Tips For Financial Success
If there were a personal finance class or one titled ‘financial success' in high school, most people would have had a great start at managing money and finances. If that weren't enough, the events of the past year have made it more challenging to attain one's financial goals.
Author:Luqman JacksonReviewer:Liam EvansJun 25, 2022102.3K Shares1.5M Views
If there were a personal finance class or one titled ‘financial success' in high school, most people would have had a great start at managing money and finances. If that weren't enough, the events of the past year have made it more challenging to attain one's financial goals.
Even in what seems like a tough situation, there are ways you can build towards long-term financial success. However, financial success isn't something that occurs overnight. It is an accumulation of small steps towards your goal.
In this piece, we share financial advice with seven tips for financial success.
Spend mindfully
It's best to be mindful when spending unless you have an unlimited amount of money. Identify the difference between wants and needs so that you can make better spending choices. While needs are things you need in order to survive, wants are things you'd like to have but don't need to survive.
Remember, your needs are a top priority. It's only after meeting your needs that you may consider your wants. Learn to spend less than you earn to increase how much you can save.
Instead of budgeting, track your expenses
When considering sound financial advice, budgeting tends to get a lot of attention, but tracking your expense is the real secret to financial success. Most financially successful people know where every penny goes. Identifying where your money goes is the first step toward making informed financial decisions.
Once you identify a significant expense that isn't meaningful, find a way to find cheaper options or eliminate the expense completely. If you don't know where your money is going, it is near impossible to know where and how to save money.
Here is an excellent step by step process on how to track your expenses:
- Identify a tracking method that works for you.
- Track your expenses for 3-6 months. Simply track your expenses and don't make any adjustments just yet.
- Review and take action. Now that you know where your money goes, determine if each expense aligns with your financial goals. If not, take action.
Pay off your credit card debt
Credit card debt can be debilitating. They are one of the greatest obstacles to financial success. Credit cards are convenient and easy to use. However, it is easy to forget that you are spending real money when making purchases. No matter how often you resolve to pay off the balance quickly, you probably don't and end up paying much more than you spent. Create a debt repayment plan to pay off your balances quickly, or seek credit card debt forgivenessif you are drowning in debt.
Generate different sources of income
All high-income and net worth individuals have several sources of income. More income streams ensure you are financially secure. A few ways you could diversify your sources of income include
- Diversify your investments: Rather than simply saving, put a part of your savings into investments. Seek to diversify your portfolio as much as you can. This could be investing in EFTs or a brokerage account.
- Offer a product or a service: A small side business can help you earn extra income. Be creative. Monetize something you are passionate about.
- Invest in real estate: Did you know diversifying through real estate may allow you to leverage a bank's money to buy property, appreciation, and tax deductions?
Build and maintain an emergency fund
An emergency fund helps you cater for expenses that normally wouldn't be included in your monthly expenses. These may include car repairs, health emergencies, or loss of a job. Put this as a regular expense in your personal budget to ensure you do not forget or spend frivolously. The idea is to save up for at least six months' worth of living expenses.
Save diligently
It's never too late to start saving. Don't wait until you have met all your other financial obligations to allocate what remains as savings. Decide how much of your salary you are willing to put in your savings before paying your bills. It could range anywhere between 5%-20% of your income. An effective way to ensure you save monthly is to have an automated deduction from your paycheck and have that deposited into a different account.
Saving could be subdivided into different financial aspects; retirementand investments. If your employer offers a matching contribution to you 401(k), ensure you make enough contributions to earn the full maximum contribution.
Finally, automate your finances
Automate as much of your bills, savings, and investments. This helps you set up autopay which ensures you never have to pay late fees. Your payment history greatly influences your credit score, which is why paying on time should be a priority. Automation also helps you keep track of your expenses.
Attain Financial Success Today with Better Money Habits
In a nutshell, you don't need to be a finance expert to attain financial success. The above tips are a great place to start setting personal finance guidelines to help you achieve your long-term financial goals. Consider the bigger picture and build habits that lead to better financial health. This may mean seeking help from Freedom Debt Relief to get credit card debt forgiveness and get a foothold on your financial wellbeing.
Luqman Jackson
Author
Liam Evans
Reviewer
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