Adhering to certain financial principles is crucial for wealth accumulation.
Michela Allocca, a former financial analyst who reached a net worth exceeding $500,000 by the age of 28, as verified by CNBC Make It, knows this well.
In 2022, she transitioned from her corporate role to focus on her side business as a personal finance coach. Her TikTok video, garnering nearly a million views, offers insight into wealth-building based on her experiences.
Here are five spending behaviors she steers clear of.
Avoiding Sale Traps
Although sales are often seen as money-saving opportunities, Allocca warns that they can lead to unnecessary purchases. She explains that sales are designed to induce a fear of missing out (FOMO) and encourage buying.
For Allocca, purchasing an unneeded item at a discount is still an unplanned expense. While she still shops for necessities on sale, she remains conscious of not overspending on other items.
Controlling Impulse Buys
A 2023 study reveals that nearly all American adults admit to impulse buying, with 64% regretting such purchases. To combat impulse spending, Allocca avoids spontaneous shopping.
Instead, she adds desired items to a list on her phone, allowing time to reflect on the need for the purchase.
She advises waiting a few days before buying something impulsively, as the desire to purchase often fades.
Allocca emphasizes that not everything can be justified as a ‘little treat,’ underscoring the importance of self-restraint in spending.
