Discovering how to save money and build wealth is a major factor in how I was able to put my student debt and credit card debt behind me for good.
While there are a number of ways to help you save money each month, if you are only generating a minimal amount of money, you’ll only have so much to work with, and regardless of how good you get at financial maneuvering, you’ll likely still find yourself just a few paychecks away from poverty.
Here are 6 simple ways to build wealth that you can begin implementing over the next few weeks, slowly transforming your financial situation from one of scarcity to one of true abundance.
1. Automate Your Savings
Rather than trying to remember when to move money into savings (or contribute to a long-term investment account), you can automate your money-saving by having an automatic transfer set up to happen monthly or weekly into your savings account.
You’ll have a basic concept of how much money is remaining that can be placed into financial savings once you develop a budget plan. If you don’t have any money left over, then simply move over an extremely small amount (even $1 a month, provided your bank doesn’t charge inordinate fees for a monthly transaction of that nature).
While saving $1 a month may sound silly, it is an important symbolic step that will give you a regular reminder that you have already started saving. As your income grows, you can simply increase your deposit amount from that, mostly symbolic, one dollar a month to ten dollars month then 100 then 1000.
500 a month would equate to saving $6,000 a year, and $1,000 a month would be $12,000 a year. If you could do that for ten years, that would be 120,000 dollars saved.
2. Start (and Grow) a Side Hustle
I was able to transform my side hustle into a full-time gig that replaced my “day job,” and you can too.
Find a side hustle that you truly delight in and can earn money from. I attempted several different side hustles before putting my focus on developing business plans for small businesses and entrepreneurs.
Some easy-to-start side hustles you may want to consider include:
- Starting a shop on Etsy where you sell Printables.
- Becoming a Pinterest or Twitter Virtual Assistant and helping businesses and influencers grow their brand on the platforms by posting quality content and engaging with the community.
- Becoming a Facebook Ads Manager and producing high-performing ads for local businesses in your city or worldwide.
- Starting a blog site in a niche that you have an interest in.
- Becoming a remote bookkeeper that aids small businesses.
Even if you aren’t looking for a side-hustle to replace your day job, having one can still be a beneficial way to earn a little extra cash each month, allow you to broaden your horizons creatively, and give you the opportunity and reason to learn new skills.
3. Invest In Yourself
You can build wealth simply by improving your psychological and physical well-being. When you spend time in yourself, you’re enhancing your self-confidence and increasing your base-line happiness level.
You can invest in yourself by:
- Decluttering your home or workspace.
- Starting a new hobby like painting, making clay pots, or writing.
- Taking 30-60 minutes a day to do an exercise. Even something as simple as taking your dog for a walk, going for a hike, or swimming can be a great way to get yourself moving and have some fun.
- Reading a self-improvement book.
- Learning a new skill.
By investing time in yourself, you allow yourself to become the best possible version of you – this in-turn will result in you doing better in work and over time can help you build real wealth.
4. Learn How To Negotiate With Your Employer Properly
Understanding how to negotiate your income is an ability everyone should learn.
In addition to negotiating your salary, you can likewise ask for tuition repayment, assistance with childcare prices, professional growth, education and learning courses, or even the adaptability of working from another location.
In order to have an effective negotiation, you need to be able to build a case detailing why you deserve a raise or various other benefits. Most people have no idea they can bargain their wage or benefits, but doing so can make a huge difference in your life.
5. Strategically Pay Off Your Debts To Become Debt-Free
If your objective is to pay off financial debt and start building a pool of wealth that can work as a safety net for you in the future, there are a few techniques to do this. First, we need to recognize the different approaches to settling outstanding debts. The most typical techniques are the avalanche method and the snowball method.
The avalanche method works by you paying off your debt that has the highest interest rate. Then you move on to your second highest possible interest rate financial debt and so on.
The snowball method works by paying off the charge card with the smallest balance and then working your way up from there.
An example of how this could play out:
- Debt1 (car loan): $7,000 at 9% rate of interest.
- Debt 2 (student debt): $20,000 at 7% interest rate.
- Debt 3 (bank card): $12,000 at 24% rate of interest.
If you were going to pay off this debt using the avalanche technique, this is the order you would pay off each debt in Debt 3, Debt 1, then Debt 2.
For the snowball method, you would pay them off in this order:
- Debt 1
- Debt 3
- Debt 2
The snowball method is great for people who like to get a sense of accomplishment as often as possible; completely zeroing out a small debt can give you a sense of accomplishment and momentum, helping to keep you motivated.
6. Love Money
For many people, money has a negative connotation. They only ever think of money as being a bad thing; they dread having to look at their bank account, get upset when they hear other people have lots of money, and just generally see money as being a negative force in their life.
Without getting too hocus pocusy, if you hate money – you’re going to have extra trouble figuring out how to make extra money because you’ll always be sabotaging yourself.
Learn to love money, see it as a tool that can do anything rather than as a weapon designed to hurt you, and you may be surprised by how quickly you can change your financial situation from one where the money is your sworn enemy to one where the money is your friend.
Incorporate these money pointers into your life, and you’ll see cash flowing into your life faster than ever before.
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