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There are many reasons why my finances are in good shape. In coming up with a list of those reasons, I noticed that a few were key to my getting ahead. I call these my wealth accelerators because they have had a dramatic effect on my net worth. Without these I would still have a positive net worth, but it wouldn’t be anywhere near where it is. Your wealth accelerators may not be the same as mine, but I suspect that many of these are common to most people.

Budgeting
Creating and following a budget can help nearly any financial situation. Gaining insight into your finances gives you the power to make positive changes. By analyzing my spending and following a detailed budget, I have been able to dramatically improve my positive cash flow each month. Using that extra cash to pay down debt or fund investments has multiplied the positive effects of budgeting.

Getting Married
This was probably my greatest wealth accelerator. It’s logical that the expenses of two people should be less than the sum of their individual expenses. This stems from that fact that many expenses can be shared. Housing is a great example: You can easily rent a two bedroom apartment for much less than renting two one bedroom apartments. I noticed other expenses going down as well. As a married man, my car insurance for two cars was actually less than what I had been paying for my one car as a single guy. I guess getting married showed the insurance company how responsible (and thus less of a risk) I had become. Getting married won’t always accelerate your wealth. Even though your expenses may be less than twice your individual expenses, your spouse’s income and financial mindset are also a factor. I can attribute getting married to accelerating my wealth in part because my wife makes roughly the same amount of money as I do, and has a similar outlook on our finances. For us, getting married meant that our income doubled while our expenses actually went way down.

Getting Rid of High Interest Debt
I have never had a lot of high interest debt, but when I did, I paid it off as quickly as possible. Making double or triple payments each month allowed me to get rid of this debt in about 1/10th the time making the normal payment would have taken. Forgoing savings and investments that had lower potential returns, to pay down debt at a know high rate, has always served me well.

Leveraging Good Debt
Low interest debt has helped me to get ahead. An example was using a HELOC to come up with an extra 10% when purchasing my first home. The HELOC proceeds brought my total down payment to 20%, allowing me to avoid paying PMI. Paying off the HELOC quickly, even though it was at a reasonably low rate, allowed me to save a lot of money. The interest I ended up paying before the HELOC was repaid was significantly less than I would have paid for PMI if I hadn’t used that method.

Another example of leveraging good debt is my mortgage itself. By taking on mortgage debt, I am able to live in a nicer home than I could rent and my monthly payment is actually less than I would be paying to rent. Not only that, each time I make a mortgage payment I’m increasing the equity in my home.

Which wealth accelerators do we have in common? What others have you used to get ahead?