Building wealth and enjoying life are not mutually exclusive. In fact, it’s possible to build wealth and still enjoy your time when you’re young. It’s discouraging to think that all you need to do is work so that someday you can rest. What if you can balance rest, fun, and work, all while building the wealth you want and need? Here’s how you can enjoy life while building wealth.
Know Your Priorities
You have to know what’s important to you, what’s not, and how much time and effort it will take to get from where you are to where you want to be. If your goal is long-term wealth-building, retiring early, or something else, it’s vital that you look at the things that will help you get there.
Evaluate what you want in life. Maybe it’s more time to work on hobbies or perhaps it’s more time with family and friends. Look at the things you could live without. Do you really need 8 subscription plans for watching TV? Or could you get away with just one? Consider what you need in order to make your dreams come true. It might not necessarily be a dollar amount, but the ability to do certain things like taking vacations every year, playing casino table games without breaking the bank, or buying groceries without needing to look in the bank account.
Understand Your Cash Flow
Next, you need to understand your cash flow. Cash flow is the difference between how much money you earn and how much money you spend. It’s a simple concept, but understanding it is crucial to your long-term wealth-building plan. The measure of cash flow comes from subtracting your expenses from your income. This number can tell us whether we can afford investments like stocks or real estate or whether we should pay off debts like student loans and credit card debt first before making any further moves with our money.
Live Below Your Means
This sounds generic, but it’s critical. Wealthy people learned how to live below their means or how to make more. One of the most common questions of people who want to build wealth is how to do it without any savings. The truth is that you can live below your means and still enjoy life on less than you make. You don’t have to live paycheck-to-paycheck or put yourself into debt just because others are doing it. In fact, there are many ways to save money so that you can afford the things you want in life without having a large amount of disposable income right now.
Be Diligent With Your Finances
The first thing you need to do is make a budget. This is perhaps the most important step in financial planning, and it’s also the one that people tend to neglect. In order to live below your means and build wealth, you must first know what your current income is and where it’s going each month. You can use an online tool like Mint to track your spending habits. It will show you how much money is coming in every month as well as where it’s going.
Next, pay yourself first. The idea of paying yourself first means taking a portion of every paycheck to go directly into savings before anything else gets taken out. If this seems impossible at first, try gradually increasing what percentage of income goes into savings until you’re reaching the amount that feels comfortable for you, and never dip below this number.
Invest Your Money Wisely
Wealthy people also know how to invest. When you want to have fun while you’re young and you want to build wealth, you can do both if you have a good budget in place and a plan. Investing is a great way to build your wealth. It can also be fun, but that depends on you and how you approach it. There are plenty of ways to invest. Use your company 401K match if possible to maximize the amount of extra money you put in. You could also use apps like Robinhood to try out investing in the stock market as well.
None of these things require you to stop enjoying life. You do need to prioritize your income, avoid debt if possible, and look for ways to invest. When you do these things, you’ll find you have more money for fun and for building wealth.