Our standard of living has gone down quite substantially since the 2008 recession. For many, being homeless is just one miss payment or a job loss away. Therefore, we have to rethink how we can manage a comfortable lifestyle. Below is a list of the top 5 wealth strategies for the average individual.
Do Not Go Into Debt
This is probably the most crucial of the top 5 wealth
Yes, getting to our jobs and other destinations are essential. However; a car is probably going to be the second biggest expenditure you’ll make. Those monthly payments will eat at your income, and the interest you pay will probably be almost as much as the car itself.
The interest alone is a tremendous opportunity cost as the money could go to other areas such as a personal savings account.
If you haven’t guessed by now, stay away from the high balance credit cards. I don’t advise one to avoid credit cards altogether. They’re an excellent way to build credit, and there may be a time where you may need to show a definite line of credit. However; if you decide to get a credit card, be sure to pay off the balance in full every time.
Minimize Your Living Expenditures
Your living expenditures are probably going to be your most significant monthly expense. Therefore, you want to focus on lower your living cost as much as possible. For example, instead of living on your own perhaps it may be best to live with roommates so you can share or minimize rent cost.
Recently, the cost of renting has gone through the roof and is getting out of reach for many. However; there may be other alternatives, such as RV, camper, or buying a tiny home.
Living in an RV, camper, or Tiny home will have a much lower cost than renting a house or perhaps even an apartment. If you manage to save, you could end up purchasing a well made Tiny home for roughly 35k.
I know 35k may sound a lot, but if you can keep your costs low, you can probably save enough in roughly three years. Once you buy your tiny home, all you need to do then is pay rent at an RV campsite. The cost of rent can range from $300-$700 per month and usually includes essential amenities.
However, if an RV, camper, tiny home, or roommates are not an option, you may want to look into living with family members or close friends. Whichever you decide, make sure you keep your living expenses low.
If you want to learn more on tiny home living, I suggest you check out these sites.
- My Tiny House Monthly Expenses
- Our Tiny House Cost Breakdown
- 7 Hidden Costs and Complications of Tiny Houses
Focus on Job Growth
If you’re in the job market, make sure you learn as many on the job skills as you can. You want to make yourself indispensable and more valuable for future job prospects.
It’s always best to enter the job market as young as possible. Unfortunately, the minimum wage laws are making it quite tricky for teenagers or even young adult apply for a job.
Minimum wage laws in many areas are starting at $15 an hour, effectively pricing out the inexperienced worker. If you’re a teenager and the minimum wage law is $15 in your area, I recommend learning some valuable skills right away.
Acquire Meaningful Job Skills
Education is crucial, but you don’t need to go to college nowadays. What’s important is having the skills that you can utilize and provide for your employer. Once you’ve learned a set of skills, it’s best to make a portfolio of the skills you’ve learned.
Even if you’re 15 and want to work at McDonald’s for your first job, if you show the store manager a portfolio of your coding talents, they will hire you. Why? Just because you’ve proven them that you’re capable of doing work that’s worth more than $15 an hour.
So they’ll know you won’t have a problem flipping burgers or running a cashier. All you have to prove is that you’re reliable, and that’s something you can verify by showing your school grades.
As for those who are not teenagers or young adults? The method above still applies, perhaps you can narrow it down to learning a skill that relates to the field you’re currently working.
After that, it’s all about proving your productivity and then promoting as quickly as you can. Just remember that employers are generally looking for the most productive employees, not the most educated.
Note: The Udemy course I purchased was on sale for 90% off. However; Udemy tends to have 75%-90% sales very frequently.
Have A Short Term and Long Term Savings Plan
Economic growth and personal growth is all about savings and not spending. The goal is to save as soon as you can (hopefully right away) and as much as you can. The earlier you start saving, the better and the easier it’ll be.
If you’re starting, you’ll want to save for an emergency first and then save for future purchases. After you established an emergency fund, you’ll want to start planning on what you want to save for, such as, clothes, a car, or even a new gaming PC.
You’ll also want to keep in mind that you should continuously save for things such as retirement or a house. I suggest you save for retirement right away even if your employer offers you a retirement plan such as a pension or 401k.
Never rely solely on your pension. Many of today’s pensions are severely unfunded and may end up defunct in the next recession. Yes, some laws protect pensions and pensioners.
However; there’s one thing I know and understand, and that is math doesn’t care about one’s feelings or laws. If the pension fund or the employer is broke, I would not expect pensioners to receive payouts.
Start a Family After You’re Financially Secure
Having a family is a considerable expense, make sure you have all your ducks in order before you start one. On top of that, make sure your partner’s finances are in order as well.
Never be afraid to talk to your partner about financial affairs. If your partner refuses to share their financial details, move on.
Children are expensive
Lastly, children are costly. Child care is not cheap, especially daycare costs. According to the United States Department of Agriculture, parents may spend an average of $233,610 on raising a child.
As you can see raising a child is not cheap. Be sure you’re financially ready for raising children. Otherwise, trying to accomplish these five wealth strategies can be extremely stressful.
However, if you manage to follow these top 5 wealth strategies, you’ll find it easier to live a comfortable lifestyle. Just remember, you always want to avoid debt as much as you can.
Also, plan your money wisely and think about your short-term and long-term future, and you’ll get to enjoy your life.