When you’re just starting your financial journey, the road to wealth can feel overwhelming. One of the most common questions I get is: “I’m stuck and my net worth isn’t going up — what can I do?” That feeling? Totally normal. You’re not the only one.
In this guide, I’ll break down the four foundational steps to help you reach your first $10,000 in net worth. These are practical, proven steps that lay the groundwork and I think if you get these right you’re going to have a lot of financial success down the road. Whether you’re starting from zero or climbing out of the red, these steps will help you build momentum and confidence.
Let’s be clear: your first $10K in net worth is arguably the hardest to earn. That’s because at this stage, you’re likely still figuring out your income, your spending habits, and how to save and invest wisely. But once you hit that milestone, your financial growth can start to snowball. So, let’s dive into the first step you need to take if your net worth is currently under $10,000.
Step 1: Know Where Your Money Goes
While this advice may seem basic, it’s often overlooked. Many people don’t realize just how disconnected they are from their daily and monthly spending habits. My experience in talking to a lot of guys online and in person one common thread that I see is that frequently people don’t know where their money is going and they’re also a little bit unsure of how to prioritize that money. Tracking your expenses is the foundation of smart money management.
According to recent data, 65% of Americans live paycheck to paycheck, with leading causes being high monthly bills, lack of budgeting and financial planning, low income, and rising costs of living. These realities are discouraging, but the good news is that some of these causes are within your control—particularly how you budget and plan your finances.
Let’s start with the basics. To gain clarity on your spending, take out a blank sheet of paper or open the notes app on your phone. For the next two weeks, simply jot down your daily expenses. You don’t have to record every cent—just reasonable estimates. For instance, if you spent $5 on coffee, $40 on groceries, or $20 on utilities, write it all down. Over time, this will give you a bird’s-eye view of your spending patterns.
Once you complete this exercise, you’ll start to see where your money is going—and where it shouldn’t be going. This is the beginning of your personal budget, and it’s incredibly valuable. After adding up your essential bills and discretionary spending, ask yourself: Where can I cut back? What expenses actually bring me joy or value?
For example, I personally enjoy playing the guitar.It is something that brings me joy and helps me relax. Occasionally, I might spend money on guitar strings, accessories, or even a new pedal—these costs can add up to around $100 or so in a month. But I’ve made a conscious decision to prioritize this hobby because it’s meaningful to me and contributes positively to my well-being. On the flip side, I don’t find much value in streaming services like Netflix, so I’ve cut those out. When your net worth is still under $10,000, it’s important to be cautious about adding recurring expenses that don’t add real value to your life. Every purchase should be weighed against your broader financial goals; especially in the early stages of building wealth every dollar should serve a purpose.
The idea is intentionality. You don’t need to eliminate all pleasures, but you should prioritize spending that aligns with your values and eliminate waste. It’s usually the simple habits and everyday choices that will add up to more savings. so for example Opt for water instead of soda, Instead of buying a book at your local bookstore perhaps go to the library and check out a book for free and instead of door dashing or ordering Uber Eats multiple
times per week like I’ve probably done in the past you want to try cooking meals at home all of these habits will add up and compound over time and you’ll slowly be able to accumulate your savings more than you realize.
Ultimately, your goal should be to save at least 10% of your paycheck every month.
Step 2. Invest in Yourself
The second key step to growing your net worth—especially when you’re just starting out and aiming for that first $10,000—is to invest in yourself. Once you’ve gained clarity on your spending and created a basic budget, the next big move is to start increasing your income. Many people who live paycheck to paycheck do so not because they lack discipline, but because they’re simply not earning enough. Boosting your income doesn’t always mean making a massive leap. Even a small raise—from, say, $20 an hour to $22 or $24—can make a significant difference over time.
When we talk about “investing in yourself,” we’re talking about building skills and gaining knowledge that can help you earn more. Think of it as planting seeds for future financial growth. This could mean taking a course, earning a certification, or simply learning something new in your field that sets you apart.
For example, if you work in logistics or transportation, becoming a Certified Automotive Fleet Manager can raise your median salary from around $55,000 to over $70,000 per year, according to a study by Monster.com. That’s a substantial income jump—just from adding a credential that boosts your expertise and marketability.
