Getting ahead in life and finances can be a daunting task when you’re starting from scratch. It’s hard to know what to do that will make a tangible difference and you might not know where to start.
The good news is that stacking money and growing wealth is more realistic and achievable than you might think.
You’ll need a long-term focus and a willingness to put in the effort and make the needed changes, but end result will be well worth the effort.
In this article, we’ll look at the specific things you can do to set your finances on a solid foundation.
What Does Stacking Money Mean?
When we talk about stacking money, we’re referring to the act of saving and investing your money so it grows over time. Phrases like stacking money, money stacks, stacks of money, or fat stacks are sometimes used to refer to building wealth. It generally involves 3 main components:
- Living below your means: You need to spend less than you earn so that you have money leftover to save and invest.
- Saving regularly: You need to make a habit of setting aside money on a regular basis, whether it’s every week, every month, or every payday.
- Investing wisely: Once you have some money saved up, you need to invest it in a way that will grow your wealth over time. This might include investing in stocks, mutual funds, real estate, or other assets.
While it might sound simple in theory, putting these principles into practice can be difficult. It requires making some changes to your lifestyle and spending habits, which can be tough to do.
But if you’re willing to make the necessary changes, stacking money and growing wealth is an achievable goal. Let’s look at some specific things you can do to make it happen.
Stacking Money Tips
1. Set Financial Goals
The first step in stacking money and growing wealth is to set financial goals. Without specific goals, it will be difficult to make the necessary changes to your spending and saving habits.
Think about what you want to achieve financially. Do you want to save up for a down payment on a house? Do you want to retire early? Do you want to build up an emergency fund?
Once you have a goal in mind, break it down into smaller, more manageable steps. For example, if your goal is to save for a down payment on a house, figure out how much money you need to save and over what time period. This will help you create a specific plan to reach your goal.
Your goals should be S.M.A.R.T – Specific, Measurable, Achievable, Relevant, and Time-Bound.
And while creating goals is the first step, you also need to keep your goals on your mind and check in on your progress regularly. I recommend reading your goals each day to continually reinforce them. This will help you stay on track and make the necessary adjustments to your budget and spending habits.
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2. Create a Budget
The next step in stacking money and growing wealth is to create a budget. A budget is a plan for how you’ll spend your money each month. It includes income, expenses, and savings goals.
Creating a budget might sound daunting, but it’s really not that difficult. You can use a budgeting app, a simple spreadsheet, or pen and paper to create your budget. The key is to choose something that works for you because you’ll need to stick with it month in and month out.
If you’re not sure where to start, there are plenty of resources available online to help you create a budget (like our article How to Create a Budget That Works). You can find templates, calculators, and other tools to help you get started.
Once you have a budget in place, the key is to stick to it. This means being mindful of your spending and making adjustments as necessary. It’s also important to review your budget regularly (monthly or quarterly) to see how you’re doing and make any needed changes.
3. Track Your Expenses
Creating a budget is an important step, but how do you know if you’re actually sticking with your budget? The answer is to track your expenses.
Tracking your expenses will help you see where your money is going each month. This information can be helpful in making adjustments to your budget. For example, if you see that you’re spending too much on eating out, you can adjust your budget accordingly, or make changes to your spending habits.
If you haven’t tracked your expenses in the past, it can be an eye-opening experience. You might be surprised at how much money you’re actually spending in certain areas. While this may be a painful step, it’s critical if you want to manage your money well and maximize the impact of what you’re spending.
Once you’ve started tracking your expenses, take some time each month to review your spending. This will help you see where you can make improvements.
4. Include Savings In Your Budget
One of the most common mistakes in budgeting is failing to create a line item for saving. If you’re not planning your savings, you’ll only be able to save whatever is left at the end of the month after your other expenses have been paid.
Instead, include savings in your budget as a line item. This will help you make sure you’re saving money each month, even if it’s only a small amount.
You may even want to include a few different line items that involve saving for different goals. For example, you might set aside a certain amount of money each month to go toward the down payment on a house, and you may have another line item for retirement savings. This way you can know exactly how much you’re saving for different purposes and you can line them up with your specific goals.
