Let’s talk money.
Specifically, how you can build wealth without sacrificing your quality of life, it’s never too early or late to start figuring out your financial management, and it won’t be as complicated as you think.
If you’re ready to take control of your money and learn the best ways to build wealth, this guide is for you. So bust out the notepad and get ready to jot down some tips that are sure to transform your bank account.
Keep reading to learn more.
1. Dealing With Debt
The average American is $90,460 in debt. Unfortunately, it can be difficult to climb out of debt, and it can cause a lot of stress in your life. Regardless of where you’re at with the amount of money you owe, you’ll want to come up with a plan to get out of debt—and stay out!
The first thing you’ll want to do is figure out how to pay it off in a decent amount of time, at least before the interest rates get to you. You can start by transferring the balance to a lower-rate card, for example. If this isn’t an option, you’ll need to do some classic number crunching.
See how much you can pay monthly and start making a plan to make some extra money. Don’t think you can get away with minimum payments. This will only delay the process of paying everything off quickly.
Live below your means for a bit. Then, every dollar saved can go to living a debt-free life. Then you’ll have a clean slate to begin accumulating wealth.
2. Stick to Your Stocks
One of the best ways to acquire wealth is through investments. Although it may seem risky to roll the dice in the stock market, it can be a great way to build wealth. The secret is to do your research.
There are professionals in this world that can tell you everything you need to know about the stock market. But, if you’re smart about it and see it as a long-term strategy, you’ll be surprised to see how well it can work for you.
With that said, be aware of the risks and have plenty of backup investment plans.
3. Time to Think About Retirement
The harsh reality is that once you’re in your 30’s, you’re halfway to retirement. But, even if you’re older, you can still catch up and start putting money towards a comfortable future.
A well-funded retirement plan will provide peace of mind and can even leave something left over for your loved ones so they can accumulate wealth on their own. Once you’ve tackled your debt, invest 15% of your gross income into retirement.
Regular, consistent investing over a long period of time is the reason for many millionaires’ success. It’s not an overnight goal. It all takes time!
4. Budgeting Is Your Best Friend
It can get easy to get caught in the daze of day-to-day spending. A coffee here, a movie subscription service there, those small purchases don’t feel terrible at the time. The problem is that swiping your card often can quickly add up even if you aren’t spending much.
Think of your monthly subscriptions, they probably aren’t intimidating on their own, but once you add them all up…you can see where all your money is going. To keep track of your spending, create a monthly budget sheet.
This is now your new financial bible. You can start logging purchases, putting money away in your savings as well as investing properly. It’s ideal for holding yourself accountable.
5. Beware of Risky Purchases
Everyone wants to drive a nice car or own a large, beautiful home. However, these purchases can significantly set you back. You’ll either make a large dent in your savings, or you’ll be paying off a frivolous purchase.
Instead, think of minimizing those costs by living practically. You don’t need a luxury car or a mansion. You need a reliable source of transportation and a comfortable home.
You can absolutely work your way towards those dream purchases, but only when you know, you’ll be able to pay them off without concern.
So steer clear of constant lavish vacation and overpriced material goods. They aren’t worth losing your financial peace of mind.
6. Keep Your Credit Healthy
A healthy credit score will help you secure ideal interest rates on loans, boost your ability to rent an apartment, and also helps with lower insurance premiums. This is a snowball effect. Once you can prove that you’re good at handling debt, it’ll be easier to take control of your finances.
Generally, a credit score of about 750 qualifies you for the best loan terms. However, if your credit score isn’t looking too great, you’ll want to follow these tips to get it higher:
- Pay all of your bills on time
- Use a low percentage of the credit available
- Avoid applying for multiple credit cards at once
7. Hire a Financial Advisor
If you’re able to hire a financial advisor, great, that is an almost guaranteed way to get your wealth in order—especially in the long run. Consulting a professional will help you make crucial financial decisions and avoid mistakes that might cost you big-time in the future.
If financial advisors aren’t an option for you, there’s plenty of affordable alternatives. For one, you can listen to podcasts that discuss all things money, like Wealthability. In addition, you can read different books on finances or even talk to a wealthy friend who could provide some great tips.
The point is, having a person around who understands wealth is a great way to start building your own.
Build Wealth at Any Age
Although people say that money doesn’t buy happiness, that isn’t true. Yes, it’s important to live a life outside of financial pursuits, but knowing how to build wealth will only improve your circumstances. So you can enjoy your free time while also working toward a comfortable future.
The best part is that you can begin at any age, even if you’ve acquired some debt or struggled with money management. Start with these tips, and you’ll be surprised where you end up in 10 years.
Looking for more articles like this? Be sure to check out the finance section of our blog!