But what if you don’t have time or resources for formal education right now? That’s okay. There are plenty of more accessible ways to start increasing your income. One practical, short-term approach is to pick up a side hustle—anything from freelancing, tutoring, selling handmade items online, to offering services in your neighborhood. If you can carve out just 2–5 hours a week to work on a side hustle, that can add up to an extra $150–$200 a month—money that can go straight into your savings.
Personally, one of my early side hustles was flipping furniture. I used to browse Facebook Marketplace and Craigslist looking for small, used furniture items like media consoles or end tables. I’d first check the free listings (you’d be surprised what people give away!), and if nothing stood out, I’d explore the low-cost listings. If I saw a piece selling for $10, $20, or maybe even $50, and I believed it could be resold for a higher price, I’d grab it. My two main criteria were: 1) Can I easily transport it? and 2) Does it have a high perceived value?
Media consoles, for instance, were perfect—they’re usually lightweight, easy to photograph nicely, and in demand. I once picked one up for $50 and flipped it for $150 within a few days. Even doing this two or three times a month while working a full-time job brought in an extra $250–$300. It wasn’t glamorous work, but it was effective—and it helped me build momentum on my path to financial independence.
The bottom line is Whether it’s professional development, certifications, or side hustles, investing in yourself is one of the most powerful ways to improve your finances.
Step 3. Establish an Emergency Fund
Once you’ve started tracking your spending and taken steps to boost your income, the next smart move on your journey to building your first $10,000 in net worth is to establish an emergency fund. This is one of the most essential financial safety nets you can create it’s a powerful tool that helps prevent financial setbacks from derailing your progress.
So what is an emergency fund, exactly? As the name suggests, it’s a stash of money reserved strictly for unexpected situations—think medical emergencies, job loss, urgent home repairs, or surprise car trouble. It’s not meant for vacations, shopping, or impulse buys. This is your “break glass in case of emergency” account.
A good rule of thumb is to save 3 to 6 months’ worth of living expenses. If your basic monthly costs—like rent, food, utilities, transportation—come to around $2,000, then you should aim to have between $6,000 and $12,000 set aside. That might sound like a lot, especially if you’re starting from zero, but don’t let that discourage you. This isn’t something you need to build overnight. The key is consistency—just start putting away a little each month and let the habit build over time.
One practical tip that can make a huge difference in keeping this fund untouched: keep it separate from your main checking account. If the money is sitting in your everyday account, it becomes too easy to “accidentally” spend it. Instead, open a high-yield savings account, which serves two important purposes:
- It’s harder to access, which creates a healthy friction between you and that money.
- It earns interest, which means your savings are actually growing while they sit there.
For example, let’s say you manage to save $5,000 and keep it in a high-yield account with a 5% APY (a rate that’s still fairly common as of now). That could earn you $250 a year in passive income—money you didn’t have to work for, just for being smart with your savings.
To make the process even easier, set up automatic transfers from your checking account into your emergency fund. Treat it like a bill you pay to your future self. You can even time the transfers with your payday so the money moves out before you get a chance to spend it. This strategy mirrors the way 401(k) contributions work—your employer deducts savings before your paycheck hits your account, which removes the temptation to spend.
Humans are surprisingly adaptable. If $100 were magically deducted from every paycheck starting tomorrow, it might feel tight at first—but chances are, you’d figure it out and adjust. That’s the power of automation. Once it’s in place, you won’t miss the money—and you’ll feel a lot more secure knowing you have a growing financial cushion for life’s surprises.
Aright, let’s move on to the next thing to focus on when your net worth is still under $10,000. You might be thinking, “Is it time to start investing?” Well, not quite yet. If that was your guess—you’re actually jumping ahead. While investing is a critical part of long-term financial growth, there’s an even more important step to tackle first: eliminating high-interest rate debt.
Step 4. Eliminate High-Interest Debt
The next smart move on your journey to reaching your first $10K in net worth is to eliminate high-interest debt—specifically, any consumer debt with an interest rate of 15% or higher.
At this stage in your financial journey, paying off high-interest debt is one of the most effective and reliable ways to grow your net worth. Why? Because when you’re carrying a balance on something like a credit card with an 18% APR (or even higher), that debt is actively working against your net worth every single day. It’s like trying to fill a bucket that has a hole in the bottom—no matter how much you pour in, it keeps leaking out.
Let’s put it in perspective: the stock market historically returns around 8–10% annually. That’s great in the long run, but it’s also not guaranteed and can fluctuate year to year. Now compare that to a credit card charging you 18.99% interest. That’s a guaranteed negative return on your money if you don’t pay it off. In other words, paying off that debt is like giving yourself a risk-free, guaranteed return of 18.99%—which is far better than anything the market can promise.