5. Pay Yourself First
One of the simplest and most effective ways to stack money is to pay yourself first. This means setting aside money for savings and investments before you pay your bills or spend money on other things.
The best way to do this is to have a certain percentage of your income automatically deposited into your savings or investment account. For example, you might have 10% of your paycheck direct deposited into your savings account. Or you might have $50 automatically transferred into your investment account each week.
Paying yourself first is a great way to make sure that you’re regularly saving and investing money. It’s also a good way to force yourself to live below your means because you’ll need to make do with the remaining money in your account.
6. Prioritize Debt Payoff
If you’re carrying debt, it’s important to make paying it off a priority. The interest you’re paying on your debt is money that could be going into your pocket instead of the pockets of the creditors.
There are a few different ways to approach debt payoff. One popular method is the debt snowball, which involves paying off your debts from smallest to largest. Another method is to focus on the debt with the highest interest rate first. This method is referred to as the debt avalance. For more details on the differences, please see debt snowball vs. debt avalanche.
Whichever method you choose, the key is to make a plan and stick with it. You may even want to set up automatic payments so that you’re sure you’re making your debt payments on time each month.
Once your debts are paid off, you’ll have more money to save and invest each month, and your wealth will grow much faster.
7. Track Your Net Worth
Your net worth is a measure of your financial health. It’s the difference between your assets and your liabilities. In other words, it’s what you own minus what you owe.
Calculating and tracking your net worth is an important exercise, but many people overlook it. This number will fluctuate over time, but it’s a good way to measure your progress. It’s also worthwhile to incorporate your net worth into your long-term goals, and tracking your net worth allows you to easily keep an eye on your progress.
There are many benefits of tracking your net worth, and one of the most significant benefits is that you’ll start looking at your finances differently. You’ll think about each financial decision in terms of how it will impact your net worth.
Tracking your net worth isn’t that complicated. You can use a simple spreadsheet that you update once a month, or you can use an app like Empower or Kubera that will integrate with your financial accounts and automatically calculate and track your net worth.
8. Develop an Investment Plan
The key to successful investing is to develop a plan and stick with it. This doesn’t mean that you can never make changes to your investment portfolio, but it does mean that you shouldn’t be constantly moving in and out of different investments.
Of course, there are any number of different approaches you can take. Many people prefer a simplified approach like investing in simple index funds or ETFs that give you a diversified portfolio with a single fund.
This is especially effective for long-term investors because the longer your money will be invested, the more likely it is that the market will go up over that period of time. You can see our list of the best long-term ETFs for some ideas.
Other approaches or plans may involve investing in dividend stocks or real estate. Real estate crowdfunding platforms like Fundrise have made it easy for anyone to become a passive real estate investor.
Once you have a plan in place, the key is to stay disciplined and stick with it. Review your investment portfolio on a regular basis, but resist the urge to make frequent changes. Remember, the best way to grow your wealth is to invest for the long term.
9. Start Saving and Investing Early
One of the most important things you can do for your financial future is to start saving and investing early. The sooner you start, the more time your money will have to grow. This is due to compounding, which is when your money starts earning money on its own.
It doesn’t matter what age you are, starting now is better than waiting. It’s never too late to start saving and investing, but the sooner you start, the better off you’ll be. If you’re not already saving and investing for your future, don’t put it off any longer.
10. Maximize Your Employer’s 401(k) Match
If your employer offers a 401(k) match, make sure you’re contributing enough to take full advantage of it. This is free money that can help you grow your nest egg much faster. If you don’t contribute enough to take advantage of the match, you’re essentially passing up on a free raise.
For example, if your employer offers a 50% match on up to 6% of your salary, that’s like getting a 3% return on your investment before you even factor in the market’s performance.
If you’re not currently contributing to your 401(k), talk to someone in human resources and fill out the paperwork needed to start regular contributions from each paycheck. If you’re already contributing, make sure you’re contributing enough to get the full employer match.
11. Buy Income-Generating Assets
One of the best things you can do for your financial future is to focus on buying income-generating assets. These are assets that will provide you with a source of passive income, which can help you grow your wealth much faster.
Some examples of income-generating assets include dividend stocks and real estate. With dividend stocks, you can reinvest your dividends to buy more shares, which will increase your passive income over time.
