Money is our biggest wealth building tool. Freeing up more money in your budget and investing it will build you more wealth in the long term. Forgoing your daily coffee from the local coffee shop will save you money. Turning off your lights will save you some money. But what can you do to save larger amounts of money in a shorter amount of time?
Here are 3 strategies to build wealth quickly:
- Shop around for insurance and do it yearly. This is one of the quickest ways I have added money to my monthly budget. Car insurance and home owners insurance specifically. Last time I shopped car insurance I was able to go from $190 per month or $2280 per year to $92 every month or $1100 per year. That is a savings of $1180 for the exact same coverage by spending a few hours of my time. Don’t forget to see if there is a discount for paying 6 months or a year at a time.
- Downgrade your car. Note that there are plenty of safe, reliable cars under 10K. If you are driving anything more expensive it may be time for a downgrade; especially if it is financed. When you have a financed car your car insurance is typically more. This is because the bank that you finance your car with will require full insurance to protect their asset aka the vehicle.
- Make your housing less expensive. This one is probably the least appealing. Moving is not fun for anyone but by moving somewhere that is even a few hundred dollars less can free up so much of your budget, getting you to your goals! If you own a home, you can always get a roommate or rent a portion of your house out. My husband and I did this temporarily. We sold our house and used the money we received to pay off all of our debt. We then moved somewhere temporarily (7 months) where the rent was $500. We were able to start investing and save up a large emergency fund.
These are all difficult, uneasy tasks. By doing even one of these three things, the extra savings will help you reach your financial goals quicker. Everyone’ journeys look completely different but the more money you free up now the sooner you will get to financial independence.
