3 Wealth Builders to Use
There are 3 components to building your wealth. You can’t really just cut back on expenses, at some point, you’ll reach a limit. You also can’t throw more money at the situation without keeping your expenses in check. Finally, you need to have a system that allows to focus on your goals and not one tracking every cent.
How can you do it? What are the 3 wealth builders? I’ll show you what has helped us over the years.
Cut Expenses in Your Budget
What do you think is your biggest expense you can reduce in your monthly budget? Everyone has to analyze for themselves what they can cut, but here are two areas that hold people up on building wealth.
- Cut down on transportation expenses. See if you can lower your car expenses by shopping around for a good insurance rate. Can you avoid a car loan altogether and get a car with cash instead?
- Dig yourself out of debt. Some of our biggest monthly expenses goes towards debt. If you have credit card debt or a car loan, look at the money you can save monthly once they are paid off. If you’re interest rate is high, see if you can refinance it to make your payments more manageable.
How about you? What do you need to adjust in your budget?
Build Your Income Stream(s)
If you are only relying on you job’s salary, you’re leaving yourself vulnerable financially.
- Work for a raise at your current job. It is your responsibility to make sure that your manager and boss knows your accomplishments. Run the numbers make a case for an increase in your pay.
- Start a side business. Do you have a talent or skill that you already help others with? Make some money on the side to test the waters. As it grows, start treating it like a business and get he financial and legal steps handled.
- Sell your stuff. If you have some nice things that you’re not using, consider making some money off of them. Sell it and put the money towards savings, paying down debt, or investing.
- Invest for retirement and more. You may not think about investing as an income stream, but if you start young, it can become a significant part of your net worth. Take advantage of your company’s 401k program. Don’t have too much to invest? Try to at least set aside enough money to receive the company match. It’s free money and it can accelerate your retirement fund’s growth.
Start with what you’re comfortable with. If you don’t think you can start a business right now, then begin by getting a raise at your job. If you have a lot of clutter in your house and your stuff is in good condition, then sell it online or with the local paper.
Optimize Your Financial System
When you have your financial basics down, creating a financial system that is easy to track and maintain is the key to success.
- Set up free online bill pay with your bank or credit union – it should be free. Avoid late fees altogether by having your bank or credit union handle the heavy lifting. Check occasionally to make sure payments were sent out correctly.
- Set up automatic transfers. If you wait until the end of the month to put aside something in savings, you’ll probably find there’s not anything leftover. Instead, treat it like a bill and have money regularly transfer over into your account(s). Do the same for your IRA contributions to keep yourself on track.
Thoughts on Using Wealth Builders
For those looking to build their net worth, how have you started building your wealth? What’s been the easiest to start off with and what’s been the hardest to do for you? I’d love to get your feedback on it.