How To Build Wealth When Money Is Tight

Welcome back to the monthly wealth chat, where we chat about how to build wealth and all that goes in to it! We took some time off but it’s good to be back. I say “we” because even though Jason isn’t visible in the photos much on these posts, he’s very much with me behind the scenes helping me out with these topics. If you’re new here, the monthly wealth chat is a discussion around building generational wealth and we share some of our successes/failures a long the way to building our net worth to where it is today. It’s important for me to share, because I think too many people believe financial success is not possible for them, when in reality, wealth is attainable for everyone if you’re willing to do the work.

How To Build Wealth When Money Is Tight

When I first brought this topic up to Jason his response literally was … “you can’t.” And well … that was not the answer I was looking for LOL! But truthfully, it is HARD but it’s not impossible. We were on food stamps 12 years ago, fresh out of college and living on Jason’s football stipend from SMU … WITH A BABY. We were able to make something out of nothing and I believe you can too. So today we’re going to chat about what to do when money is tight and you’re ready to start building wealth.

1. Establish a goal and actually believe it can happen

   • We’ve always sat down and talked about our wildest dreams, both financially and just for life in general. Some are crazy and at times feel unattainable, but we never stop believing in the possibility of creating something really amazing for our future generations.

2. Where is your money going?

   • This might sound like a silly/basic question, but it’s really important to understand where your money is going each day. I recently set a quarterly spending budget for myself because I realized last year that I was just kind of spending without really keeping track of things the way I was when money was tighter. It’s important to not lost yourself even when you are financially stable.

3. Maintain the same lifestyle, even when you receive bonuses and pay raises.

   • It’s so tempting to want to buy that car or get the bigger house just because you are now finally making more money. But what if instead of spending more, you invested more? In doing so, you are taking the extra money you have earned and making it work for you. I definitely believe in treating yourself, but this is something to think about before making larger purchases. I’ll never forget the year we moved from Houston. We left behind a beautiful home and moved into a humbling 2-bedroom apartment in Carrollton. I hated everything about it but if you’ve been around a while then you know that during this time, we bought two rental properties that we still own to this day. We invested in real estate and now on the first of every month, when rent is due, it’s also pay day.

4. Don’t be afraid to downsize

   • Downsizing is humbling, frustrating and not something that many people are willing to do. And to be clear, I’m not talking about only your home — it could be your car, eating out every day, shopping habits … there are so many ways to scale back your lifestyle to create more room for extra funds to become available. But in order to do so, you have to make sure you refer to point #2 – knowing where you spend your money. I was blown away while doing my taxes this year when I realized how much money I spent on Amazon. It’s something I am more aware of now, because while I absolutely love the convenience, spending thousands of dollars on things that I really don’t need is not how I want to use my money.

5. Decide how you want to start investing to build wealth

   • Whether it’s crypto, real estate, stock market or anything else, do your research and determine what works best for you. Right now we are a mix of crypto, real estate and the stock market but we have more invested in crypto than the others. Investing is a long game. It’s not a get rich quick and get out situation. We’ve had really amazing quarters and then there are some quarters where I prefer not to look. But overall, taking charge of our finances and not being afraid to take risks has paid off significantly for my family. Start small and give it a try.

In order to make money when money is tight, you have to do 1 of 2 things … make more money or spend less money. And because making more money doesn’t just “happen,” the latter option (spending less) is usually the most realistic and easiest place to start. I recently linked my bank accounts to my Quickbooks for better, more accurate tracking of my spending and it has been so eye opening. Having a really honest look at myself and my habits has helped me get a game plan together for how I want to spend my money this year and what that will look like, while also having some fun along the way.

Start where you are and build. Even if it’s saving $50 a week, you have to start somewhere right?! You got this! What are some of your goals this year? Do you have game plan that works for your family in terms of how to build wealth?