So if you have, say, $100 in extra cash at the end of the month, and you’re trying to decide between investing it or paying down that credit card, the smarter choice is always to pay down the high-interest debt first. Not only does this save you money in interest charges, but it also reduces stress. Let’s be honest—debt weighs heavily on your mind. Getting rid of it frees up mental energy, improves your financial flexibility, and gives you a stronger sense of control.
Some people find it helpful to organize debt payments with either the avalanche method (paying off debts with the highest interest rate first) or the snowball method (paying off the smallest balance first for a motivational boost). Whichever strategy works best for you, just make sure that high-interest consumer debt—especially credit card debt—is at the top of your priority list.
If you’re currently making only minimum payments, it’s time to take a hard look at your budget and see where you can squeeze out some extra money to go toward those balances. Every extra dollar you throw at high-interest debt is a dollar that stops working against you and starts working for you.
And here’s the best part: once that debt is gone, your freed-up monthly cash flow can go straight into investments, or other financial goals—giving you powerful momentum toward building your net worth.
Bonus Tips to Hit Your First $10K (and Beyond)
Okay, so now that we’ve covered the core steps for building your net worth up to $10,000, I want to share a few bonus tips that can help you get there even faster. These are practical, mindset-focused strategies that I’ve personally found helpful—and the best part is, you can keep using them well beyond the 10K mark, as you work toward $50K, $100K, or more.
1. Break the Big Goal Into Smaller Chunks
If saving up $10,000 feels overwhelming right now, the best thing you can do is break it down into smaller, more manageable milestones. Think of it like running a long distance. When you’re getting tired, instead of focusing on how much farther you have to go, you pick a short-term target—like a stop sign or mailbox down the road—and push yourself just to reach that. Once you’re there, you pick another one and so on and so forth you’re basically kind of tricking your brain into running a little bit longer.
Apply that same principle to your money goals. Maybe your first target is just $500. Once you hit that, getting to $1,000 will feel much more doable. From there, you aim for $2,000, then $5,000, and so on. It’s all about gaining momentum, and these small wins will build your confidence and motivation along the way.
2. Use the 2% Rule for Spending Decisions
Here’s a really helpful rule of thumb I like to use: If a discretionary expense costs more than 2% of your total net worth, pause and really think about it before you buy.
Why 2%? Because it keeps your spending in proportion to your financial progress. For example, if you’ve built up $10,000 in net worth, then any non-essential purchase over $200 should trigger a moment of reflection. Ask yourself: Do I really need this? Will it bring me lasting value? You might even give yourself a “cooling off” period—wait 24 hours, 7 days, or even 30 days before pulling the trigger.
Now, this rule makes a lot more sense as your net worth grows. If you’re just starting out with under $1,000 to your name, then 2% is only $20, which you’re probably spending regularly anyway. But once you’re closing in on that $10K mark, this rule will really try to keep your spending in check and help you protect your growing wealth. And later on? as your net worth
increases even more we might actually have to change this rule to the 1% Rule and then therefore every expense that is 1% of your net worth needs to be thought about a little bit further. The idea is that you don’t want to make too many discretionary expenses that are going to kill your net worth compounding
3. Try Paying in Cash for Discretionary Items
This next tip might sound a little old school, but hear me out: try paying in actual cash, especially for day-to-day or discretionary spending.
When you use a card—whether it’s debit or credit—it’s easy to detach from the feeling of spending real money. But when you physically hand over cash, it hits differently. There’s a kind of pain of payment that makes you more mindful. You really feel that money leaving your wallet, and that can trigger a behavioral shift. You may start second-guessing whether that item or snack or impulse purchase is really worth it.
Even just taking out a set amount of cash at the beginning of the week for your “fun” or flexible spending can make a huge difference. Once the cash is gone, it’s gone—and that kind of visual boundary can be much more effective than checking your balance on an app.
Final Thoughts
Getting to your first $10K in net worth might seem like a big hill to climb—but with the right mindset, simple steps, and a bit of consistency, it’s absolutely doable. Remember, everyone starts somewhere. What matters most is that you’re taking action today to build a better tomorrow. So keep learning, stay disciplined, celebrate your small wins along the way—and trust that the momentum will build. You’ve got this!
