My seven-step guide to how you can build your wealth

Q HOW can I improve my financial situation?

A HERE are seven ways to improve your financial position and build your wealth.

1. Have a plan

Know what it is you want and where you are starting from. Start by calculating your net worth, what you own less what you owe.

2. Make your finances automatic You should automate your finances as much as you can. Ensure you set all regular bills with direct debit or standing order.

3. Take advantage of your employers’ retirement scheme Every employer in the country now offers a workplace pension. If you meet certain criteria (age 22 to state retirement age and earning over £10,000pa) you will be automatically enrolled into the scheme.

If you don’t meet these criteria your employer must still allow you to join, if you ask, and in some instances, they need to contribute.

4. Check your spending

You need to spend less than you earn and invest the difference for compound growth overtime.

Arrange for bills to be paid from your bills account and ask yourself; Do I need this payment? Do I want this payment?

Can I get a similar experience for less?

5. Make the most of your money

It makes no sense having money on deposit earning 0.1% and credit card debt costing 15%, repay your unsecured debts first.

If you have no debts, you should hold between three and six months of your expenditure on deposit, and then invest the rest.

6. Make investing a priority

Your first payment from your bills account, should be from yourself, to yourself. Better still, have this automatically deducted from your salary into your workplace pension scheme. Look at your expenditure sheet, if you’re paying more on car payments or holidays than your retirement, you have your priorities the wrong way around.

7. Be patient

It will take time to become wealthy. Invest globally using index funds, keeping your fees low and diversify. Look at Lexo.co.uk for examples of professionally allocated portfolios.

Warren Shute is the author of the bestselling personal finance book The Money Plan. Get his free money guides at warrenshute.com