The fist step to building wealth is budgeting

When I started my wealth building journey, I was making $10.25 an hour cooking in a restaurant. When I wasn't at work, I ate top ramen and hot dogs to save money. I slept on the floor for years because I didn't want to buy a mattress. When I travelled to go climbing, I ate off the dollar menu at whatever fast food restaurant I went to. I took saving money seriously. I saved every single dollar I could. 2 years later, I had enough saved to buy 2 investment properties. I did not inherit wealth. I did not get financial help from family. I also did not have a great job, or a great salary (as you can see above). I read a few books, looked for the best investment vehicle, and kept stashing money away for future investments. Looking back to 2011, I have come a long way. I still have a long road ahead of me, but it's good to see I'm making progress. What has helped me the most on this journey is a budget.

Wealth building is a slow game. It doesn't happen overnight. In fact, you won't even notice the progress you are making until you sit down, look at your finances, and realize you've acquired a million in net worth. The most important thing to do is start. Make it a priority to pay yourself first, even if you start with only $5 a week into your investing account. Once you start using a budget, it will become a game. You start to push yourself from saving only 20% of your salary to 30%, then to 40%, then up past 50%. My personal goal for 2022 is to save/invest 70% of my monthly earnings. I'll do this by living well below my means and monitoring my expenses daily. My wife and I sit down and have monthly meetings on our budget. We discuss spending, saving, and investing plans for each month.

Using a budget, you'll start skipping those little unnecessary expenses we all make so you can save more money. You''ll start to see your savings account balance go up. Once you build up enough savings, it's time to start looking for investments. Decide what you want to invest in and make it happen. Do not ever make the mistake of hiring a financial advisor. They will take your money and make it disappear. Understanding money is everyone's job. Figure out what your risk tolerance level is and find investments that fit into that. Once you have assets, it's time to track your wealth using a simple assets vs. liabilities cashflow chart. I'll share that at a later time. This blog is just about saving money and following a budget. The only way to measure results is to follow a plan and track your progress. That's where the budget comes in.

I have attached a simple budget down below. I've kept this budget very simple and created it in excel. Throughout the years, I have tweaked it here and there. Feel free to use it if you'd like. I already put values in every cell, so you can see how the excel sheet works.

Copy of Budget.xlsx

Download XLSX • 16KB