We have all heard that money cannot buy happiness. However, money is a necessary part of life in today’s world, and many of us struggle daily just to have enough to go around. The feeling of monetary security may seem to some to be just a pipedream, but it can become a reality through the seven step approach to ensure financial success.
It is important to note that financial success does not necessarily mean being wealthy or financially independent. Success can be defined as a victory, so loosely interpreted, could mean being victorious over your finances. What this really means is that you control your finances, rather than they control you.
Step 1. Earn the money you deserve. Examine closely your current employment situation. Are you realizing your full potential, in both your skills and the money that you are receiving? If you feel that you are not in a job that you enjoy and for which you are not being fairly compensated, it may be in time to re-examine your options.
Step 2. Spend less than you earn. Many of us are living at or over our compensation level, and it is a disaster waiting to happen. Look carefully at your expenditures, and begin slashing those unnecessary items. Be firm with yourself; getting nails done professionally or going out to dinner once per week are not really necessary items.
Step 3. Develop and stick with a budget. Staying in the same theme as Step 2, begin getting your current finances in order. Draw up a household budget, making sure it is one that you will be able to maintain. Be sure to allow a few luxuries so that you won’t be discouraged, but keep the emphasis on savings.
Step 4. Get rid of credit card debt. This one is a crucial step. The dollars being spent on finance charges, even if you have a good rate, all represent money that is lost to you. Begin by concentrating on one card at a time, and start increasing monthly payments to eliminate your credit card debt. And above all, stop using them immediately unless you can pay the full balance each month.
Step 5. Plan for retirement. If you are not already, enroll in your company’s 401K program, especially if there are matching employer funds.
Step 6. Save Save Save. Start a savings account, and begin feeding it. Even if you can only add $5.00 per week, it is a start.
Step 7. Review your insurance policies. Insurance policies are important features of life, but take care that you are buying the right insurances for you. If you do not have any dependents, for example, life insurance may not be necessary at this time. Ask questions of your agent to ensure you are properly but not overly insured.
Make the commitment to add financial success to your future, and then take the steps to achieve it. Any forward progress to financial success is positive, and there is no time like the present to get started.