Practicing the right financial habits is crucial for accumulating wealth.
Michela Allocca, who reached a net worth of over $500,000 by age 28 as verified by CNBC Make It, has firsthand experience in this area.
She transitioned from a financial analyst to a personal finance coach in 2022, and her TikTok video on wealth-building has attracted nearly a million views.
Here are the five spending habits she stays away from:
- Steering Clear of Sales Traps
Sales might look like great opportunities to save, but Allocca warns they often lead to buying things you don’t actually need. She explains that sales are designed to create a fear of missing out (FOMO) and encourage unnecessary purchases.
For Allocca, even a discounted item you don’t need is still an expense you hadn’t planned for. She shops for essential items on sale but is mindful about not overspending on other things.
- Managing Impulse Buying
A study in 2023 showed that nearly every American adult sometimes buys things on a whim, and 64% regret these purchases. To avoid impulse spending, Allocca refrains from spontaneous shopping. She lists items she wants on her phone and waits a while before buying, often finding that the urge to buy diminishes over time.
Allocca highlights that not every purchase can be seen as a ‘little treat,’ pointing out the need for discipline in spending.
