?by April Lewis-Parks
The principles associated with building wealth are simple and haven?t changed over time. Don?t spend more than you earn and put money into savings. However, this can be easier said than done, and it becomes all too easy to contribute less to your savings than you should when an impulse buy or bill arises.
There are three effective strategies associated with building wealth, and sitting down each month to make sure you are following them can not only help you start setting a foundation for your future, but also keep you motivated to continue building a solid financial profile.
1. Save money. This principle seems pretty blatant, but how often have you decided not to pay yourself first in favor of making a larger credit card payment or splurging for your best friend?s wedding. It?s imperative that you follow a simple rule when it comes to your savings: always pay yourself first. It?s tempting to divert the $200 a month intended for your savings toward paying off the remainder of a credit card bill. But the truth is, there will always be an expense that pops up. But at the end of the day, you may be more financially solvent if you have a $1,000 savings account and a $300 credit card bill you are slowly chipping away at versus $0 in your savings and a $100 credit card bill you?re paying down more quickly.
2. Protect your assets. Saving a great deal of money will count for nothing if you do not protect yourself from outside factors that could jeopardize your income. For example, little or inadequate health and auto insurance can force you to drain your savings accounts and rely solely on credit cards to cover the costs of an emergency. Insurance can seem costly at times, but it?s not nearly as costly as incurring out-of-pocket costs associated with a medical disaster or auto accident.
3. Learn how to invest. Investing is one of the most time-honored ways to accrue wealth and save for your retirement. Getting started when you know little about stocks and other investment vehicles can seem daunting and risky, but starting early will give you time to learn the ropes before you start amassing sizable wealth. Further, the earlier you start, the more you will amass as the years go by. There are any number of free resources that can help you become an investing guru, such as webinars, tutorials and even stock simulations.
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