Everyone wants to be financially successful but that might mean something different to everyone you ask. In general I believe financial success boils down to being worry free. Financial success to me is not being worried about paying your bills, providing for your family and saving for your future. For others it might be achieving some kind of financial milestone, getting that promotion at work or being able to afford your dream home. Financial success means something different to each person but we all get there the same way. Here are 10 ideas to help your achieve financial success like a rockstar!
Most people are not financially successful because they are looking for one universal tactic that will magically answer all their prayers. Financial success is built over time upon many bricks not just one. Here are 10 ideas to get you ahead of the financial curve.
1. Earn what you’re worth and spend less than you take home
Financial success isn’t rocket science and that is very evident in this first idea. If you have a high school diploma then work you butt off to get promoted and strongly consider taking night classes at your local community college. If you have a degree apply to jobs that require your degree and if you have an advanced degree don’t settle for less than you’re worth. Also, spend less than you take home. This is one of the most important things you can do. If you spend more than you bring home then you will never get ahead and be financially successful. Stop the spending now! You’ll be surprised to feel how awesome it is to hit some big savings milestones like first $1,000 and then $10,000 and so on.
2. A portion of all you earn is yours to keep
Many finance gurus tell you to pay yourself first and keeping a portion of all you earn is no different. It’s sad to see people slave away at their jobs 40-60 hours a week and then take their paycheck and give it all away to someone else. You work really hard for your money and you deserve to keep a small portion for yourself. When you get paid make sure you give yourself at least 10% of your paycheck. This 10% should be invested for your future so that you don’t have to work when you’re 95 years old.
3. Emergency fund
After your pay yourself you need to save some money for emergencies. There is nothing worse than paying extra on your bills to bring them down to size and then totaling your car. Emergencies can hit your wallet hard when you least expect it but having some Benjamin’s saved up will help you hurdle these obstacles without going further into debt and interrupting your new saving habits. 3-6 months of income is recommended for most people as a general ballpark answer. However, the more money you make the more recovery time you’ll need. For instance, if someone makes $30K annually they will be able to find another $30K job more easily than someone looking to replace a $100K job. The more money you make the more money you need for emergencies.
4. Stick to a budget
Knowing where your money is going ahead of time helps put the breaks on impulsive spending. You can easily stick to a budget by using online money management software like Mint.com. I really enjoy using Mint because I can see all my accounts in one place and easily set up a budget with a few clicks. Mint will also alert me if I am close to going over budget or if I was charged a fee. Mint has even told me of bank fees before my local bank and I was able to clear everything up before I got their snail mail letter.
5. Keep good records / Track every penny you spend
Whether you balance your checkbook, use sexy spreadsheets or utilize Mint.com you might be surprised what you spending history tells you. When I began tracking my spending I was surprised to find that one of the stores I was visiting the most was Barnes & Noble. This was my weakness and I had no idea until I used Mint.com to look at a pie chart of my monthly spending. Now I try not to visit as often and I’ve subscribed to a couple magazines at a fraction of the newsstand price.
Financial goals are very important to achieving financial success and are often over looked. Goals help bring financial success into focus and keep you on track so that you don’t get distracted. I’ve created a “5 Step Goals” ebook for you to grab for FREE. Simply verify your email to receive your free copy right away.
7. Choose paper not plastic
Many studies have shown that it’s easier for someone to swipe a card than to give up cash. When you pay in cash you don’t get anything back except what you purchased. The subtle difference is when you pay with plastic you get the card back. I’m guilty of paying with plastic and not even remembering the total when I grab my bags. To be financially successful pay down your credit cards and use cash more often. Cut them up or leave them at home if you need to but use credit less and pay off that debt.
8. Automate your finances
Make saving and investing automatic. Nearly all banks now allow you to set up multiple savings and checking accounts. Set up an account for emergencies and allow your investment resources to be automatically withdrawn so that you won’t have to worry about having the discipline to save yourself. Relying on your own will power to save and invest is a loser’s game. Make saving and investing automatic to become financially successful.
9. Educate yourself
Immerse yourself in financial wisdom. Make it your hobby to learn more about saving money and dumping debt. There are always questions to ask and find answers to. When you find something that works, share the wealth! Our collective knowledge and ideas will help everyone become financially successful.
10. Find extra work and don’t trade dollars for hours
If at all possible take what you love doing in your free time and find a way to make money at it. Just make sure that the way you determine to bring in extra cash isn’t trading hours for dollars. Financially successful people know there are only so many hours in a day no matter how much you charge. Make sure you get paid for your value not your time.
Put into practice these 10 ideas to become financially successful. Don’t narrow down your favorite idea and just focus on one. Financial success requires many small victories through multiple avenues. These 10 ideas will get you started on the right track. Remember to evaluate your progress often and make any necessary changes.
What does financial success mean to you? Collective success is necessary to make sure everyone succeeds. Do you have any ideas to help people become financially successful? Please share in the comments below.
Also check us out at the latest blog carnival at Yes I Am Cheap! This is a great resource to help you save money.
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