In life, one of the major goals for many people is to be financially successful so they can live life without worrying how they’re going to pay their next bill. Financial independence isn’t created overnight.
You’ll find, those who are financially successful, are those who have worked hard a majority of their lives to get to where they are now. If you’re tired of living pay cheque to pay cheque, this expert guide will give you the powerful methods to reach financial success in life without worrying about money.
Here are 4 ways to become financially successful in life:
1. Ignore The Status Of Others
You may have heard the saying ‘keeping up with the Joneses’. It’s important that when you want to reach financial success that you ignore the status of others. You don’t need to keep up with what others are doing.
Your friends may be spending large amounts of money on insignificant things, this doesn’t mean you have to do the same. Many people fall into the trap of keeping up with others who are living the high life. The problem with this is that it can drain your funds quickly. You need to remember that although their lifestyle and income may be a lot different than yours, when it all comes down to it, no one cares about what you drive, where you live, or how you dress.
2. Only Spend What You Need To
Another area where many people fall short is spending more money on things they want, rather than things they need. Many people use their money on items that aren’t really needed. If you focus on spending only what you need and use the rest of your money to pay down debt, or placing it in savings, you’ll find that over time you’ll be in a much better financial state.
A good way to work out how much you can afford to save is by:
Tracking your income and what you make every month.
Deducting your important expenses such as water, electricity, food and house rates etc.
Keep a small amount for spending on yourself otherwise you will become stale. Spending $20 a week or fortnight is much better than spending $70.
Place any additional funds, even if it’s $10, into a savings account.
Before making your next purchase, ask yourself, do you really need this or do you merely just want it?
3. Avoid Unnecessary Debt
Many people fall into the trap of taking out a loan in order to upgrade something that really doesn’t need to be upgraded at that time. Examples of this include upgrading a car, buying a new boat, or renovating the home. The key here is to decide whether or not you can wait and save the money first.
Think positively about money and debt . The process of becoming financially secure is all about thinking positively about money and how you will get out of debt. It’s a good idea to sit down and really analyze your income and debts to see where your money is coming from and where it is going.
Consider what we call good debt and bad debt. Good debt is where you may have a loan on an investment property and, depending on your circumstances, may be eligible to access some taxation concessions. Bad debt on the other hand, is a high interest debt that simply eats away at your income such as credit card debt or purchases made on a store card. Focus on paying down bad debt first.
4. Rewrite Your Life Goals and Create A Strategy
Last but not least, it’s important to set major financial life goals that you want to work towards. When you write down your goals you’ll begin to understand what’s required to make them become a reality.
Some things to ask yourself when you’re thinking about your goals:
Where do you want to be in 5 years/10 years/retirement?
Are there any foreseeable expenses that will emerge that may affect your ability to reach your goals? Such as children’s education or caring for elderly parents.
Do you have any debts that will need to be paid off before you reach your goals?
How much income will you need to achieve your goals?
Do you have any family or other dependents that rely on you?
What would happen to your family and dependents should you lose your source of income?
Are your goals realistic given your financial resources?
“Obstacles can’t stop you. Problems can’t stop you. Most of all, other people can’t stop you. Only you can stop you.” — Jeffrey Gitomer
Becoming financially successful is all about the road you take to get there. Even just making some small changes such as reining in credit card spending, paying off credit card debt and starting a savings plan can make a significant difference to your financial well being.
To achieve larger goals such as planning for a comfortable retirement, it’s worthwhile speaking to a qualified financial adviser. A financial adviser can help you to define your goals and work with you on a financial strategy that’s designed to make your goals become a reality.