You can start by tracking all your expenses for a month to get a clear picture of where your money goes. Categorize your expenses into necessities (like rent, groceries, and utilities) and discretionary spending (like dining out, entertainment, and hobbies).

This will help you identify areas where you can cut back and allocate more funds towards savings or paying off debt. Regularly reviewing and adjusting your budget ensures you stay on top of your financial situation and avoid getting into unnecessary debt.

Read more: ‘They are awful’: Dave Ramsey is fed up with millennials and Gen Z who he claims don't work but want to own homes — here’s what he says you need to be a ‘successful' investor

Build a safety net

Having an emergency fund is essential for financial security — it can prevent you from relying on credit cards or loans during tough times, helping you maintain financial stability and peace of mind. This cushion will provide a buffer in case of unexpected events like job loss, medical emergencies, or major car repairs.

While Lee prefers not to know about his finances, he has built a substantial financial cushion.

He said, “I asked my money guy, ‘How long can I not work until I run out of money?’ And he goes, ‘A long, long time. So you can go a long, long time without working and you'll be fine.’”

For the average person, how large should the financial cushion be?

Personal finance expert Dave Ramsey suggests having an emergency fund that can cover three to six months worth of living expenses.

Of course, this amount may vary based on individual circumstances, such as job stability and personal financial obligations. You can start by setting aside a small portion of each paycheck until you reach your goal.

Invest for retirement

Legendary investor Warren Buffett famously said, “If you don't find a way to make money while you sleep, you will work until you die.”

In other words, if you don’t want to work forever, you need to find ways to generate passive income through smart investments.

Lee’s investments are, as you’d expect, managed by his "money guy."

“Fifteen years ago, he bought me like a condo or apartment complex or something. And we went in with a group, and it's doing well … so I just kind of like let him do it,” he said.

An apartment complex can indeed be a smart investment, offering the potential for rsteady rental income and property appreciation over time.

Of course, with elevated home prices, acquiring multi-unit properties can require significant capital today. The good news? There are real estate investment trusts (REITs) and crowdfunding platforms that provide everyday investors with access to real estate assets.

Remember, there’s no need to start big. Consistent investing, even in small amounts, is aided by compounding over time, ensuring you have a comfortable nest egg for retirement and other future needs.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.