12 Tips for Financial Success

Forget dry budgets and tedious spreadsheets – these 12 tips for financial success recommendations are your secret cheat code to financial success, with a sprinkle of fun thrown in.

12 Tips for Financial Success

Say goodbye to money stress and hello to a happy, healthy bank account with this human-approved plan.

1. Set Life Goals

What is financial independence to you? Everyone has a basic desire for it, but that’s too vague a goal. You need to get explicit about amounts and deadlines. The more explicit your goals, the higher the likelihood of realizing them.

Write down these three objectives:

  • What your lifestyle requires.
  • How much you should have in your bank account to make it achievable
  • What is the age limit for saving that amount?

Next, count backward from your deadline age to your current age and set financial mileposts at regular intervals between the two dates. Write all amounts and dates down carefully and put the goal sheet at the front of your financial binder.

2. Make a Monthly Budget

Making a monthly family budget—and sticking to it—is the best way to guarantee that all bills are paid and savings are on track. It’s also a regular routine that reinforces your goals and bolsters resolve against the desire to splurge.

3. Watch Your Credit Score

Your credit score is a very important number that decides the interest rate you are offered when buying a new car or refinancing a home.1 It also impacts the amount you pay for a range other essentials, from car insurance to life insurance rates.

Watch Your Credit Score

The reason credit scores have so much weight is that someone with reckless financial habits is thought likely to be reckless in other areas of life, such as not looking after their health—or even driving and drinking.

This is why it’s important to get a credit report at regular times to make sure that there are no erroneous black marks ruining your good name. It may also be worth looking into a reliable credit monitoring service to protect your information.

4. Maintain Your Property

Taking good care of property makes everything from vehicles and lawnmowers to shoes and clothes survive longer. The cost of maintenance is a fraction of the cost of replacement, therefore it’s an investment not to be ignored.

5. Choose Carefully

Every action has a cost, so analyze your options carefully. Too often, people make financial decisions without thinking through the repercussions. For example, a consumer feels they must have a thing, doesn’t have enough cash, and uses a credit card to make the buy without thinking about how much it will cost to pay off the debt.

Or a couple buys a house without fully comprehending the terms of the mortgage loan. When you select between two things, you automatically give something up.

A decision to buy an expensive car is a decision not to spend that money to buy other goods or services, or make an additional payment on your mortgage, or support your children’s college savings account. Before making that impulse purchase, be careful to think about the cost of your choices

6. Invest In Yourself

Education and training are investments in yourself. Education and training is a significant investment in you and your family. One of the best financial decisions you can make is to invest intelligently in higher education.

More education means higher incomes for life. Studies show higher education leads to bigger earnings. So, the more you learn, the more you earn. Over a 40 year career, these increased wages really add up. Just by staying in high school and finishing, workers earn an average of $6,000 more per year, or $240,000 more throughout their lifetimes.

Invest In Yourself

Add a two-year associate degree from a community college, and the lifetime earnings climb to $480,000 more than the high school dropout will earn. Think about that – that’s a cool half-million bucks for finishing high school and going to college for just two years.

The earnings premium for college graduates? Most bachelor’s degree holders earn around $1.2 million more over their lifetimes than high school graduates

7. Plan Your Spending

Understand the difference between net and gross. First-time workers often face shock after receiving their first check. Most workers’ salaries are subject to taxes such as income taxes, social security, and Medicare. When joining the job force, make sure to prepare a spending plan that takes into account the fact that around one-third of your wages will be withheld from your paycheck.

8. Save, Save More, and Keep Saving

Practice saving, not spending. We’re all aware that there are more options for spending money than ever before. Look at saving as spending on your future. Everyone needs a nest egg or rainy day fund.

It’s best to start small while building one. Save $100 or even just $50 per month by having funds automatically taken from your salary and placed in a separate, interest-bearing savings account.

Soon you’ll have a special savings pool that can help you absorb unanticipated expenses or make expenditures on key investments such as a home or college.

9. Put Yourself on a Budget

Make a budget, then stick to it. Financial success refers not so much to earning money as it does to making sensible choices about how to use your money. A budget is vital for you and for your family. Budgeting enables you to better manage and control your family’s spending.

Planning enables you to enhance your buying power. A budget doesn’t have to be complicated. All it takes is jotting down how much comes in every month, how much must go out for rent, bills, food and other expenditures, and how you intend to use what’s left over. Gaining awareness of where your money goes is vital to exerting control over your expenditures.

10. Learn to Invest

Investing is crucial. Many people feel “investor” is not a word that pertains to them. In reality, anybody with a retirement account is an investor. That’s crucial to understand since many people working today will not receive a guaranteed pension, which means they need to save considerable sums of money to finance their retirement.

Learn to Invest

For most of us, simply depositing money in a savings account will not be sufficient. Investing is an essential instrument for developing your money. Diversified instruments like target date retirement plans and mutual funds make investing easier than ever. To learn more, start with the SEC’s investor education page at http://www.sec.gov/investor. shtml

11. Credit Can Be Your Friend or Enemy

Credit can work for you or against you. Credit can be a great tool to assist acquire financial security. Without credit, most families would not be able to buy homes or cars they need to commute to work. Unfortunately, credit can often be too easy to get.

While credit can be a fantastic friend, it is very important to know the terms before you borrow and to be sure credit is the best option for you to make the purchase. Don’t become a credit junkie. If you are in serious credit problems, seek help from a reliable credit counseling program.

12. Nothing is Ever Free

If it’s too wonderful to be true, it’s too good to be true. It’s advisable to presume that an offer or marketing that “sounds too good to be true” – especially one from a stranger or an unfamiliar firm – is definitely a scam.

Nothing is Ever Free

To find out if a company is legitimate, look it out using a credible source such as the DBO or Better Business Bureau. Do not use the contact information provided in unsolicited emails or letters. Even if the organization is reputable, most “free” offers are really enticements to buy something.

When an ad reads, “Buy two, get one free,” remember that you are paying more for the two items than you typically would. The third item is not free. Beware of any sales pitch that employs word “free.”

FAQs

What is the 50 30 20 rule?

The 50-30-20 rule advocates spending 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to accomplish your future aspirations.

What are keys to financial success?

Practice saving, not spending.
Look at saving as spending on your future. Everyone needs a nest egg or rainy day fund. To build one, it’s easier to start small. Save $100 or even just $50 per month by having funds routinely taken from your salary and placed in a separate, interest-bearing savings account.

What is the 40 40 20 budget rule?

The 40/40/20 rule comes in during the saving part of his wealth creation formula. Cardone says that from your gross income, 40% should be set away for taxes, 40% should be saved, and you should live off of the remaining 20%.

How do I divide my income?

Poorman offers the popular 50/30/20 rule of thumb for paycheck allocation: 50% of net pay for essentials: groceries, bills, rent or mortgage, debt payments, and insurance. 30% for spending on dining or ordering out and activities. 20% for personal saving and business goals.

Conclusion

These 12 steps won’t fix all your money difficulties, but they will help you create the healthy habits that get you on the path to financial freedom. Simply developing a plan with clear target amounts and dates reaffirms your desire to attain your goal and defends you against the temptation to overspend. Once you start to make genuine progress, relief from the constant burden of escalating debt and the prospect of a nest egg for retirement kick in as tremendous motivators—and financial freedom is in your sights.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top