Financial success is relative. Investors define financial success as the next million they net. Ordinary Americans define financial success as more savings. While everyone aspires for financial independence, most people have to continue working all their life.
If you are in the massive majority of ordinary citizens, then your financial objective should be pragmatic and possible. Do not aim for financial independence or early retirement when you are struggling to double or quadruple your present savings. Do not commit yourself to asset acquisition if you are living from paycheck to paycheck. Bearing all such realities in mind, here are some rational money tips for financial success in 2019.
Review All Your Obligatory Expenses
This list should include all utilities, essential services and the products you buy regularly. Water, electricity, gas, cable or satellite television, cell phone plan, news and magazine subscriptions among all other expenses that you bear every month should be assessed and appropriate changes should be made. If you are overpaying for these services, then you easily save a few hundred dollars cumulatively every month. The obligatory expenses include your grocery bills as well. There are always ways to shop smart. You can save a few bucks here and there every time you buy something, at times with coupons or courtesy some offer that you can avail at a particular store and usually online.
Review Your Budget and If You Have Not Been Following a Particular Plan Then Create One
The budget should not have an expenses first approach. This is where a majority of Americans go wrong. Most people tend to account for all the expenses and then have a bit of spare cash. A bit of discretionary spending is inevitable and only then do people factor in savings. Incorporate a savings first approach throughout 2019. Decide how much you want to and practically can set aside every month. Your discretionary expenses should be whatever is left after obligatory expenses and savings. If you let your discretion determine savings then your impulses will make sure you do not have much to set aside every month.
Consolidate Your Debts, If You Have More Than One
Come up with a strategy to be completely free of debt. Mounting debt holds back millions of people from achieving their financial goals. You cannot attain financial success if you are indebted. Investors who owe banks millions of dollars have more as their net worth so their outstanding debts are in a different realm. They also have more assets so their debts are not unmanageable. For the ordinary citizen, a debt of a few thousand or even several hundred can be worrying, especially if it is becoming harder to repay.
Plan an Emergency Fund and This Should Not Be the Same as Your Savings
Many people save money for months and in some cases years only to end up spending all of it when a crisis strikes. You will have unforeseen and unpleasant circumstances. An emergency fund should be created and maintained, segregated from the usual savings. If you choose to forego an emergency savings, you may find yourself in a debt trap in the form of a short-term loan. Some of these types of loans, mainly payday and title loans prey on borrower’s inability to manage their finances. They will even finance a borrower that is in bankruptcy!
Come up with a Short-Term Financial Plan with an Eye for the Long Term Success
It is easy to imagine a net worth of a million dollars. The harder task is to compute the hundreds and then the thousands that will make up that million. It is everyday expenditure, investments, and the endeavor to increase your income in the short-term that will have a ripple effect on the distant future. Many people do not realize it to put the principle into practice even though they are fully aware of it.