10 Surefire Ways To Build Your Wealth In 2015

Be sure to check out the related story, 10 Surefire Ways To Boost Your Productivity in 2015.

A new year brings renewed energy to strive for one’s goals and dreams. And key to that pursuit is money.

Whether you’ve set your sights on launching a business, taking a trip to Patagonia, or buying a house, you can’t achieve it without having enough cash. Even if your dream is to spend more time with family, what will free up that time is having the financial security to not need to spend those precious hours working.

If you’ve set your financial resolutions (learn how to make ones that stick here), use one of these 10 quick, easy ways to build your wealth so you can achieve them this year.


1. Seal the leaks. 

Take a look at your monthly and annual recurring expenses: gym membership, phone, cable, Internet, Netflix and Spotify subscription, Amazon Prime, bank fees, credit card annual fee, car insurance, homeowner’s/renter’s insurance, etc. Which of these do you no longer use much? If you’ve got an $8/month Netflix streaming subscription but have only actually watched movies on it five times in the last year, then you’ve just paid $96 to watch five movies — about $19 per film. Cut the subscription.

Take a look at your phone usage: Are you paying for 5,000 texts a month but using only 500? Drop to a lower plan. Get some new quotes for your insurance to see if you can get the same coverage for a lower price. If you realize you’re paying $120 a year just to have a checking account, get yourself a free one. (Learn what to look for in a bank account here, and how to switch banks here.)

Scrutinize every monthly expense this way — against usage and value — and cut or lower any that you’re not using or that aren’t providing you your money’s worth. For more ideas on how to cut costs, get inspiration from Mr. Money Mustache, who retired before age 30, and these roommates, who spent a full year buying nothing.

2. Get a budget you can stick to.

If you find it hard to stay on track with your budget, keep it simple. Start with your take-home pay, which should already be reduced by the amount of your retirement contributions to your 401(k) or other employer-sponsored account (more on that below).

Subtract housing, transportation, utilities and groceries (force yourself to stick to a figure you know you can hit every month). Ideally, they should total no more than 50% of your monthly take-home.

Then take at least 20% of that amount to allocate for debt, savings and IRA retirement contributions. This is your financial goals money.

With the remaining amount (which should be no more than 30% of your monthly paycheck), divide that by 4.33 to get your weekly allowance. This amount is what you have to spend on everything else: clothing, dining out, entertainment, classes, household supplies, toiletries, books, etc. Take it out in cash weekly, spend it down until it’s gone and then get creative until the next week. Or, if you’d like to use credit or debit to track your expenses, create a spreadsheet that states your weekly allowance and subtracts your expenses as you enter them. Such a spreadsheet will allow you to plan ahead: when you schedule an event, mark down the projected cost so that you know, when you enter the week, you have that much less to work with. I used just this kind of spreadsheet to pay down debt and build enough savings to quit my full-time job, and I continue to use it to stay within my budget. Here’s a more detailed explanation of how to set up a budget.


3. Make a plan to get out of debt.

Whether you’ve got mad grad school debt or a $10,000 balance on your credit cards, don’t feel overwhelmed. As long as you stick to a budget that keeps you from going further in the red and follow a plan to pay down your debt, all it will take is time until you’ve paid it off. To get started now, make a list of all your debts by interest rate, ordered highest to lowest, plus their minimum monthly payments. From now on, take your financial goals money and apportion it toward the debt, paying minimums on all your debt except the highest interest-rate one, which gets the rest of the money. After you pay that debt off, move your second-highest interest-rate debt into the top spot and repeat.

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