2 Insanely Simple Steps to Increase Our Wealth

Before we even start thinking about how to grow our money, it is important that we learn how to keep our existing money in our own pocket. This will then give us the platform to invest for the future.

Mark Cuban, billionaire and venture capitalist said in an interview that he feels one of the most undervalued ways to achieve our financial goals is to simply plan our expenditure carefully.

In particular, he highlighted two simple steps that we all could take to help us increase our wealth.

Pay off all unnecessary credit card debt

Recently, banks in Singapore announced that they would be increasing their credit card late payment fees to a maximum of $100. With this in mind, it is a good time to remind us how costly raking up credit card debts can be. On top of any late payment fees, banks charge an insanely high interest rate on credit card debts, which can go as high as above 25%.

People who use their credit card as a credit line to pay for something that they cannot afford will soon realise how expensive this can get. Credit cards should, therefore, be used purely as a payment method and not as a convenient line of credit.

It is vital that we do not develop a bad habit of forgetting to pay credit card bills, or not paying them in full. This can have a snowball effect in the long-term and can spiral out of control.

Spend money wisely

The second and possibly most overlooked part is spending our money effectively. This does not mean being overly thrifty or dramatically changing our current lifestyle. What it does entail is constantly looking out for the best deals and buying stuff in bulk.

It may seem silly or even unnecessary for some of us but these methods of saving money can have a huge impact on our finances.

For example, using coupons and apps to help you find the best deals can be a good first step. Buying no-frills brands that are cheaper yet provide the same assurance of quality can be another method of saving money. We can also buy items in bulk when they are sold at a discount. This is especially useful for smaller items that have a long shelf life such as tissues, toothpaste, soap, and so on.

The Foolish bottom line

Before we start investing, it is important that we sort our personal finances and ensure that we are not spending unnecessary money. By cutting out credit card interests expenses, and using some cost-cutting techniques, we can have more money to invest for the future.

Meanwhile, for more (free!) investing insights, sign up here for your FREE subscription to The Motley Fool's investing newsletter, Take Stock Singapore. It will teach you how you can grow your wealth in the years ahead.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Jeremy Chia doesn't own shares in any companies mentioned.