot of people, talking about money usually means fighting about money. And maybe one of you has debt and the other doesn't, and there's some resentment there. Maybe one of you makes a lot more money than the other, and there's some bitterness you need to work through. Or maybe one of you, just for once, wants to splurge a little on the pizza-flavored Pringles, but the other insists on the slightly cheaper off-brand, prongles. Pongles. I don't want it. Whatever it is, you need to talk about it. Be open and be honest.

Because when you get married, there's no more your money and my money. It's our money. Wee, we speak French now. Aton, attend, tant, ton, ton, ton, ton. You should share a bank account and be budgeting together every month. And if you're doing this, you're going to naturally talk about money on the reg. So hopefully you're doing this before you turn 40, but if not, now's the time to start. Don't forget the fun part.

Remember earlier when we talked about money goals? Well, if you're married, share your money dreams with you. each other and set those goals together. Maybe you want to take the kids to Disney next year. Maybe you want to move to a new house. Maybe you want to build a movie quality replica of the Ironman suit to wear the Comic Con next year. Hey, no judgment here.

You do you. It is so important to have a shared vision and goals with your spouse. You're going to have a much better shot at reaching your money goals when you're doing this stuff together. So make it a habit of talking openly and often about money with your spouse. It's a great way to strengthen your relationship and improve your financial situation. Habit number seven, investing consistently. This is another big one.

you should be setting aside a portion of your paycheck every month for investing. I recommend investing 15% of your income in tax advantage retirement accounts, like your company 401k or a Roth IRA. And if you start early enough and you make a habit of investing 15% every month, you can retire a millionaire. And if you're 40 and just getting started, don't freak out. You've still got time to grow your money. You may just want to up the amount you invest every month if you need time to catch up.

Now, there's a right time to start investing, and that is when you're out of debt with a fully funded emergency fund. So if you're not there yet, maybe get to the habit of that first, then we can get to investing. And the cool thing about this habit is that it's easy to stick to because you can automate it. I just set 15% to go out of my paycheck to retirement every month and I don't even think about it. And my friend Brian Preston from The Money Guy Show recently talked about this on my YouTube channel, and he's a big fan of automatic investing. Because when I asked him for his best money advice, his answer was simple and profound.

Make the good habits easy and the bad habits hard. And if you do this, wealth will be inevitable. Much like Thanos, but with less world destruction. So if you're just getting started investing, check out my video called Investing for Beginners. I'll drop a link below. All right, those are the seven money habits to master before the age of 40 if you want to build wealth

and do it the right way. If you can master these habits earlier in life, even better. That's just more time to let your money grow. And I love this quote from John Maxwell. A dream becomes a reality as a result of your actions and your actions are controlled to a large extent by your habits. So there you go. If you have a dream of becoming a mill,

set yourself up for success by establishing some good money habits that make building wealth inevitable. Now let me know in the comments if there's any money habits you would add to this list. And as always, make sure to subscribe to the channel, like this video, and share it with all of your friends who need some better money habits. Especially the ones who are always spending a ton of money buying things they don't need. Looking at you, Elon, not Elon Musk. Not you Elon Musk, it's a different Elon if you're watching this. A lot of Elon's in my life. What can I say? Thanks for watching. We'll see you guys next time. Thank you.