Life is full of seasons. There are times in life when it's harder to build wealth, such as when you're a student, or you have a new-born child. And there are times in life when it's easier, such as when you're an empty-nester and have paid off your mortgage.
There are a number of life events that can put you in a position to turbocharge your path to wealth creation. It's worth being aware of these situations and taking advantage of these opportunities when they arise. If you're not mindful, you might find that the excess cash you have gets eaten up in lifestyle expenses that, while nice, may not necessarily be aligned with what you want to achieve over the long-term.
Whenever you get a decent raise.
If you're used to living on a certain level of income, a raise is a bonus - you have money that you previously didn't need. Consider pre-committing to saving a portion of any future raises, which over time, will result in the percentage of your income that you save continuing to increase.
When you couple up for the first time.
When two people move in together, they often find that many of their expenses reduce. You often find that something that you would've had to buy on your own, is now effectively half the price because you're sharing the item and its cost. It's valuable to use this as an opportunity to increase your savings.
When you pay off your student loan.
If you have a New Zealand student loan and you're working in New Zealand, you effectively have a 10% additional tax on your income in the form of student loan repayments. Once the loan is repaid, you essentially get a 10% pay increase. If you were able to live without this 10% before, it's a good idea to "pay yourself first" and let it bump up your saving rate.
When you pay off your mortgage.
Paying off the mortgage is a huge financial milestone. Once the mortgage is out of the way, you'll have a lot of extra cash flow to put towards building up wealth. (The sooner you can pay off the mortgage, the better your long-term situation is likely to be. Consider the difference between repaying a mortgage at the age of, say, 50 compared to the age of 60 or 65. That's an extra 10 or 15 years of extra cash flow to use to build wealth.)
When you're able to self-insure.
For any given level of cover, personal insurance premiums will generally increase over time. (The biggest risk factor for most health issues is age...) Ideally, your insurance needs should reduce over time as you become better positioned to self-insure. The sooner you can get into the virtuous cycle of having enough wealth to be able to self-insure in relation to most events, the less you'll need insurance, the more you can put the money that would have gone towards premiums into building more wealth.
Don't get me wrong - when you have an event that frees up cash flow, it's great to be able to spend it and use it to increase the quality of your life. But as with any spending decision you make, it's important to make decisions that align with your long-term goals and values. Spending money that you didn't need previously is a great way of accelerating your path to wealth.