I hear people giving financial advice all the time. Most of them aren't rich. 

Those who are rich would disagree with what many charlatans preach. The other day, I came across an article proclaiming, "Skip your lunch, don't buy expensive coffee, cut your hair less often." This is a horrendous way to live your life and it promotes poverty. It's smart to be thrifty, but you don't want to be cheap. You should never do anything that will deprive you from your joy.

I promote prosperity — and taking away these simple pleasures will not make you rich. It will drive you to be more frustrated from these unrealistic disciplines. Most of these hypocrites who profess these antics haven't even made it financially. They just sit at a keyboard in a delusional manner, waiting for a payday that often never happens.

Financial advice is freely given by most people, but most of it is horrible. Therefore, watch whom you learn from, for it is in your best interest (pun intended).

If you're naturally a hard worker with a great career and have been diligent in all your affairs, you can have prosperity now. However, you might be asking, "Why haven't I made it yet?" The answer to this question is in the way you think, feel, and act toward your money. Making better choices with your money can turn your life around.

There are certain financial mistakes that rich people never make. The journey in becoming rich will require you to make a few mental changes in your behaviors. Once you make these adjustments, you will begin to see the progress as your create more positive results in your life. Acquiring wealth is a great goal, but who you become in the process is even more worthwhile.

Here are 10 financial mistakes rich people never make:

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1. Not investing in yourself.

America's first millionaire, Benjamin Franklin, was known for saying, "An investment in yourself pays the best interest." Often, people depend on their employers to buy them books, send them to seminars, or provide them with coaching. However, you must take your education into your own hands if you want to prosper. Invest in yourself.

Related: 7 Networking Tips From a Real Millionaire

2. Over-entertainment.

Yesterday, I popped into a local Dave and Buster's to see the grand opening. It was crowded with hundreds of young adults (ages 21-35) who were wasting precious time and money. Most people spend 30-50 percent of their paychecks on entertainment, while they temporarily escape the realities of life. Instead, rich people use that time and money to fund their dreams.

Getty Images / Mark Metcalfe

3. Buying on credit.

Many people purchase objects they can't afford with money they don't have to impress people they don't like. This tragedy decimates many people, leaving them with a hopeless feeling when they repay their high-interest loans. If a person hopes to become rich, they will use their credit cards for growing and promoting their business, not funding personal expenditures.

4. Hiding from your spouse.

Millions of married couples don't talk about money. It makes them uncomfortable, which sometimes leads to arguments. However, you cannot get rich unless you disclose your financial precepts with your spouse. Money is only multiplied when love is in the mix and both members of the household have a clear understanding about their finances.

5. Mortgaging a home.

Some "rich" people mortgage their homes, but they aren't really rich. Mortgaging your home leads to an endless battle of re-financing, bill-paying, and inflation. When you mortgage a home, you're likely to pay twice as much as the original price! Rich people rent until they can buy their house with straight cash, like I did.

6. Traditional retirements.

Our retirement system is a joke that must be evaded by those who want to become rich. If you're depending on mutual funds, 401(k), and certain life-insurance policies, you'll do better boarding the Titanic. Plus, if you're saving money to enjoy it for your sixties, that's like saving up sex for retirement! Instead, build your fortune while you are young. 

Related: 10 Questions Every Aspiring Millionaire Should Ask

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7. Buying inferior goods.

Price shoppers and coupon clippers will hate this, but when you buy shoddy goods, you get shoddy results. If you live by the price, you die by the price. Instead of buying what is "cheap," buy the best goods that are available. Rich people know that buying a $40 shirt which will last for four years is better than buying a $10 shirt that must be replaced every year.

8. Lack of enjoyment.

Consumerism is funny. During 50 weeks at work, people think about vacations and when they finally get their two weeks, they only think about work. The truth about becoming rich is that you must enjoy the money that you already have, whether it's $10 or $100. Your money will only expand if you appreciate it and think about how you can enjoy it more. You'll always get more of what you enjoy. 

Your college roommate works at a fancy law firm and just bought a new car to celebrate his promotion. The girls you used to brunch with seem to always have new designer handbags and fresh manis.

From where you’re scrolling, all of your friends are doing really well while you can’t seem to get it together financially.

