Financial success is attainable for everyone because it means different things to different people. Your thought or views on financial success are probably different than mine and vice versa.
Financial success for one may be to provide an inheritance to his children, and another person may see the vacation house on the lake as financial success. However, you determine financial success, below are some tips or foundational tools to help you achieve your view of financial success.
Have a Plan
Get organized and develop a plan to get you to where you want to go. In doing that, determine what your financial situation is. Often, you can know where you are going until you know where you are. So where are you? What is your income? Who do you owe, how much do you owe, and when is the payment due? These questions are the types of information you will need to know.
Once you know where you are, you can develop a plan to develop short-term and long-term goals and ways to meet them.
To some, financial success is spending less than they make. This is a key to any financial plan. The alternative is spending more than you make is a recipe for disaster. Spending less than you make will allow for savings so that you can purchase assets.
And it is assets that will help you build your wealth and financial success.
Prepare for Expected and Unexpected Events
Expected events would include things like retirement, holidays, and kid’s college. How will you plan for these events? How much will you need for college or retirement? Prepare for these events to be successful for you and your family.
Unexpected events include car repairs, a job loss, or maybe unexpected medical expenses. How will you handle these events? An emergency fund of six to twelve months of expenses is a good place to start and could be seen by some as a financial success.
Preparing for expected and unexpected events will save a lot of headaches later.
A Healthy Credit Report
Many people see a healthy credit report as financial success. To keep your credit report healthy, you need to do two things. First, pay your bills on time.
Thirty-five percent of your credit score is based on how well you pay your bills on time.
The second thing you need to do is get a free copy of your credit report at annualcreditreport.com. Getting a copy of your free credit report, and looking over it, may alert you to possible identity fraud.
Many people do not take advantage of tax breaks that are available to them. For example, the Internal Revenue Service conducts a program called VITA. VITA stands for Volunteer Income Tax Assistance. Volunteers are trained to do taxes for free for low and limited-income individuals and families.
Additionally, credits such as the earned income tax credit, education credits, and retirement saving contributions, can increase your income and help you reach your financial goals.
Money is used to do three things. That is, spend or buy things, saving and investing, and giving.
So, to complete your success, give back.
Once you achieve financial success, give back to the local elementary school, food bank, or United Way. Give back to the community in some way. For me, giving in a much greater way than I am currently able, would be the ultimate success.
What constitutes success for you. Comment below, I would love to hear from you.