Building wealth on a tight budget might seem like an impossible dream, but it’s really not – we promise. The thing is, although it might feel as though you already need to have a six figure salary to even get started, the reality is that you can achieve the financial stability you’re looking for, and even grow your savings, by making good choices, small changes, and being consistent. It doesn’t matter whether you’re only just starting out or you’ve been in business for a while and you know you need to make some positive changes, there are some ways you can take total control of your finances and your future and build wealth, even if money feels a bit tight right now. Read on to find out more.

Start Where You Are

Looking at your current salary and the outgoings you have to deal with each month might feel a bit discouraging when you want to build wealth – after all, if you’re living paycheck to paycheck and you’re not really able to put much (if anything) away for a rainy day, there’s not actually anything to build from. But you’ve got to remember that when you build wealth, the thing to focus on isn’t about where you’re starting, but instead it’s about where you’re going, and getting a clear financial picture of exactly where you are right now is crucial and is sure to help you – in fact, it’s a good idea to get a better picture of where you are even if building wealth isn’t your end goal as you might be able to make things better for yourself anyway. 

You should start by looking at every bit of income and every single expense you have each month – you can get various apps to help you, or you can do it the old fashioned way if you prefer, but no matter what you do, you need to know what’s coming in versus what’s going out, and if the latter is more than the former, you definitely need to make some cuts. The point is that understanding where your money is going and what you’re doing with it (and understanding what’s necessary and what isn’t) is the first step to take to making the money you do have work harder – and ideally, multiply. 

Set Clear Goals 

It’s hard to make sacrifices (which may well be needed when you look at your expenses and notice just how much you’re spending on things that you could easily do without) when there’s no real goal in mind – without a goal, you’ve basically got no reason to give up something you like (albeit temporarily – the idea is to build wealth, so although you might have to stop spending money on things right now, the final result should mean you end up with more ‘spare’ money overall), and it can feel even harder and less important without something to work towards. 

That’s why you need to define what it is you’re saving for – don’t just vaguely decide you should be saving something, but instead make it more specific, like building an emergency fund, paying off a debt, saving for a house deposit, and so on. And as is ever the case, once you’ve got more specific and realistic goals, you should break them down even further because it becomes even easier, plus you’ll notice a lot more progress and be motivated to keep going, even when you’re tempted to splurge instead of save. So rather than having a large amount in mind, work out how much you need to save per month or week, and it all becomes a lot easier to build wealth.

Budget Wisely 

Budget… what does that word mean to you? Well, it’s going to depend a little on your own particular mindset because it could be a positive thing or a negative one. If, for example, you assume that when you have to budget you’re going to have to sacrifice things, you’re going to have a negative view of it and not be all that happy to do it. If, on the other hand, you see budgeting as a way to get what you want and to build wealth, then you’re going to be a lot more positive about it, and that’s the way you’ll want to look at things – it’ll make a huge difference and could be what pushes you to save more. 

The key to good budgeting (especially if you don’t want to feel like it’s a chore or you’re missing out on things) is balance, and it’s a good idea to use the 50/30/20 rules as a guide to help you – that means using 50 percent of your income for essentials, like rent and bills, 30 percent for wants (as you can see, sacrifice might not be necessary – at least not as much as you thought), and then the final 20 percent is for savings or paying off debt (paying your debt should be a priority before you put money to one side for other things). 

If your budget feels tight, look for areas where you can cut back without feeling too deprived – start by canceling subscriptions you don’t use (or rarely use and won’t miss), cook more meals at home rather than going out (but you don’t have to stop entirely), and when you shop, look for coupons or deals first. It’s amazing how small changes can add up over time, and you’ll feel good about it too. 

Earn More Without Burning Out

When your budget’s tight, finding way to increase your income can change everything for the better – after all, what can help more than having more money coming in (apart from reducing your expenses at the same time)? But for a lot of people that’s just not possible – if you’re already working full-time, for example, trying to find another job is more than likely going to make you sick and then you won’t be able to work at all – you can’t push yourself too far. 

So instead of that, it’s better to look for flexible options like remote side hustles you can do from anywhere because you’ll be able to fit them into your schedule more easily, plus you might even be able to find a way to combine your main job with your side hustle and maximize your time for more money (although be careful – read your contract thoroughly to make sure you’re not doing anything you shouldn’t, and always be aware of how much you’re trying to do – if it’s too much, stop). 

Automate Your Savings 

Saving money becomes a whole lot easier when you don’t have to think about it – just like anything else in life. That’s why it’s wise to set up automatic payments from your main bank account into a savings account as soon as your paycheck goes in – even if it’s just a little bit a month, it’s a start, and it’s sure to add up faster than you think (plus, if it goes out right away, you won’t get the chance to miss it, and neither will you spend it before you have a chance to save it). 

It’s the old idea of ‘out of sight, out of mind’, and although you might think you’ll always know the money’s missing, that’s not the case – at least not after a short while. And when it’s automated and you don’t have to worry about it, you can focus on other things – check in on the account from time to time and you’ll see it’s growing without any help from you, and that’s the best feeling to have. 

Tackle Your Debt

We mentioned earlier that, although saving is good, tackling debt is better, and we mean it. Yes, it’s good to see your emergency fund or holiday money growing nicely, but if you’re still paying off a credit card or a loan, you’re not really getting as far ahead as you think. Just imagine how much money you’d be able to save if you didn’t have the debt at all – a decent amount, in many cases. So it’s better to use the money you would have saved to pay off your debt more quickly, and once that’s done, you’ll be able to save more than you would have without taking on that particular unpleasant chore. 

It’s not easy to deal with debt – often it can lead to more debt as you consolidate everything and then get tempted to use the old card again, and it just keeps getting worse. However, something has to be done to break the cycle, and it can start today. Make a list of all your debt and put the amount with the highest interest rate at the top of the list – that’s where you need to start. You can make minimum payments on everything else while you’re paying as much as you can spare on the high interest debt. Once that’s paid off, move onto the next highest interest, and so on. This is called the snowball effect, and it can save you a massive amount of money not just in how much you’re paying back, but the interest too, which can often be the worst part. Without debt, saving – and life in general – becomes easier, and once you get started, it’s not such a hard thing to do.