This post was inspired by one of my latest Instagram posts, where I did a checklist of all the things you need before you start to build wealth.
And guess what – you don’t need to come from money to build wealth, and you don’t even need to be debt-free either.
I will die on that hill!
Those are just limiting beliefs that prevent us from ever achieving our goals.
Anyone and their dog can follow these super simple steps to start building their own wealth.
Yes, even you!
I believe these 5 things are absolutely crucial to your wealth building journey.
In this post, I’ll be diving into each one in more detail.
1. Make a plan
I’m not talking about a whole sophisticated “financial plan” like the professionals make.
I’m talking about a simple plan that outlines your personal goals.
Maybe your goal is to build generational wealth that gets passed on to your children/grandchildren, or maybe you just want to retire early.
Whatever your goal may be, it is important to create a plan that helps you take action towards those goals.
2. Create a Budget
I get it – budgets are boring! But they serve a purpose.
And that purpose is to help you understand exactly where your hard-earned money is going each month and to prevent overspending.
Spreadsheets not your thing? That’s not an excuse to not budget! There’s tons of apps/websites these days that take the guesswork out of budgeting, such as YNAB.
3. Automate Your Money
This is by far my favorite way to save my money, invest my money, and pay off my credit card each month.
Because it’s passive once it’s all set up!
I mean, think about it – life gets crazy sometimes and it’s often hard to remember exactly how much money you’re going to invest, save, or pay. And think about how much time you’ll save too!
Most brokerages and banks have settings that allow you to automate things – try it out if you haven’t yet, you’ll never go back to the manual way again!
4. Increase Your Income
Increasing your income is a surefire way to start building wealth.
And the best part about this is that there are many different ways to increase your income, including:
- Asking for a raise at work
- Securing a promotion
- Getting a higher paying job
- Starting a side hustle
Doing at least one of those things will help you build wealth at a faster rate.
5. Decrease Your Expenses
I’m not saying you need to cut out the good things in your life that spark joy – like your Netflix subscription.
And I’ll be honest – That’s a non-negotiable for me!
What I am saying is that you should cut back on what you don’t need.
Maybe you rent an apartment for $2,000 a month while living alone. If you add a roommate who splits the rent evenly with you, you’ll be saving $1,500!
Maybe you’re thinking of purchasing a 2022 car. If you choose to finance it, you’ll be paying hundreds of dollars a month to pay off that loan.
If you choose to instead buy a car that’s maybe a 2017 or 2018 model, you’ll be saving a lot of money (especially if you buy it in cash!).
Cutting back on what you don’t need will help you increase your savings and investing rate, and even help you pay off debt quicker because you’ll be keeping more money in your pocket!
Summary
To sum up, building wealth comes down to 5 simple things:
- Making a plan
- Creating a budget
- Automating your money
- Increasing your income
- Decreasing your expenses
Thank you for reading! For more personal finance content and if you want to follow along my own journey, please follow me on Instagram, where I share it all.
And of course, stay tuned for the next blog post.