The truth is, most people have no idea what they’re doing when it comes to money. While everyone’s life may look totally under control from the outside, the numbers tell otherwise. Here is the real truth about your friends’ finances.

1. They are living paycheck to paycheck.

Nearly 80% of full-time workers are living paycheck to paycheck. While unfortunate, this makes sense considering the majority of our country never received a financial education. By the time most of us fully grasp how important it is to save money, we’ve already formed bad habits that make it extremely difficult to do so.

Most of your friends don’t know how to manage their money and have little to no savings. Four in ten of Americans don’t even have enough cash to cover a $400 emergency.

2. They worry about money.

Today In: Money

More than a quarter of millennials say they are stressed about money to the point where it negatively affects their performance at work. On top of that, 23% of millennials say financial stress makes them physically ill on at least a monthly basis.

Both of these numbers are roughly double what the general population experiences. And that’s saying a lot considering money is the leading cause of stress in America. Your friends may act like they have it all together but many of them are freaking out about their finances.

3. They have credit card debt.

FOMO is real and it’s a big cause of credit card debt. In fact, almost 40% of millennials have spent money they didn’t have and gone into debt to keep up with their peers.

The average household that’s carrying credit card debt has a balance of more than $15,000. So if you’re wondering how your friends can afford to live so lavishly, the answer is they can’t.

4. They aren’t saving for retirement.

66% of millennials have absolutely nothing saved for retirement. Which is understandable with student loans, high housing costs, and stagnant wages. It can be really hard to save for something that won’t happen for several decades when you have more pressing expenses to deal with.

Millennials also don’t realize how much they’ll really need to retire. 75% think less than $1 million will allow them to retire comfortably. According to AARP, a retiree needs to save about $1.18 million to live off of $40,000 a year for 30 years. So the majority of millennials are drastically underestimating just how expensive their golden years will be.

If you’re embarrassed that you can’t commit to regular 401(k) contributions, know that you’re not the only one.

5. They have no idea what they’re doing with their money.

Nearly 70% of millennials rate themselves as having a high level of financial knowledge. But when given a basic financial literacy test, only 8% were able to demonstrate a high level of knowledge and only 24% could demonstrate a basic level of knowledge.

So when a friend tells you what you should be doing with your money, think twice about listening to their advice. There’s a good chance that they’re dead wrong.

The bottom line? You’re not as far behind as you think and now is a great time to start managing your money the right way. Regardless of what your friends are doing, you can start making the smart decisions that will get you where you want to be financially.

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“If your only goal is to become rich, you will never achieve it.”

— John D. Rockefeller

The irony of a strong financial life is that you don’t really want it. You want what a strong financial life represents: options.

• the ability to fail and try again someday
• more time, to be spent in personally meaningful ways
• stronger choices for our loved ones, e.g. schools and neighborhoods
• the chance to continue to develop yourself through travel and education

But wealth is a weird thing. Like happiness and success, it can’t be pursued directly. A lot of people try, but they’re never satisfied. Once they make the money they used to think would make them happy, they find something else that’s missing. Often times, it’s just more money. It’s what they know.

Here are some things that people don’t know about money. If you learn them, you’ll have a leg up on how to build your wealth the right way.

By the way, these aren’t things that I created out of thin air. They’re observations of how the natural laws of finance work. You can adapt any or all of them to your current situation with money and increase your chances of achieving the kind of financial state that widens the possibilities in your life.

The question is, are you ready to start financially thriving?

1) Money is worthless by itself

Money is only valuable because it can get you something else you want. It’s never an end goal. It’s meant to touch many hands.

Give it. Invest it. Save it for a rainy day if you don’t have that set aside yet. Support a company or organization that’s meaningful to you. Money was meant to be exchanged.

Don’t hoard it. Use it to connect with others more strongly than you could without.

“Money is like love; it kills slowly and painfully the one who withholds it, and enlivens the other who turns it on his fellow man.”―Khalil Gibran

2) Smart money is slow

The best money managers in the world think slow before an action. Why? Because making better money decisions requires you to take pauses.

You might believe otherwise if you’ve watched movies like Wall Street. But what you’re seeing is speculation, not investing. The best investments take time to play out, don’t hinge on any single event or the success of one product, and are filled with ups and downs in the middle.

