Congratulations! You took the time to review your expenses and set up a budget. That’s the foundation on which you can build wealth over time. Consider it as an initial investment that can pay you dividends as the years pass by.
Now that you understand where your money is going, you can see how closely your spending is aligned with your goals and map out a route toward Better Wealth!
Imagine a magician transforming data into a road map to rich treasures. But this isn’t buried treasure. It’s wealth that you’ll create through hard work, discipline, and healthy money habits, along with smart investing.
Here are some steps to take so that you know you’re on the right path to building that wealth:
1. Visualize your goals for retirement and write them down.
Retirement saving isn’t just about aiming for a number and saving enough so that you achieve that financial goal. It has to have real-world relevance. You have to tie it to a goal of how you’ll want to live your life once you’ve finished work. How do you want to spend the rest of your life? Where do you want to live? Do you see yourself traveling much? And how much will this retirement lifestyle cost?
2. Talk with your spouse about your plans.
If you’re married, obviously you and your spouse will need to agree on what retirement looks like. Begin to talk about your retirement plans if you haven’t already. Where to live, where to travel, what kind of lifestyle do you both want and how much will it cost? And, how realistic is this and how will the two of you make it happen? Ultimately, you want to make sure you’re on the same page and looking at the same map! The sooner you talk this through, the better, so that you can travel that road together.
3. Start with the right foundation.
Before you can build a mansion, you need a solid and secure foundation. So, begin to put the pieces in place once you know your budget, your future life goals and the accompanying financial goals that will enable your retirement dream to become reality. And if you don’t see how you’ll be able to afford to save the necessary funds, you may need to revisit your budget and consider what current expenses you can trim in order to save more.
4. Take it step by step.
Retirement dreams are not built in a day. It’s a long journey and it may be difficult now to see how you’ll get there, so it’s important to begin with a clear destination and make sure you’re going in the right direction. Incorporating healthy financial habits into your lifestyle will help you accumulate wealth steadily. Be disciplined and organized, and check on your progress from time to time.
5. Monitor your progress to make sure you are on track.
Just like regular physical check-ups are highly recommended so that you make sure you remain healthy and have the time to address any health concerns, the same applies to your finances. Stay on top of your monthly budget, revisiting it regularly, and monitor your progress towards building better wealth. That includes monitoring your investments with your financial advisor, and doing an annual financial tally of your net worth –– all of your assets minus your liabilities. Essentially, that is what wealth is. As you net worth grows, your financial security will as well.
It’s funny how a simple exercise of knowing how much you spend and save each month can be the foundation to financial security for the rest of your life.