With real estate, you can use the money you make from rent to pay down the mortgage, which will eventually make the property cash flow positive. You can also use the equity in your property to buy additional properties and grow your portfolio. Alternatively, you can invest through real estate crowdfunding platforms to avoid the hassles of owning and managing property.
Of course, it’s important to remember that not all investments are created equal. You still need to do your due diligence and research any investment before you put your money into it. But if you’re looking for a way to grow your wealth faster, investing in income-generating assets is a great place to start.
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12. Start a Side Hustle for Extra Income
In addition to investing in income-generating assets, another great way to grow your wealth is to start a side hustle. This can be anything from freelancing to starting a blog. See our list of 150+ side hustle ideas for plenty of possibilities.
With so many possibilities, it’s possible to find a side hustle that incorporates your interests and allows you to make money doing something you enjoy. You can also think about your existing skills and experiences and how you can use them to make extra money.
The beauty of a side hustle is that it can provide you with extra income that you can use to accelerate your wealth-building plans. For example, you could use the extra money to pay down debt, save for a down payment on a house, or grow your investment portfolio.
Some people use side hustles as a way to make extra money, and others start a side hustle with hopes of turning it into a full-time income. If you’re not happy with your job or you’re looking to do something completely different, a side hustle can be a low-risk way to gradually work towards something different.
13. Embrace a Frugal Lifestyle
Living frugally doesn’t mean that you have to become a miser and never spend money on anything. But it does mean being mindful of your spending and making sure that your spending aligns with your long-term goals.
Being frugal allows you to make the most of the money you’re spending and have more to save and invest for the future. Essentially, it gives you more power over your money and allows you to control your finances rather than your finances controlling you.
14. Make Your Meals at Home
One of the easiest ways to save money is to cook your meals at home rather than eating out. This can be a big challenge if you’re used to eating out all the time, but it’s worth it in the long run. You may be able to save hundreds of dollars per month with this simple lifestyle change.
This also includes lunches if you’re used to buying lunch every day. You can easily pack a lunch at home and take it with you to work and save a significant amount of money. And if you typically buy coffee every day, you can make coffee at home and take it with you.
Not only will you save money by cooking at home, but you’ll also be able to eat healthier since you’ll have more control over what goes into your food. And if you’re really looking to save money, you can take things one step further and start meal prepping. This involves preparing all or some of your meals in advance so you don’t have to cook every day.
There are plenty of resources available online if you need help getting started with meal prepping, including recipes, grocery lists, and more. Once you get into the habit of meal prepping, you’ll be surprised at how much time and money it can save you.
15. Earn Cashback When You Shop
If you’re not using a rewards credit card or cashback app when you shop, you’re missing out on easy money. Rakuten (formerly Ebates) is a popular cashback app that allows you to earn rewards when you shop online at over 2,500 stores.
Whenever you make a purchase through the Rakuten website or app, you’ll earn a certain percentage back in the form of cashback rewards.
Ibotta is another great cashback rewards app that allows you to earn rewards on groceries, household items, and more. With Ibotta, you can earn rewards by scanning your grocery receipt or linking the app to a store loyalty account. You can then redeem your rewards for cash or gift cards. These rewards can add up over time and give you more money to save and invest.
Cashback or rewards credit cards are also ideal for saving money in this way. You can earn rewards for every purchase you make, which really adds up if you use a credit card for everything.
It’s important to emphasize that we’re only talking about the expenses that you would be making anyway. You shouldn’t be spending more money just to earn rewards. But if you’re mindful of your spending and only use cashback credit cards or apps for things that you would be buying anyway, you can easily save money without changing your lifestyle.
16. Take Advantage of Easy Wins
There are a few easy ways to save money each month, and I like to refer to them as easy wins. Basically, this involves making a small change that will save you money each and every month, and the amount can add up over the course of a year.
Some of my favorite easy wins involve getting rid of cable TV and switching to a low-cost wireless provider. With a number of excellent cable alternatives out there, it’s easy to save money by cutting the cord.
My wife and I cut our monthly mobile phone bill in half by switching from one of the leading providers to a discount provider. We use Cricket Wireless, but there are a number of lost wireless options out there.
