Make Your Money Work For You
It is easy to think of wealth as something that is inherited through generations or happens overnight. The media often emphasizes families' lives as rags to riches stories, neglecting to share how rare those scenarios are. News sites share stories of happy lottery winners but overlook the enormous odds ticket buyers face when they lay down their hard-earned money.
Given these misconceptions, it is easy to see why so many people haven’t taken the steps that could help them achieve their financial goals through planning rather than chance. With discipline and hard work, building wealth can be possible. Here are a few strategies and everyday habits that can make wealth-building easier.
Pay Yourself First
Paying yourself first is perhaps the most effective wealth-building habits and one of the easiest to implement. With this simple strategy, you direct part of every paycheck to a savings account, mutual fund, or other investment vehicles, forcing yourself to live on less than you make and setting aside funds that will grow for later use.
Know How Much Is In Your Accounts
There is a reason why financial institutions offer overdraft protection. A shocking number of account holders have no idea how much money is in their accounts. As a result, they are blindsided when writing a check or withdrawing cash from an ATM sends their balances negative often resulting in using overdraft protection and paying a fee. Knowing how much is in the account is an essential first step toward controlling unexpected costs and taking control of your finances.
Demand Real Value for Your Money
While you don’t want to focus your whole life on money, those who are wealthy are very in tune with where their hard-earned dollars are going. They assure that when it comes to managing their finances things like overdraft fees, unnecessarily high-interest rates, and unneeded or unused subscriptions are at a minimum. A great way to keep yourself in check is to value your items and experiences in terms of hours worked. For example, imagine that you are considering going out for a meal tonight, which might cost you $50. How many hours do you need to work to pay for that meal? Knowing how much each hour is worth can help you make the right choices.
Deposit (or Invest) Raises, Bonuses, and Other Found Money
If you want to build wealth, start by putting bonuses and other found money in a savings account or investing the cash in a mutual fund or other low-cost investment. When wealth builders get extra money, they avoid lifestyle inflation, opting instead to beef up their savings and investment accounts.
Develop Multiple Streams of Income
One of the fastest ways to build wealth is to bring in extra money, which starts with developing multiple income streams. That could be a side hustle, a home-based business, or even rental real estate. The idea is to generate extra cash, money that can be saved and invested.
Save on Everyday Purchases
People who are successful at building wealth look for ways to save money on everyday purchases. These people choose generic and store-brand products when they go grocery shopping. You might even see them scanning the racks of the local thrift store for gently worn designer clothes and used but still pristine furniture and home décor.
Take the Long View
Building wealth will be a slow and steady process unless you are the one in several million who buys that winning lottery ticket. If you want to succeed, it pays to adopt the long view, saving consistently, taking calculated risks, and tracking your progress over time.
Conduct An Annual Financial Review
Successful wealth builders know where they stand and where they are going. So, they conduct annual reviews of their finances, including emergency savings, investments, insurance, and all other expenses.
Building wealth is not necessarily an easy or quick process. If you want to build wealth for the long term, start today, and adopt these smart habits that can help you succeed. The strategies listed above can help you get started, one dollar and one day at a time.
Live Smarter
If you’d like to explore different savings options and methods to make your money work for you check out our Term Shares and Money Market accounts here. You can also speak to one of our friendly Financial Service Representatives by calling 315-735-8571 to develop a personalized savings plan that will fit your needs.
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This article has been adapted from Balance Pro.