9 Tips to Grow Your Wealth
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Whether you’re a college student who’s struggling to buy food at the end of each month, or a parent who’s managing to get by but doesn’t have a lot to put away, you might be wondering if you’ll ever be able to get out of this rut and grow your wealth.
Americans have a longer life expectancy now than ever before, but saving for retirement might seem to overwhelming to even think about. If you want to grow your wealth over time without a lot of wiggle room right now, here are some tips to get there.
Don’t Get Caught Up in Wants
The prevalence of social media can make it easy to feel the need to compete with others. We’re constantly bombarded with images of what everyone else has: it could be a new car, a beautiful home, or nice clothes. We’re more tempted than ever to keep up with everyone else, but you should not prioritize your wants over your needs.
Create a Plan
So many people don’t ever make a formal budget, or if they do, they don’t stick to it. Sit down with your family, or speak to a financial advisor and make an aggressive plan. It’s essential to stick to your budget, and create a safety net so you don’t have to rely on credit cards if things get tricky. For example, if you’d like to save 20% of your take-home pay, you might need to forgo non-essentials like Starbucks or that once-monthly shopping trip for a while.
Set Financial Goals Early
Planning ahead is always your best option. When you set goals and check on them each year, you’ll have a greater likelihood of financial growth instead of stagnation. As you grow, you can change those goals, but don’t wait until you make a certain amount each year to start thinking about long-term goals.
Pay with Cash
A cash budget may not work for every one, but it’s still a smart way to limit your spending and save money at the same time. Studies have shown that people who spend with cash only have a great sense of attachment to the money and are less likely to spend liberally. In addition to being thriftier, a good rule of thumb is to save all of the excess change from your transactions. Just tossing the extra coins into a can will add up more quickly than you expect.
Get Aggressive About Debt
It’s nearly impossible to escape without student debt now. When combined with Americans’ reliance on credit cards, debt can be a huge mountain to climb. Many people opt to pay the minimum payments in order to have more money to save each month, but that’s not the best course of action, and it can end up holding you back from your goals. Even if you don’t have much to put away right now, tackle your debt aggressively to avoid paying back up the triple the original amount owed.
Consult With a Professional
If growing your debt is a source of anxiety and stress for you, it might be a great idea to consult with a financial advisor. They will be able to help you make a plan, and re-visit those plans as needed. For most people, the growth of wealth happens over the course of several decades. If you build a relationship with an advisor that you trust now, you’ll be much better off several years down the road. Just the knowledge that you have a meeting coming up with your advisor will probably help you stay on track with your financial goals more consistently.
Don’t Have Something to Prove
For example, in the 1970s, Warren Stephens took the advice from his professor to take the high road and not try to forge his own way just to impress others. As a result, he returned to the family business, which is now worth billions. Warren Stephens CEO now runs a wildly successful company, largely in part because of his father’s smart choice to stay his own path instead of proving something to others.
Protect Yourself with Insurance
If you’ve done well with saving and investing, it’s absolutely essential to safeguard that money against disaster. You never know what can happen, but luckily, there are ways to prepare for the worst. Once you’ve started to build wealth, speak with someone about your options for life insurance, disability, and an umbrella policy.
Commitment to your goals is the most important aspect to grow your wealth. Whether you like to meet with a financial advisor on a monthly basis to stay on track, or keep your goals posted on a sticky note to the fridge, it’s best to keep a careful eye on your spending and goals. With credit or debit cards, it’s easy to let your money get away from you without even thinking about it. Discipline and commitment now will lead to a prosperous future. It’s possible to achieve the future you’ve always wanted with foresight and determination to stick to your plan.
Photo courtesy of: NikolayF
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