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Hello Reader,
Today's question is from "Keiza age 45”:
"I feel like everyone around me is buying homes, maxing out their retirement accounts, and talking about investments, and I'm just trying to keep up with my bills. I have a stable job, and I'm responsible with money, but I still feel stuck. Did I miss my window? Is building wealth even realistic for someone in my situation, or is it just not in the cards for me?"
Kezia, feeling like you’re behind or that everyone is doing so much better than you is something we’ve all felt at some point. In fact, this type of sentiment has a name: comparison fatigue.
This is the feeling of mental and emotional exhaustion that’s a result of constantly comparing yourself to others.
We are here to help you break away from this fatigue. It’s essential that you know at 45 you still have time, earning potential, and options.
Let's go over how you can start building wealth today.
1. Let's talk about what you're actually seeing
What people share publicly about their finances is rarely the full picture. Of course, most people brag about the positive aspects of their lives and don't mention the less glamorous aspects. When you're hearing people gloat about their financial accomplishments, remember to keep two things in mind.
One, we don't know what kind of sacrifices that person has made to achieve their. For example, they may have sacrificed their vacations or worked overtime so they could put a down payment on a house.
Two, they may not be sharing the full story. If someone shares that they've maxed out their 401K, they may have done so with an employer match program, which gave them an advantage.
While our minds can instantly jump to thoughts of "What about me?" or "I'm so behind," it's important to notice when you start comparing yourself.
Comparison will not only rob you of your joy, but it takes the focus off your path and accomplishments.
Shift your focus back onto yourself, looking at your numbers and your goals — not anyone else's. Remind yourself how far you've come to motivate you to keep going.
2. Define what "building wealth" actually means for you
When you think about building wealth in your life, what comes to mind? Is it homeownership, having a comfortable retirement, time freedom, or living in a cabin in the mountains?
We often associate wealth with a number — having a certain amount of money. However, wealth is about creating a life in which your finances support the lifestyle and goals you want.
The reality is, many people focus on wealth as obtaining objects and luxury goods that, at the end of the day, don't make them happy.
When you define what a wealthy life looks like for you, start by writing down three financial goals and put a rough timeline on each one. Break down steps you can take weekly to achieve these goals.
As you start to make progress, track that progress. This way, if you start to compare yourself, you can look back at your goals and see the progress you've made.
3. Find out exactly where you stand today
Sometimes you need a bird's-eye view to really understand where you are, what you've accomplished, and where you want to go.
Let's start by pulling together all the different aspects of your financial life. Take a look at your income from the last year or two. Do you notice any changes? Are you seeing the increase in income you hoped for?
Next, review your expenses from the last 3 months. Is your spending in alignment with the goals and lifestyle you want to achieve? Are there expenses you can cut or minimize?
Consider your debt. Do you feel comfortable paying down your debt? Is there a way you can decrease your debt faster?
After reviewing your expenses and income, take a look at your savings and retirement account. Do you have emergency savings? Have you set up the best retirement plan?
Once you've got a clear financial picture, calculate your net worth. This might feel uncomfortable, but if the number isn't where you want it, knowing your net worth can give you a good baseline and a place to start.
Remember that knowledge is power. When you understand your financial situation, you can create a better future for yourself.
4. Start investing with small amounts
Now let's talk about investing. You may have heard that the best time to start investing was yesterday. However, don't be discouraged; the second-best time is today.
Particularly at 45, you have many years of potential compound growth ahead of you.
The simplest way to get started with investing is with a workplace retirement plan. Even starting at 3–5% can make a difference, particularly if your employer matches contributions.
If your workplace doesn't offer a retirement plan, then look into opening a Roth Individual Retirement Account(aka a Roth IRA) or a Traditional Individual Retirement Account (a Traditional IRA).
As you start investing small amounts, over time you can increase your contributions, thus increasing your earnings.
5. Tackle the "stuck in survival mode" feeling
Most of us have lived in "survival mode" for a time in our lives — beans and rice for dinner every night, mixing water with the five drops of shampoo you have left just to make it last longer, having $10 to your name after paying bills. We all had to make a dollar stretch.
What can hold us back financially is getting stuck in survival mode. This can happen because of mindset, income, and cash flow.
You say you have a stable job and are good with money, so you might not be feeling stuck around how much you earn, but more so around how you think and behave with money.
For example, living paycheck to paycheck might mean you have some money leaks in your budget. There might be subscriptions or services that you're paying for that you don't use or benefit from.
Your money also might be getting eaten up by small, consistent purchases you make that add up to large amounts over time.
Likewise, there might be income opportunities you're missing out on because you're scared to ask for a raise, you don't know how to start a side hustle, or you're sitting on an income opportunity that feels intimidating.
To free yourself from survival mode, start taking these steps forward:
- Review your budget and track your spending so you know exactly where your money is going. If you realize you're paying for things you don't need, redirect that money toward your savings.
- Find ways to increase your income. The simplest way is to ask for a raise. Consider a promotion you can apply for. Also consider your current skill set and see how you can create a side hustle doing what you're already good at.
- Set a goal each month to try to increase your income. If you can free up even $100–$200 a month, that can go toward wealth building.
The key is to create a system that works for you so you can see consistent results.
6. Build your wealth foundation in the right order
Speaking of systems, let's break down how you can start building wealth today.
Step 1: Emergency fund of 3–6 months
One car accident, medical emergency, or broken pipe can derail your finances if you're not prepared. Setting up an emergency fund of 3–6 months of living expenses by scheduling monthly auto-deposits to your savings will make your life easier.
Step 2: Pay off high-interest debt
Don't be complacent with your debt. Having debts with high interest rates will eat away at your paycheck, taking a bigger chunk each year. Start paying more than just the minimum so you can pay off debt faster. Likewise, you can look into refinancing your debt for a lower interest rate.
Step 3: Invest consistently, even in small amounts
Within your budget, consider how much you can consistently invest, even if it's as small as $25. Remember there are various ways to invest — whether through your retirement account at work or through an individual savings account. The most important part is saving consistently so that you can see your investment grow over time.
Step 4: Build additional income streams over time
Sustainable income isn't built overnight. Making mini goals to start building your income streams every month will help you develop reliable streams of income over time. Simple steps you can take include:
- Learning a new skill or advancing the skills you already have
- Understanding the basics of building a business
- Learning about different side hustles
- Networking with other professionals
By taking small, consistent steps toward building your wealth, you'll start to see a stronger financial future. Remember that real wealth building isn't a sprint to the top. It's moving at a steady pace, creating habits, and making better decisions so you can secure long-term wealth.
Expert tip: We mentioned automation earlier because it's one of the simplest ways to stay on top of your finances. Whether you're setting up automatic transfers to savings and investments or automating bill pay, having part of your financial life taken care of will make managing your finances that much easier.
Kezia, we want to remind you that you're not behind. Your wealth-building journey might not look like everyone else's, but what's most important is that you started.
The women who build wealth aren't always the ones who started earliest. They're the ones who started deliberately and stayed consistent.
And as always, we're here to help. You can check out our free courses on investing to help you better navigate your wealth-building journey.
Want to take teaching your kids about money an extra step? Check out our free course on how to teach your kids healthy money habits.
You can also schedule a free mentor call at anytime as a member of our course platform.
Be sure to check out our Clever Girl Finance course community, and our Instagram channel.
If you’re looking for more specific accountability, working with a Clever Girl Finance coach or mentor can also be a great option.
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Check out this YouTube video on:
The real reason you can’t stay financially disciplined (And how to make it easier)
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Talk soon ❤️
Team CGF
( Bola & Kiersten)
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