Not only does God grant each one of us the power to build wealth, but He opens doors for us to become influential leaders who can make an impact through that wealth. How remarkable is that? When we become wise stewards of our money, we rid ourselves of greedy temptations and put our money to work for us. I always say that building wealth is simple, but it isn’t easy! At the end of the day, city and nation transformation can not occur without a kingdom economy.
You may have already spent a good portion of time searching for wealth building tips on Google, and I want to hand you the key that you’ve been searching for. Before you begin to jump to conclusions, I’m not going to give you an end-all-be-all secret solution to building wealth. However, what I am going to do is give you the tools you need to start mastering your money. The rest will fall into place as long as you’re willing to pick up some knowledge, wisdom, and understanding along the way! So hunker down, put your knowledge cap on, and get ready to read!
Become the Master of Your Money
Create a Budget
If you want to increase your income and decrease your debt, your first step is to create a personal budget. The hardest part isn’t creating a budget, it’s sticking to it! You probably know this feeling all too well. One day you’re promising yourself that you’re going to keep a perfect track record of your money, and the next day you’re staring blankly at all the Starbucks charges on your statement. What went wrong here? If I could guess, I would say inadequate planning, lack of intention, and being too strict with your money. You may be shocked to read that last part. But, if you create guidelines that you can’t realistically follow, then you’re setting yourself up for failure! It’s all about managing your money in a way that is financially practical for you.
If you want to create a manageable budget, you have to start by tracking all of your money. Grab and pen and paper, and make a comprehensive list of the cash amount you have coming in, including from your job, assets, and anything else. Now, the not so fun part is writing down all of your expenses. However, these should be necessary expenses, such as mortgage, insurance, and car payments. Once you have that down, take a look at the last few months of your bank statement and outline how much you spend on groceries, entertainment, eating out, and any other non-essential expenses.
Now here’s where the planning part comes in. Figure out exactly how much you plan to spend each month on each item. This may take some time, but it will be entirely worth it when you are able to visualize all of your expenses BEFORE the start of each month. This will help to interrupt the cycle of overspending. At the end of your list, don’t forget to add other things like saving, tithing, and investing. If writing it all down isn’t a preferred method for you, try making a note on your phone or computer. There are several nifty financial apps that can help you track your budget, too. Whatever you decide, make a plan and stick to it.
Cut Costs and Spending Habits
If saving money was easy, we’d all have a pocket full of cash! Jokes aside, saving doesn’t have to be a challenge. Just start by eliminating unnecessary expenses. I’m not saying that you shouldn’t treat yourself every now and then–everyone deserves to indulge in special moments from time to time. However, I guarantee there are a few expenses that you could cut back on or eliminate altogether if you’d just be willing to make a small life adjustment.
For example, start unplugging unused electrical devices before you leave for work in the morning. Use less hot water in your morning showers. Start packing your own meals. Cancel all those unused subscriptions. You get the point! Saving money on monthly expenses doesn’t have to have a negative impact on your life. Sometimes, even the smallest of changes will help you to notice a difference at the end of each month. I only gave you a few minor ways to save, and trust me when I say there are a lot more out there. Do some online searching for more saving tips!
Pay Off Your Debt
If you’ve read my Money Mastery book, then you know that a good portion of it talks about how to free yourself of debt and how to step into wealth. I don’t have the time to cover all of the information, but I’d like to give you the quick run-down. What I know is that there isn’t a single person out there who enjoys debt, unless it’s good debt. Debt holds us back and creates mental and financial strains in our lives.
If you’re ready to rid yourself of debt once and for all, begin by cutting up or freezing all but one credit card. I don’t recommend canceling your accounts because that could negatively impact your credit score. Instead, just stop using the accounts and work on paying them off. Once you manage to get down to one credit card, work on paying off your current charges. You ultimately want to reach the point where you can get rid of the last card altogether. Now, once you’ve completed that step, you’re going to want to start a smooth pattern of making the minimum payments on all your debts. Start to list out all of your current debts including your mortgage, car debt, credit card, school payment, etc.
Begin to list the debt, the balance, and your current monthly payment. Then, divide the minimum monthly payment into the balance and find the number of months it will take to finish each debt. Start with the debt that can be paid in the shortest number of months. Not the one with the highest interest rate! Determine your winning percentage (the extra room in your budget.) I usually suggest living on 70% while eliminating consumer debt. Ideally, you’ll be investing 10% and using 10% to pay off your debt. Take that winning percentage and apply it to the debt that can be paid off the fastest. Once a debt is paid off, apply the total monthly payment, including the winning percentage, to the next debt. Lastly, apply your vastly increasing winning percentage to your assets!
Okay, take a deep breath here. I know I brought you through all of that rather quickly. If you want the step-by-step breakdown, I strongly suggest you read Money Mastery, which dives deep into each of the nine steps mentioned above!
Invest Your Money and Gain Assets:
It might take you a while to get to this step, and that’s okay! Once you have completely eliminated consumer debt and you have more income than expenses, you can start thinking about accumulating and accelerating. In other words, investing and gaining assets. This is the “secret sauce” to the operation. This is where you take that excess income and begin aggressively investing it. Financial freedom is on the horizon at this point!
However, reaching financial freedom requires the right mindset. If you’re going to build wealth, you need to be able to accept personal responsibility, take personal control, practice creativity, develop the confidence to design your future, and adapt to succeed. Eliminating debt is a huge achievement, but you need to think hard about how you’re going to build assets moving forward. True assets include things like rent from real estate, profits from a business, capital distributions from a business, dividends from stock, etc. When you become an investor who holds many assets, you have an important choice to make. Will you build bigger barns for yourself or partner with God and put your money to work for the kingdom? Mastering your money is all about freedom, and you get to decide what you’ll do with that freedom.
God wants you to be wealthy! You can’t serve both God and money, but you can honor God by being a wise steward of your finances. Mastering your money and building wealth isn’t an easy task that can be achieved in one day. But that’s why I’m here to help lead you! When we work alongside God to build wealth and use our wealth to help others, we further His Kingdom.