Warren Buffett’s slow to get in and even slower to get out.

“Our favorite holding period is forever.” — Warren Buffett

Great money management means first, breaking your old patterns with money like buying too much stuff or going out all the time, and then intentionally deciding on new ways to deal with it. It’s hard.

Let yourself slow down.

3) Making money is boring

We’re only shown the dramatic, instant success stories of finance in the media, precisely because they’re so unusual. You don’t have to fall for it.

For most individuals, making tons of money over a lifetime is like watching paint dry. Success is created and maintained by a thousand moves, all directed toward a long term goal.

You save money bit by bit. You invest it. You receive dividends or income. You re-invest the proceeds, and compound your earnings year after year. It’s no drama.

I wish I could share a story with you about some famous person who became wealthy the boring way. But that would be everyone, so no one writes about it.

4) Money means saying no

Doing nothing is often the right thing to do. There are lots and lots of pretty shiny things begging for your money. Your future is worth more.

Saying no to almost every opportunity to part with your money that comes your way is key to your financial success. Most of us waste what we have.

The only exception to this rule is that you must say “Yes!” with your whole heart to things that truly align with your core values, like supporting your kids’ school if you think they do a great job, or investing in a business you believe in.

The real work comes before the money moves here. It’s important to come to terms with your deepest, truest goals in life, and align your financial actions accordingly.

“Learn to say ‘No’ to the good so you can say ‘Yes’ to the best.” — John C. Maxwell

5) Money must be set up

Your attention is limited. There are only 24 hours a day, and they go fast.

To become truly great at anything, you have to dedicate time and energy to it. If you don’t have the time or interest to study money deeply, you’ll need to get clear on your goals and automate your steps as much as possible.

“Wealth is largely the result of habit.” — John Jacob Astor

Learn the basics. The worst thing would be to automate a process before you truly understand it. Big accidents tend to happen this way. Read the fine print once, then go.

6) Money requires a supportive environment

Even if you’ve learned the basics, gone on to change your habits, and decided which big goals you want your money to support, you’ll fail if you surround yourself with people who don’t support your new financial life.

They’ll tear down what you’ve built up, not because they’re terrible people, but because our environment deeply influences how we feel, think, and behave about everything. We’re social creatures by nature. We want to fit in.

“External triggers come from the environment. Our five senses pick up on them, as well as our minds.” — Marshall Goldsmith

Many of the triggers that undermine our new goals happen in our subconscious, so you won’t necessarily know why you’re having such a hard time making them stick.

Clear the decks if need be. See the friends who blow all their money more sparingly.

Keep your focus on changing your financial life, and trust that you’ll eventually attract awesome people who have similar values.

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The point of money is to magnify you.

If you care about something, you get the opportunity to make more impact. If you love someone, you can give them more of what they need. You can share more. You can contribute more. You can invest in your future more.

You get more options.

Since I shared my report from the three-year mark of my battle against debt, I’ve been amazed at the kind words from so many members of the Man Vs. Debt community. From comments to Twitter messages to emails, it’s really reaffirmed my commitment to pushing forward and – even if it’s more eventually than I’d like – ending up debt-free and staying that way for life.

That said, opening up about my slower-than-expected progress has also forced me to re-evaluate where I am, and whether what I’m doing is really in keeping with my truest desires financially and personally.

As I was preparing to write today’s Man Vs. Debt post, I kept finding myself drawn to a post of Baker’s from several years ago, Discovering Your Financial Priorities. I hope you’ll make time to read that, because it’s really the basis for what I’d like to do – and challenge you to do – today.

I need to refocus on what matters most to me. I’m making progress, but sometimes it’s not in the areas that really hit home with me. I’m hustling for extra money, but that cash is just going toward the bills and odds and ends of needs here and there, not really packing the punch I’d like.

I’m doing the right things, but not quite with the right mindset. And from the comments I’ve received since admitting how much I’m struggling, I know that I’m not alone in feeling a little adrift.

So let’s take the first step toward changing that. Let’s set some financial priorities, Man Vs. Debt-style. I’ll list mine, and I hope you’ll be thinking about your own so you can jump in and share in the comments!

