In today’s world, it’s difficult to build wealth, but it’s more important than ever with stagnating wages and rising inflation. Not only is building wealth important for yourself, but it can also help you build generational wealth that you can pass along to your children.
Fortunately, there are still ways to invest your money and save, and they’re easier than you think. Let’s talk about how to build wealth in 2022!
1. Create a Budget & Save
Studies show that written goals are 42% more likely to be achieved. For that reason, sit down and look at all of your expenses and write out a budget plan to start savings.
For most people, following the 50/30/20 budget is an excellent way to save money. Essentially, you break all of your expenses down into 3 categories: wants, needs, and savings.
First, 50% of your budget will go to things like groceries, rent, utilities, and other basic living expenses. Not everybody can lower these bills, but if you look closely, you may find ways to save.
Second, 30% will go to things you want. This is where most people have trouble limiting themselves, but you can always find options to save. For example, cutting out a $5 coffee every morning will save you $150 a month!
Lastly, you want to dedicate 20% of your income toward savings or investment options. If you manage to bring the other two categories down below 50% and 30%, don’t just spend more on “wants”. Instead, boost your savings power!
2. Increase Your Income
Of course, this is easier said than done. However, there are far more options than ever before when it comes to saving money.
For example, you can start by driving for Uber/Lyft or delivering for DoorDash if you own a car. Do you have any skills that can be done on a computer? If so, there are thousands of freelance opportunities available.
Also, if you want to start a side business, what’s stopping you?
Beyond that, try asking for a raise or for more hours at work. Anything you can do to increase your income will help you boost your savings and start building wealth.
3. Stop Renting
Renting is the antithesis of wealth-building, as you are simply throwing money down a drain. On the other hand, paying a mortgage is putting your money toward something that you own.
Also, don’t limit your ownership just to your place of residence. There are plenty of assets that can help you build wealth. Learn more at https://www.raremetalblog.com/regal-assets
4. Get Out of Debt
Before you start investing, try to get out of debt. Long-term installment loans like mortgages aren’t a big deal, especially if you’ve refinanced or have a low rate.
However, if you have credit card debt, payday loans, or anything with high interest rates, focus on paying it off before savings, as this will severely hinder your wealth-building power.
To demonstrate this, if you have a 25% APR on your credit cards and you owe $10,000, making the minimum payment each month means you will owe an additional $2,500 at the end of the year. Prevent that at all costs!
Build Wealth Today
Now that you know how to build wealth, there’s no time to wait. The sooner you put these wealth-building tips to use, the sooner you will see your wealth increase.
Start saving today and keep up with our blog for our latest financial tips!