8 Steps to Start Building Wealth in 2021

Maybe you'd like to retire a millionaire. Or maybe you simply want to accumulate enough money to feel financially secure and not have to worry about surprise bills. The concept of building wealth is different for everyone, and if it's a goal of yours, the start of a new year is a great time to focus on it. With that in mind, here are some key steps to growing wealth in 2021.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

To build wealth, you'll need to not spend down your entire paycheck. And for that to happen, you may need a budget. With a budget, you'll see where your money goes every month, and you'll have an easier time identifying ways to cut back on spending to ensure that you're not going overboard.

ALSO READ: 4 Simple Steps to Nail Your Retirement Savings Goal

If you don't know how much you should be saving each month, it'll be harder to motivate yourself to make the effort. Set a monthly savings target you can work toward, whether it's $20, $50, $200, or more. In fact, it's a good idea to put a line item in your budget for savings so it stays on your radar and you remember what you're working toward.

Unplanned bills can result in debt, and debt can cost you money that prevents you from meeting your goals. That's why it's crucial to have an emergency fund -- money in the bank to pay for those costly surprises. Your emergency fund should be robust enough to cover three to six months' worth of living expenses -- though some people may feel comfortable aiming a bit higher.

The more money you waste paying interest, the less you'll have to save and invest. If you're carrying a credit card balance, factor payments beyond your minimums into your monthly budget so you can chip away at that debt quickly and free up cash.

ALSO READ: 4 Mistakes That Get in the Way of Rebuilding Your Credit

The less tax you pay, the easier wealth building becomes, because you're not losing money to the IRS. That's why it makes sense to fund an IRA or 401(k) plan. These accounts either let you contribute money on a pre-tax basis (in the case of traditional savings plans), or otherwise let you contribute on an after-tax basis but enjoy tax-free investment gains and withdrawals (in the case of Roth savings plans).

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Health savings accounts, or HSAs, allow you to set aside pre-tax dollars for near- and long-term medical expenses. HSA funds never expire, and any money you don't need immediately can be invested and grown into a larger sum. HSA withdrawals could be a key source of wealth later in life, and the fact that they're tax-free when used for qualified medical expenses is definitely a bonus. The only catch with HSAs is that not everyone qualifies, and you must be enrolled in a high-deductible health insurance plan in order to participate.

Though you won't get any tax benefits for funding a brokerage account the same way you do with an IRA, 401(k), or HSA, a brokerage account lets you invest your money as you choose, without restriction. You'll be privy to an extensive range of choices rather than be limited to the investments your retirement plan or HSA offers.

ALSO READ: Know Nothing About the Stock Market? Here's the Easiest Way to Invest

Whether you're looking at investing in a retirement plan, HSA, or brokerage account, you shouldn't do so blindly. Rather, have a plan. Figure out how much risk you can tolerate and choose investments that allow you to build wealth without exposing yourself to needless losses.

You may not end 2021 all that much richer than you start out. But that’s perfectly OK. Building wealth is a process -- sometimes, a lifelong one. The key, therefore, is to get the ball rolling so that, in time, you’re able to achieve your financial objectives and enjoy the success that comes along with that.

The Motley Fool has a disclosure policy.