In this article, we will discuss tips to be financially successful. Money is one of the most complex and important aspects of life in our world today. Money drives many of our daily decisions and determines much of how we spend our time.
If you want to be financially successful, you need to understand and take control of your personal finances. While personal finance may seem daunting, you don’t need an advanced degree in economics to be able to understand your finances, create a budget, save for retirement, or invest.
With just a bit of effort, you can become financially literate and teach yourself to be successful with money. In this article, we’ll take you through gaining a personal finance education, some basic personal finance, and setting financial goals.
What is Personal Finance?
Personal finance is at its most basic level just the management of money for a single person or family. That doesn’t just mean what you spend your money on though. Personal finance encompasses a broader idea of managing money and financial decisions that impact you and your family.
That includes budgeting and where you spend your money, but it also encompasses investments and retirement planning, and it incorporates ideas of personal finance education and financial goals.
Getting a Personal Finance Education
Living as an adult in our modern world is a complicated thing. Personal finances today encompass a lot more than just going to work and paying your rent or mortgage and utilities.
You need to think about the future, and for that you need to educate yourself about personal finance. Personal finance education is the key to living happy, stress-free, and having a strong plan for your future.
Financial Literacy
The first part of personal finance education is financial literacy. Even if you’re in the position to have an accountant who manages your finances, you need to be able to understand what’s happening with your money and be in a position to have the final say on financial decisions.
This goes the same for couples in which one person tends to manage all the finances. This step is essential in order to be financially responsible.
Be Comfortable talking about Money
Part two is a natural progression of part one. You need to be comfortable talking about money. We live in a culture where it’s often seen as taboo to discuss money. You don’t want to be seen as greedy or as only caring about money.
Let’s be honest though, your personal finances are one of the most important aspects to your quality of life, and you need to be on top of them. Part of that is understanding and discussing money, especially when the conversation is about difficult or challenging aspects of your finances.
So how do you gain a personal finance education? Well, you have several options. Firstly, you can take a class. Your local library or college likely offers a free course on financial literacy.
If you can’t attend a class in person, there are several online courses you can take for free. Secondly, read some personal finance books. There is a whole library of literature on personal finance out there.
Whether you’re looking for a broad personal finance education or want to learn about a specific aspect of personal finance, such as retirement planning or investing, you can find a book to help you.
Finally, you can read personal finance blogs. There is a wealth of information available online to help you become financially literate and take control of your personal finances.
Basic Personal Finance: Budgeting
The simplest concept of basic personal finance is budgeting. Regardless of whether something simple or complex works best for you, everybody needs a budget.
The simplest form of a budget is just a list of how much money comes in vs how much goes out in a specific time frame (usually every month).
As your budget becomes more detailed, you can get a better idea of how you spend and how you can spend differently.
You can pinpoint areas where you could be saving, and once that money is freed up, you can plan for how to best spend it whether that’s paying down debt, investing, or just putting into an emergency savings.
Think of your budget like a roadmap for your finances. It shows you where you are and where you can go. Once you have a budget that works for you, you can focus on your personal financial goals and make a plan to achieve them.
Personal Financial Goals
In order to be truly financially successful, you need personal financial goals. If your budget is a roadmap showing where you are, your financial goals are the route to how you’re going to get to financial success.
Your goals are a representation of what you want in your future, and by setting financial goals, you can make better financial decisions today. If your goal is to retire in 30 years, you can set a plan to start saving and investing now.
If you don’t have extra money for retirement savings, you can take a closer look at your budget and see where you can cut back or you can make a plan to earn more money in the future.
Some common personal financial goals include:
- Paying off debt
- Saving for retirement
- Building an emergency fund
- Buying a home
- Saving for a vacation
- Starting a business
- Feeling financially secure
It’s not as important what your exact goals are as that you have them. Financial goals give you a target to shoot for and motivate you to make and develop healthy financial decisions and habits.
Include your financial goals in your budget and continue to review and adjust them as your financial situation changes.
Conclusion – Tips to be Financially Successful
While personal finance is complicated and can seem overwhelming, it’s something anyone can do. If you’re looking to take control of your finances, you can start by simply reading a few articles and making a budget.
As you gain a better understanding and greater personal finance education, you can set some personal financial goals and create a roadmap of where you want to go.
However much you do, taking control of your personal finances is the key to being financially successful, happy, and having a strong plan for your future.
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About the Author
Don is a father, real estate investor, self-directed investor and a personal finance enthusiast. He also holds an MBA and loves to share his financial Journey with others.