17. Know Your Priorities
When it comes to personal finance, it’s important to know your priorities. Do you want to retire as early as possible? Do you want to travel the world? Do you want to buy a house?
Spending money isn’t always bad, but you want to be sure that you’re spending money in the ways that matter to you. For example, if travel is your priority, it’s ok to dedicate more of your money to traveling.
Whatever your priorities are, make sure that your spending aligns with those goals. It’s easy to get caught up in lifestyle creep and start spending more money as your income grows. But if your goal is to retire early, you’ll need to be mindful of your spending and make sure that you’re saving and investing enough money each month.
Personal finance is unique to everyone, so it’s important to figure out what your priorities are and make decisions accordingly.
18. Evaluate Your Housing Costs
One of the biggest expenses that people have is their housing costs. This includes your mortgage or rent, property taxes, insurance, and more.
If you’re looking to save money, it’s important to evaluate your housing costs and make sure that they’re in line with your income and other financial goals.
You can have a huge impact on your overall financial situation and speed up the progress toward your goals if you’re willing to downsize or relocate to an area with a lower cost of living. This could involve moving to another neighborhood in the same town, or it could mean moving across the country.
You may also want to consider refinancing your mortgage to get a lower interest rate and monthly payment. Or if you’re renting, you could look for a cheaper apartment or house.
Since housing costs are so significant, this is an area where you can make a huge impact on your overall financial situation with one change.
19. Save on Vehicles and Transportation
Another significant expense for many people is their vehicles and transportation costs.
If you’re looking to save money in this area, there are a few things you can do. First, you could buy a cheaper car or get rid of your car altogether and rely on public transportation.
You could also consider relocating closer to work so that you don’t have to commute as far. This could have a big impact on your monthly expenses, as well as your quality of life.
You might also want to explore different options for transportation, such as biking, walking, or taking the bus. Or if you have a long commute, you could look into carpooling.
20. Wait On Big Purchases
One of the best ways to save money is to simply wait on big purchases. If you can wait a few months or even a year to buy something, you might change your mind and realize that you don’t want that item anymore. Or maybe you’ll find it at a great sale price and you can get it for less.
This is especially true for things like electronics, which tend to get cheaper over time. But it can also apply to other big-ticket items like cars and houses.
If you’re patient and are willing to wait for the right deal, you can save a lot of money on big purchases. This simple tip can have a huge impact on your overall financial situation.
21. Try a Money Saving Challenge
If you’re looking for a fun and easy way to save money, you might want to try a money saving challenge.
There are many different versions of these challenges, but the basic premise is that you save a certain amount of money each week or month. The amount can be small, like $5, or it can be larger, like $50.
The key is to be consistent with your savings and to make it a habit. Once you get into the habit of saving money each week or month, it will become easier and you’ll be able to save even more.
Money saving challenges are a great way to jumpstart your savings and get on the path to financial success and you can see our list of money saving challenges for some specific ideas.
22. Take Care of Your Health
Your health is one of the most important things in your life, so it’s important to take care of it. This includes eating healthy, exercising regularly, and getting regular medical checkups.
Not only is this good for your overall health and wellbeing, but it can also save you money in the long run.
If you take care of your health and avoid diseases and other health problems, you’ll likely spend less on medical bills and other related costs.
This is an important tip to remember because your health is something that you can’t put a price tag on. It’s worth taking care of your body and mind so that you can live a long, healthy, and happy life.
23. Don’t Compare Yourself to Others
One of the worst things you can do for your financial well-being is to compare yourself to others.
If you’re always comparing yourself to people who make more money than you or have more expensive things than you, it’s only going to make you feel worse about your own financial situation. It can also lead you to buy things that you don’t need.
Instead of comparing yourself to others, focus on your own financial goals and what you can do to improve your own situation. This is a much better use of your time and energy and it will ultimately lead to more happiness and success.
Final Thoughts on Stacking Money and Growing Wealth
There are many different ways to stack money and grow wealth. But ultimately, it comes down to making smart financial decisions and being disciplined with your spending.
If you can do this, you’ll be on your way to a bright financial future. Just remember to take things one step at a time and to always stay focused on your goals. With hard work and dedication, you can achieve anything you set your mind to.