If you have dreams of living the high life but only make an average income, you may feel like you’re never going to achieve your goals.
However, with proper planning and some smart decisions, you may be surprised by what you can accomplish.
According to CNBC, the average household income of a family living in America is a little over $50,000 a year. While this may sound like an amount of money that could quickly disappear thanks to bills, groceries, and rent or a mortgage, it’s actually quite possible to stretch this amount of income in order to pursue your goals of becoming a high roller. Here are several tips and tricks that can help you maximize your income in order to maximize your lifestyle.
Pay Yourself First
One of the most important concepts you can ever learn when it comes to personal finance is to pay yourself first. If you don’t set aside money for yourself and your goals, you run a much higher risk of spending it on something else. Keep in mind that much of how you handle money has far more to do with behavioral psychology than it has to do with logic.
This is why it’s so helpful to automate things like contributions to your savings accounts since you can set it up to happen when you get paid. If you know the saying “out of sight, out of mind,” that applies to this financial concept as well. This is because paying yourself first lets you ensure that you’re slowly building up your savings before you go about other tasks like paying bills, going out to eat, and more.
Make Your Money Work for You
Once you’ve saved enough to build up an emergency fund, it’s important that you start making your money work for you. If your money is just sitting in a savings account accruing limited interest, you haven’t invested in enough assets. However, if you start using the money you’ve set aside to pay yourself first for investing, thanks to the power of compound interest you’ll be able to exponentially grow your money over time.
In order to retire or live with less concern about your finances, you need to know that your money is stable. Growing your money in the stock market helps you make your money work for you, rather than working for your money. An online portfolio rebalancing tool can be a valuable asset when it comes to managing your investments. This is because online portfolio rebalancing helps you reach certain targets when it comes to allocations without charging you high fees that other firms charge in order to manage your money for you.
As a result, when your stock investments grow by five or six percent, you aren’t losing two or three percent of that growth to management fees.
Look the Part for Less
While paying yourself first and making your money work for you helps set yourself up to be a high roller in the future, you might be wondering about the here and now. After all, part of living an affluent lifestyle involves showing off your riches with material goods. The secret to doing this on an average income comes down to stretching your dollars as much as possible once you’ve paid yourself first.
After all, once you’ve invested a healthy portion of your income, discretionary purchases become less of a concern as long as you can save money here and there. Diamonds are always a symbol of status, and finding ways to save on diamonds can be a great way to show off your money if you know how to save.
Lab created diamonds are an ethical option for jewelry that also can save you money when compared to their earth-mined counterparts. Spend some money on lab-created diamonds to show off your wealth without spending an arm and a leg, and then you’ll really be able to show off when your investments start paying off.
