3 Simple Steps to Building Wealth — Even When You Live Paycheck-to-Paycheck
Building wealth is a simple math equation.
Money in equals money out plus money saved and invested. The more you save and invest, the more wealth you build. Simple.
But many people find following this equation really challenging and are living paycheck to paycheck even with a high salary.
There is even a term that was coined in a 2003 Fortune Magazine article describing a segment of people who earn very high salaries and are still living paycheck to paycheck. There are many articles out there suggesting that HENRYs can’t build wealth because of:
High Cost of Living
Inflation
Other reasons that create a situation where it’s difficult to build wealth regardless of how much money you earn like student loan debt, home prices, expectations, etc.
And although all of these factors are valid enough to be looked out for, I have one major problem with all of them:
They take away the individual’s personal power and responsibility over their own financial destiny.
I am in full belief that your circumstances do NOT create your reality and that every single person has the power to change their life no matter their background, their financial knowledge, or their current financial circumstances.
If you don’t have the financial life you deeply desire and are living paycheck to paycheck feeling like you can’t get ahead and build wealth, I understand how easy it is to blame these outside factors. Going to the grocery store and pumping gas has never been so expensive. Housing prices are exorbitant and on the rise. Buying anything these days costs more than ever. I get it. I feel it, too. AND you still have the ability to build wealth. No matter what.
In this article, I am going to go over the three life-changing steps to building wealth even if you are living paycheck to paycheck.
Step 1: Identify and Overcome Your Money Blocks
First, what is a Money Block? Money blocks are negative beliefs about money that were programmed into your subconscious mind and sabotage your ability to achieve your financial goals.
These beliefs came from childhood experiences and were reinforced by societal messaging about money. Money blocks manifest in many ways such as undercharging for your services, overspending, avoiding looking at your accounts, or feeling like building wealth is too complicated and impossible because of your cost of living.
Healing through these money blocks is essential for breaking the paycheck-to-paycheck cycle.
But first, you have to identify what is blocking you, and then take the steps to overcome them so you can free yourself from feeling financially trapped and start building wealth.
Here are 3 tips for identifying your money blocks:
Write a list of everything you remember hearing about money as a child. How did your parents talk about money? What were the dynamics at home? Was your dad always working? Did your mom buy you gifts instead of spending time with you? This will give you insight into what you learned about money as a child.
Write a list of every thought and feeling you have about money. Allow yourself to fully express without judgment. For example: “Making money is hard” or “Everything is too expensive” or “I could never make that much money” or “Why is it that even though we make a lot of money there still never seems to be enough?”. Write a list as long as you can and look for patterns.
Write out big financial goals like buying a house for example that feels out of reach. Then complete this sentence: I want to buy a house, but I can’t because ___________.
Whatever you wrote in the blank will give you insight into a money block. A limitation that you created in your mind that you can ABSOLUTELY overcome.
Here are 3 tips for overcoming your money blocks
Realize these beliefs about money were given to you as a child and are not inherently true, and you have the power to change your mind and adopt new, empowering beliefs.
Write down 5 beliefs you have about money that limit you. Ask yourself how they are NOT true. Feel this possibility in your body, and then write next to each limiting belief a positive alternative.
As an example:
Limiting belief: “Rich people are bad people”
How is this not true? Some rich people are good people.
Empowering belief: You can be a good person and be rich. I am a good person and can be rich.
Take these 5 new, empowering beliefs as your affirmations and speak them to yourself in the mirror every day. Feel in your body how this is true. If you feel resistance coming up when you speak these beliefs, go back to the original limiting belief and remind yourself of the possibility that perhaps it’s not true. Your subconscious mind needs repetition and help to release the old and adopt the new beliefs.
Next up, create a vision for your dream financial life.
Step 2: Create a Vision For Your Financial Future
Once you feel confident in your new, empowered beliefs about money it’s time to create a vision for your financial future that is so good you won’t be able to wait to make it a reality.
This is where you get to dream big. Write a list of your dream rich life. Is it to own a million-dollar home? To take lavish annual vacations? Have enough saved and invested to pay for your kid’s college? The possibilities are endless. Write it all out and have fun coming up with your ideal wealthy life.
Include in your vision:
Why each of these things is so important to you
What feelings you’ll get by having them
And then the extra fun part: imagine yourself already there. See what you see, feel what you feel, hear what you hear. Close your eyes and experience everything once you’ve created this dream, rich life.
I have a Free Money Visioning Workshop that helps guide you through this process. Watch for FREE here.
Once you have a CLEAR vision for your dream rich life, and you’ve already overcome many of your money blocks, then you’ll know it’s possible you can achieve it all.
Feeling like it’s fully possible is an incredible first step, and now you get to take action. You’ve been living paycheck to paycheck and you are ready to break the cycle and start building wealth.
Step 3: Create a New Financial Equation
Now that you have released your money blocks and have a clear vision for your future that you are excited about manifesting, now it’s time to create a new financial equation to make it all happen.
As I mentioned earlier, to create wealth you need money in = money out + money saved and invested.
If you are living paycheck to paycheck your equation is money in =money out.
So it’s time to make a new one.
4 steps to creating a new financial equation
Write your monthly net income at the top of a piece of paper.
On the same page, list out the goals that you created in your vision (downpayment on a house, annual vacations, multi-million dollar retirement, kid’s college fund, etc) and how much money needs to fund these goals, and how much each month you want to put towards them.
List your monthly fixed expenses (rent, mortgage, utilities, car payment, etc.) Lower this number by canceling any subscriptions or extra expenses you don’t actually care about
Any extra is guilt-free spending
New equation: Money in = Money out to goals + Money out to expenses + Guilt-Free spending
In conclusion
Building wealth is a simple math equation, but for many, it feels incredibly challenging to do based on external circumstances outside of our control.
The main takeaway is that you ARE in control of your financial reality and destiny. Whatever your circumstances are you have the power to change them with your mind.
The steps outlined in this article will get you started on the journey to taking back your financial power and start building wealth.
If you’d like personalized support in creating a plan to overcome your money blocks, creating a vision for your future that feels easily attainable, and setting up a new financial equation that feels easy, doable, and sustainable, then I invite you to sign up for a FREE Money Strategy session with me.
On this complimentary call, I’ll help you identify your money blocks and create a high-level plan you can use to overcome your blocks and attract abundance into your life and business.
Sign up here. I can’t wait to support you!
