Increasing your wealth is part of the American dream, but few people would believe that it is easier to increase your wealth than it seems. Simple steps like paying off debt and living within your means will help you advance to having a more secure financial future. Increasing your wealth also involves saving for your future by creating an emergency fund and maxing out your retirement savings. Increasing your wealth takes time and means making smart financial decisions instead of focusing on “get rich” schemes.
- Pay off any existing debt.
Paying off debt early means paying off interest early which saves you money in the long-run. Instead of paying off multiple debts at once, focus on the smallest ones so you can use the “snowball method” to pay off the larger ones and the ones with the highest interest rates. It also doesn’t hurt to call your creditors and ask for a lower interest rate because many will negotiate with you if they know you are focused on paying off your debt.
- Live within your means.
Living within your means is crucial to increasing your wealth because it means you won’t have as much debt as people who have lived for years on credit card purchases. Stop focusing on trying to compete with your neighbors and friends and start focusing on living within your personal means. You may not have as many “humble-brags” to post on social media, but you can sleep better at night knowing that your financial future is secure and steadily increasing.
- Don’t just buy.
Along with living within your means, you shouldn’t buy just to buy. Before you make any purchases (large or small), you need to ask yourself if you really need that item or experience. You might find a designer handbag at an out-of-this-world price, but if you already have a similar one at home, you need to walk away. Sure eating out is fun and can be a nice treat, but cooking at home will save you a great deal of money. Instead of eating out 4 times a week, eat out once a week, and you can use your savings to pay off debt or make a financial investment.
- Invest in yourself.
Whether it’s investing through an educational degree or in an entrepreneurship opportunity, investing in yourself is a key way to increase your wealth and future opportunities. By investing in yourself, you will be able to broaden the opportunities offered to you which will help you find new ways to increase your wealth.
- Create an emergency fund.
You never know what life will throw at you, and it’s smart to have an emergency fund with 3-6 months of living expenses in place. By having an emergency fund, you will be prepared financially for the unexpected which will help to lower your stress and avoid making you run up debt expenses. Once you have your emergency fund created, don’t touch it until an actual emergency (ex. illness, job loss, car repairs, etc.) occurs.
- Max out your retirement savings.
Especially if your company offers a retirement savings match, you need to, at the very minimum, put in whatever the company is offering to match. Research has shown that saving for retirement yields more if you start saving less at a younger age than if you start saving more at an older age. There’s always the temptation to put off saving for a few more years when you are more prepared, but life will always have expenses so start saving now.
To increase your wealth, you need to focus on taking a few proactive steps to make sure your financial future is as secure and positive as it can be. By focusing on saving for your financial future instead of buying tons of material possessions, increasing your wealth will not be as hard as it seems.