One of the most important lessons when planning for a successful financial future is finding a way to control your money instead of letting it control you. Success is about your choices, priorities, values and the development of healthy financial habits. The following tips may help lead you to financial comfort, contentment and a valued life.
Live within your means — This sounds so simple, yet so many people spend more than they make and live way beyond their means. Ultimately, this can lead to financial distress rather than success.
Stay connected to your financial picture —Evaluate what you earn, spend, your debts and your net worth (assets minus liabilities). Monitoring your financial state regularly can help you determine what changes need to be implemented in the future.
Make saving a top priority — The first payment of each paycheck should be to you. You can set an amount to be automatically transferred from your checking account to your savings, retirement plan, investment account, etc.
Establish goals — This will help determine how much you need to set aside each month in order to obtain your goals. During this process it is essential that you determine your priorities. Is a new car every four years important or would you rather increase your retirement fund or save for a child’s higher education? Invest the time to think about your goals, it’s important, it’s your future.
Secure your future — Set up an emergency savings fund and prepare for the unexpected such as a lost job, car repairs, etc. Establishing an emergency fund will help provide you with a cushion and help you pay the expenses of the unexpected so they don’t drain your future savings. Most financial advisors would recommend saving at least three to six months worth of essential living expenses. This money should be accessible; a savings account is usually a good choice, as it will not incur penalties for early withdrawals.
Cover yourself — Having the right insurance can help protect your finances. Consider what you need – health insurance, homeowners insurance, life insurance, disability insurance, etc. Discuss the terms and cost with your insurance agent and find what’s right for you.
Invest for success in the Future — Start today! The earlier you start the more time for growth on your investments. Do some research, the more you educate yourself, the better your finances. However, financial matters can be complicated. Do not hesitate to seek the advice of a financial advisor. They can help assist you with a plan personally tailored to start you on the road to a successful financial future.
Answers from AZ