1. Keep the bills caught up.

This has not been a problem in years for me, and I’m more happy about that than I can say. HOWEVER. I’ve been there, the juggling-late-bills dance, and I need to be sure not to forget how awful that felt. I need to make sure that this stays an articulated priority, so that I don’t get back to the really behind point. For us, this means not only having enough money to cover our regular expenses, but also having a decent buffer in the checking account for when “paydays” – sometimes irregular in freelancing – don’t line up with due dates.

2. Provide for needs and moderate wants for my family.

For us, most of this comes by way of food. I will tell you flat-out that we spend more on groceries than we “need” to. My husband, Chris, is a vegetarian; I have several food allergies; and we have other dietary considerations for other family members. Some of these are needs, while others are just preferences, but they’re preferences that are my personal priority to meet. This also stretches to include things like our Netflix subscription, occasional restaurant meals and movies, trips to the arcade, and so on. They’re wants – not large-scale ones like a 90-inch TV, but moderate ones that we value enough to include in our budget. Our house is another related area. It’s not the tiniest, but it works for our not-the-tiniest collection of humans and pets, and it’s a priority in our budget to keep it.

3. Have all the healthcare.

I don’t have much to say about this, except that I took a full-time job that pays LESS than I was making freelancing full-time so that I could have health insurance. It’s a priority for me. This also extends out from the needs/moderate wants category; for instance, I choose to spend a relatively small but not insignificant amount of money on fitness, because it’s important to my overall health and well-being.

4. Maintain an emergency fund.

In the past six months, this fund has meant the difference between “yes, we can afford to live in our house” and “no, we really can’t.” It’s vital. And we’ve managed to replenish it every time we’ve knocked it down in the past few years, which is amazing. But it needs to remain a priority that I remind myself of, because it sometimes feels like it’d be so easy to use that cash for something else.

5. Pay down debt and avoid new debt.

Interestingly, when I think about my real feelings about debt, I realize that fifth place is just the right spot on my priority list. It is a priority – but it isn’t THE TOP priority. I sincerely want to become debt-free, and I intend to stay that way for life. At the same time, there are tradeoffs I know I would make. I would go into debt to get medical care for myself or my family (and, actually, that’s the cause of about 90% of the debt I brought into our marriage anyway!) I  would just pay the minimums on my credit cards for a while to keep the bills current. I would take on a car payment temporarily to ensure that I have a working vehicle. At the same time, any money I have once the goals above are met WILL go toward debt repayment, and the end result, no matter how long it takes, is going to be the flexibility that comes from being truly debt-free.

What these priorities have made me realize

Here’s the thing. When I stopped and wrote down what REALLY matters most to me, I’m actually making more progress than I realized!

It turns out that while debt repayment is still a priority for me, it’s not my top priority – and so, while I’ll continue to push at it, I’m going to take a step back and celebrate the fact that, despite a drop in income in our family of more than 50% for the past five months or so, I AM meeting my financial goals!

Because I was hung up on just one goal – the debt-payoff progress, and my frustration that it hasn’t been going faster – I had been feeling defeated. Because I was only “holding steady,” I wasn’t finding anything to celebrate.

Now, I realize how thrilled I am to look back at the past few months and realize, “HEY. I kept food on the table! I kept a roof over our heads. And I did it without increasing my consumer debt!”

I AM making progress.

I AM meeting my financial goals.

I AM living in keeping with what my true priorities.

It goes without saying that your 20s come with lots of new things: new friends, new experiences, new perspectives, and new legal allowances.

As it turns out, they’re also packed with defining moments that will shape the rest of your life. And while it’s usually very difficult for young people to think about things like planning for retirement and investing in life insurance, the truth is that those AARP discounts are closer than you might think. So if you can learn these important things about money and finance now, in the future you’ll be happy that you did, and probably a lot richer too.

1. Pay Yourself First

“Don’t save what is left after spending; spend what is left after saving.” – Warren Buffett

While the concept of saving may be a familiar one, paying yourself first is often misunderstood. I didn’t understand the idea until I was well beyond my 20s, but I wish I had understood it sooner.

Paying yourself first means taking a portion of your earnings and putting it into a savings account or investment that can then work to earn you more money, all while you sleep.

