How to Start Building Assets
- Building assets takes time.
- Your financial journey requires small steps to build your savings and reduce debt over time.
- Below are practical actions that will help you to build assets.
How to Start Building Assets
Building assets takes time--a lifetime really. Your financial journey requires small steps to build your savings and reduce debt over time. Here are practical actions that will help you to build assets:
Balance your budget
Your budget is the building block to building assets. To start building savings, you need to spend less than you make. Get real about your budget if you are not able to build savings. Understand whether your income is too low or your spending habits or debt are keeping you from hitting savings goals. Make adjustments as needed so that you can start saving, even if it feels like a small amount.
Create an emergency savings fund
A savings account is the most simple form of building assets. After you have worked on your budget, you want to stash away at least one month’s worth of expenses. You can continue to build your savings over time.
Contribute to your workplace retirement account
If your job offers a retirement account, then you want to start setting money aside for your future. Some employers will match your retirement contribution up to a certain percentage. For example, if your job matches 100% at 5%, then if you contribute 5% of your income to the workplace retirement account, your job will match your 5% contribution. You will have 10% being deposited into your account. A match is free money that you don’t want to miss out on. If you cannot contribute to the full match, then you want to start with what you can afford and set a goal to get the full match.
If your workplace does not offer a retirement account, then you can open your own and start saving on your own using an IRA.
Pay off high-interest debt
Anytime you get rid of debt payments, then you are freeing up your money that can be used to help you build savings. Once you get rid of your debt balances, roll over at least a portion, if not all, of the old debt payment to your emergency savings or your retirement account.
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