What does financial success look like to you? For some, it might mean a couple of yachts or some impressive Bling or a stock portfolio that guarantees an early retirement. For others, financial success means saving money and staying out of debt. People use different strengths to achieve financial success, but all financially successful people share a few common attributes. Here they are.
Knowing how to manage budgets is essential to financial success. Budgets should not be complicated. It’s really a matter of simple math – add up what you take in, subtract what you pay out, and make sure you aren’t paying out more than what you’re taking in. If you want to add your name to the list of those who have financial success, make sure you learn budgeting and make it a priority.
Staying out of debt
A little bit of debt is often necessary and even encouraged. For example, you can have financial success even if you have a mortgage or student loan debt waiting to be paid off. What you need to avoid is consumer debt, usually racked up through credit cards and personal loans. One or two credit cards that you can afford to pay off every month is okay, but don’t get into the habit of living on credit. Financial success is impossible if your debt is higher than your savings.
Saving money is a no-brainer when it comes to chasing financial success. In order to be financially secure, you have to have money in the bank and you have to have it spread out. You should have a savings account that can be liquidated quickly if you need the money. You should also invest whatever money you have leftover from your monthly budgeting so you can build your savings. Teach your kids how to save as well. You can start them on the right track with a piggy bank and move them up to a savings account when they’re old enough to understand the value of money. College savings plans are a good way to save money for education, and even your little ones need life insurance.
It’s hard to stomach, but some people are financially successful simply because they are lucky. They are born with the last name of Romney or Kennedy or Trump, they win a surprise lottery by doing nothing more than buying a ticket, or a family member they barely knew leaves a large fortune to them in a will. It sucks for those of us who work hard on budgeting, saving money and avoiding debt. But don’t feel too bad – financial success is enjoyed much more when it’s earned.
Whether you think a net worth of $5,000 or $5 billion equals financial success, getting good advice probably helped you get there. Take advantage of experts in the field of taxes, accounting and investing in order to ensure you are doing the best job you can with your money. Learn to rely on the good instructions and gentle reminders of financial professionals, and you’ll be sure to hold on to that financial success.