Tricks to Use to Become Financially Successful

If you take a look at your successful family and friends, what led them to that path?  Surely you can ask what advice they have to offer.  The household finances, especially if you share with a significant other, should not only fall on your shoulders, as you should work together as a team to decide not only current financial behaviors, but what your long-term goals are.  A lot goes into the household finances in addition to just paying bills, but also setting yourself up for success in the future by saving for emergencies, but also your future as well.  By taking on a few behaviors, you too can be financially successful as well, and as always, if you have any questions it’s always best to reach out to a financial advisor.

A Budget is Key

When it comes to keeping track of the money not only coming in, but going out, a budget is a great way to allocate funds to each area, such as monthly bills, food, gas, and spending money.  Spending is where you can investigate a little further.  By taking last month’s credit card or debit card statement, you can actually go line by and line and see what all of the charges are.  Reducing unnecessary expenses will be key in freeing up extra money each month, so try and add up what you could have avoided that month, the total will probably shock you.

Save More for Retirement

Sure, retirement may feel like forever way, when actually it is decades away, but that doesn’t mean you should put off saving until later.  The earlier you can start, the better, taking advantage of compound interest early on.  If your work offers company matching contributions, that is where you want to make sure you are contributing the maximum that is matched, otherwise that is leaving free money on the table, potentially setting yourself back years from retirement by missing out on that money every paycheck.  From there, if you are able to increase contributions each year until you max out 401(k) limits, you will be in great shape.

Stay Out of Credit Card Debt

Speaking of being in great financial shape, this may start and end with credit card debt.  If you are not able to pay the full statement balance by the due date, you will begin paying interest until that amount is paid off, so depending on the balance and the APR on the card, you could be digging yourself further and further into debt each month, especially if you are only making the minimum payment.  In order to really get ahead you’ll want to be sure to stay out of credit card debt and have your hard-earned money going towards your future instead of paying interest.

Invest

Not only will you have to track how your 401(k) investments are doing, but in order to gain financial success, you can also invest in stocks, bonds, or mutual funds by opening up a brokerage account.  Some accounts such as TD Ameritrade have low starting balance requirements to get your feet wet in the investing game.  From there hopefully you can balance out your portfolio with as many guaranteed returns as there are (to anyone’s guess), and a mix of stocks that have the potential to hit big.

Automated Deposits

When your paycheck is direct deposited into your account and you see that balance for your available credit, it can make you happy, with the tempt of going on a shopping spree.  By the time you start to allocate your funds out, you are not left with much, so it’s a good thing you avoided going out shopping.  Any time you manually transfer money back and forth you are tempting fate of saying “screw it” and not save that month.  By setting up automatic withdraws to a savings, brokerage, or even your kid’s college fund, you can reduce temptation as much as you can.

Live Within Your Means

Some want the best of anything, to keep up with successful friends and family, to have the finer things, but sometimes it’s just not in the cards.  Between clothes, car, house, you don’t have to max out your income in order to live in luxury.  To really get ahead financially and really be able to cover all areas of the household finances such as paying bills, having spending money, funding an emergency account, and saving for the future, there needs to be enough income there to divide out, so it’s important to live within your means of what you can afford.

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