The recipe for building wealth hasn’t changed

Building wealth has gotten harder for most people in recent years. But the habits that can make you rich haven’t changed.

It boils down to this: putting aside money, regularly and consistently, that can be invested for your future. You have to leave that money alone to grow, which means you also need an emergency fund. And you must be careful with debt, because the wrong kinds can erode your wealth rather than build it.

It’s a simple formula but one that’s become increasingly hard to implement as incomes stagnate and prices rise. A shocking number of American households — nearly half, by the Federal Reserve’s last count — don’t have enough savings to cover an unexpected $400 expense. Our inability to save has contributed to a 21 percent decline in household median net worth between 1998, the year median incomes peaked in America, and 2013, the last year for which Fed stats are available.

Hardest-hit are households in the lower middle class, which in 2013 meant incomes from $23,300 to $40,499. Their net worth fell by half.

In my latest for the Associated Press, how to use the habits of wealthy people to build for your future.

Tuesday’s need-to-know money news

Household-Budget1Today’s top story: Money tasks to tackle during your winter break. Also in the news: How to save thousands on a divorce, getting in the savings habit, and why your new tech toy could be a security threat.

3 Money Tasks to Tackle on Your Winter Break
Assessing the holiday damage.

Getting Divorced? 5 Ways To Save Thousands
January is the start of divorce season.

Get Into the Savings Habit by Putting Away 50% of Your Extra Income
Even if it’s just the change in your pocket.

Could Your Holiday Gift Be a Security Threat?
Hackers can’t wait to get at your new tech toys.

Friday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s big story: What you can get removed from your credit report. Also in the news: How to tell if your partner is a sound financial match, which Olympic medal would your savings plan win, and why online dating can be hazardous to your wallet.

What Can I Get Removed From My Credit Reports?
Patience is key.

Want To Know If Your Partner Is A Financial Match? Take These 8 Steps
Financial compatibility is crucial in a relationship.

Which Olympic Medal Would Your Savings Habits Win?
Go for the gold!

The Financial Risks of Online Dating
That dreamboat on the screen could actually be a nightmare.

How I went from $50,000 in debt to $50,000 in savings
It can be done!