5 Simple Steps to Building Wealth – Canstar

One in three Australians invested for the first time in 2021, according to research by Canstar. If building wealth is one of your goals for 2022, our money expert Effie Zahos gives her top five tips to help you get started.

Credit: 99Art/Shutterstock.com.

Canstar’s Consumer Pulse Survey revealed that while a large number of people started their investing journey last year, only around two in five Australians (39%) responding to the survey said they thought they were on track to reach their retirement savings goal.

Of course, investing on its own may not be enough to help you build wealth. It’s just one of five steps Effie suggests for people who are keen to set up some good financial foundations on which they can grow their wealth.

  1. Get on top of your spending
  2. Build a cash cushion
  3. Start (or continue) investing
  4. Supercharge your super
  5. Get a helping hand from technology

1. Get on top of your spending

“It’s not what you earn that matters, it’s what you spend”. Effie says this is one of the money lessons that has stuck with her throughout her 25 years of working in finance.

“I’ve met people earning a ridiculously high income, and they don’t know where their money is going and they’re living from pay to pay,” she explains. “Then I’ve met others on a much more modest income, but because they manage their spending, not only are they putting food on the table, they’re putting their kids through school, they’re saving, they’ve bought an investment property.”

According to Effie, analysing your past spending can be a smart way of getting to grips with future outgoings.

“Have a look at what you did last year. Go through your bank statements and highlight the things that make you stop and think ‘I spent that amount on THAT?!’”

This exercise can help you identify the areas where you can cut back easily, Effie says. She also recommends trying to better understand your own money habits and behaviours as a way of getting on top of spending and your finances overall.

Creating a plan to pay down any debt you have, such as personal loans and credit cards, as quickly …….

Source: https://www.canstar.com.au/online-trading/how-to-build-wealth/