The reason why this is so important is because when you’re saving money it grows in relation to the interest it accrues, so the more money you have to save and the longer you’re saving, the more you can take advantage of this extra “free” money.

Alternatively, by not saving you’re also losing the money that could be gained in interest. That’s why it pays to learn how to pay yourself first.

2. Learn how to Leverage the Power of Compound Interest

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” – Albert Einstein

In his book

The Slight Edge, Jeff Olson explains the power of compounding with a penny. A penny doubled each day for thirty-one days is greater than one million dollars today, he explains, and actually adds up to $10,737,418.24!

Photo credit Cviko Vidakovic

Twenty-somethings have the best opportunity to take advantage of compounding because of the magic of time and the power that compounding gains as it grows. Unfortunately, many 20-somethings ignore this wealth-making practice and lose valuable opportunity in the process.

3. Grow Your Financial Education

Becoming financially literate is not rocket science, though it can seem like it — especially when the majority of us are not taught financial literacy in school. But just like a higher academic education helps you advance in your career, higher financial education helps you advance in life and in what you can do. Thankfully, there’s no better time than your 20s to start the learning curve with any number of great resources.

4. Know Your Credit Score and Keep it Up

In the September 2014 issue of Success Magazine, Suze Orman, the money guru herself, says that understanding your credit is key to financial health. “A FICO score will determine if a landlord will rent to you. It may determine if an employer will hire you. It determines if a telephone company will give you a phone, and it even determines what your car insurance premium happens to be.”

As credit scores go, anything below 500 is a red flag and, just like your grades in school, it’s a lot easier to slide down than it is to bring back up, so pay attention. For additional queries and your free credit score, use CreditKarma, Credit.com, or Bankrate.

5. Live Within Your Means

“Do today what others won’t, so tomorrow you can do what others can’t.” – Dave Ramsey

In theory, if you have an income that can pay for your basic needs, you can eventually amass at least a small fortune by paying yourself first, using the power of compounding, making smart investments, and living within your means. However, most 20 somethings are still honing these practices. Not surprisingly, this is also the time when many people begin using credit cards to pay for things not necessarily within their budgets.

Living within your means may look like skipping the movies on the weekends, trading your daily Starbucks for a homemade cup of coffee, or forfeiting that shopping spree in favor of recycling your wardrobe for a few seasons. However, when you practice this without reliance on debt, you give yourself a better chance to build a strong financial base. You might not think so now, but if you don’t put down that iced latte, you may be kicking yourself in the future.

6. Learn to Use Discipline to Manage Income and Expenses

“We must all suffer from one of two pains: the pain of discipline or the pain of regret. The difference is discipline weighs ounces while regret weighs tons.” – Jim Rohn

There’s a great book that every 20 something should read called The Richest Man in Babylon. Trust me, if I had read this book in my 20s, I’m sure I’d be a millionaire by now!

Through a series of parables the author, George Clason, relates the common experiences of poor money managers and outlines disciplines that lead to lifelong riches and wealth.

So imperative to financial health are the disciplines of managing income and expenses that these lessons serve as the foundation of the entire book. Unsurprisingly, failure to have a financial plan with these in mind is the number one regret of people when they reach retirement. Luckily for you if you’re in your 20s, it doesn’t have to be yours.

7. Learn to Manage Your Emotions Around Money

“In the world of money and investing, you must learn to control your emotions. High emotions equal low intelligence.” – Robert Kiyosaki

There’s no denying that having money (or not having it) comes with a lot of emotion. When we have it we’re happy (and often irrational), and when we don’t we’re sad. With each emotion come behaviors that can make or break our financial stability for the future. Many a divorce, bankruptcy, and heart attack have been attributed to the stress that people feel around money that could have easily been avoided.

Learning to manage your emotions with money is not only a good idea, it’s the thing that will help you to successfully navigate your way through the thousands of financial decisions you’ll need to make throughout your life, so it stands to reason that the better you can do this, the more money you’ll keep.

While it may be easier said than done, there are always resources that can help you identify your level of emotional intelligence around money and work to improve it at the same time.

Your twenties are a mixed bag full of fun experiences and new opportunities for growth. But if you can find a way to incorporate the seven practices above, you’ll not only thank yourself later, but even be able to afford to buy yourself an expensive treat!

Noize Photography via photopin cc

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