Do you feel that your quality of life would be better if you weren’t consistently worrying about the state of your financial health? If that thought goes through your mind on a regular basis, you’re far from being alone. For a large percentage of adults in the United States, financial concerns are their top source of stress. This form of worrying is such a significant issue that it can literally lead to divorce or health problems.
While the odds of a single event eliminating all of your financial problems is highly unlikely, there are ways that you can begin building wealth for yourself and your family. In fact, the process of building wealth is far simpler than many people realize. However, that statement doesn’t mean that building wealth is easy. What it means is since there are only a few proven methods for building wealth, that’s where you should focus all of your attention.
So with the goal of identifying the keys to building wealth and then fully focusing your attention on them, let’s take a look at the four ways to build wealth:
Start Spending Less
One guaranteed way to never build wealth is to always spend more than you make. So if you want to start taking control of your finances and ultimately building wealth, you need to identify exactly where your money is going every month. Once you have this awareness, you’ll be able to start cutting unnecessary expenses.
Start Earning More
Although getting your spending under control is a very powerful strategy for improving your finances, that specific tactic can only go so far in the pursuit of building wealth. For most people, reaching their desired level of wealth also requires earning more. Luckily, we live in a time when that’s arguably easier to do than ever before. Not only do we have all sorts of technology at our disposal, but there are numerous ways to increase income. Teaching, starting a business, flipping assets, moonlighting or simply asking for a raise are all examples of ways that you can start earning more.
Get Rid of Debt
Debt is the mortal enemy of wealth. If you’re in debt,getting rid of it should be your top priority!
The reason the last section was so short is that if you have a cloud of debt hanging over you, saving or making investments in a way that will build wealth simply isn’t a possibility. But once you’ve freed yourself from the chains of debt, you can begin investing and building real wealth for yourself. While educating yourself about investing is very smart, it’s also highly recommended to enlist professional help as you begin moving down this path.
Although it usually takes some time to get yourself in a position where you can really start building wealth, focusing all of your attention on the four steps we covered above is the best way to get there.
Although divorce may ultimately be the best option for your future, that doesn’t mean it’s an easy process. Not only can getting a divorce to the point of being finalized be a very stressful experience, but that’s just the start of what you have to deal with handling.
One aspect of life after divorce that people find especially challenging is creating and managing a new budget. This task can be equally challenging for both men and women. A big part of why budgeting after divorce is so difficult is because you have to change what you’ve been doing for years or even decades. Adding to complication is the reality of facing additional expenses or new income limitations.
Since we know just how difficult it can be to get a handle on your budget after a divorce, we’ve put together a guide to help put you on the right track:
Pinpoint Your Total Monthly Income
There have probably been points in your life when you thought of your income as a ballpark figure. While plenty of people are able to get away with estimating their income and subsequent budget, adjusting to life after a divorce is not the time to skim on details. Instead, you need to calculate your exact income. Make sure the final income you pinpoint includes any adjustments for child support or alimony that you’re paying/receiving.
List Out All Your Expenses
In most cases, this is the most time-consuming step in the budgeting process. Although it can take quite a bit of effort to list out all of your expenses, this step is vital for long-term budgeting success. Without knowing exactly where your money is going every month, you’re never going to be able to reign in your spending.
Identify Expenses You Can Eliminate
Before you do a comparison of your income and expenses, look for the expenses that you already know you can comfortably eliminate. Since the listing process likely identified some expenses that you hadn’t even thought about in quite awhile, trimming the fat should be easier than expected.
Make the Hard Decisions
Once you’ve done your initial elimination of unnecessary expenses, it’s time to see if your income covers your monthly needs. Because saving money every month is extremely important, there should be a solid buffer between how much you’re making and how much you’re spending. If you discover that you’re still in the red, it’s time to take a harder look at your expenses and decide where you need to downsize your spending.
Creating a working budget isn’t something that’s going to happen overnight. But as long as you follow the above steps and commit to following your budget, it should only take a couple of months for all of the pieces of your monthly financial plan to properly click into place.