How to be successful financially
Financial success and stability is something most people desire and strive for. And with a little work and know-how, it's not hard to do, no matter what your current financial situation is.
The following are a few tips for how to be successful financially:
Make a budget
One of the keys to being financially successful is making and sticking to a budget. Budgeting is important because it helps you see how much you have coming in, how much you are spending, and where you can make cuts if necessary. To make a budget, list your monthly income in one column, then list your monthly expenses in the other. Subtract your expenses from your income. Ideally you should have some left over; if you don't, it might be time to make some cuts. If you find yourself going over your budget every month, practice a little more discipline in your spending.
Improve your credit score
Your credit score says a lot about your financial well-being. A bad credit score can make it difficult for you to get good rates on loans or even get loans at all. In addition, many employers and insurance companies take your credit score into account when looking at applications.
Everyone is entitled to one free credit report a year. You can get yours from one of the three major credit reporting agencies (TransUnion, Equifax, or Experion.) From there, see if you have anything negative. Work to get caught up. Make sure you pay all your bills on time. If you are having trouble paying your bills, call your creditors to work out a payment plan so you can avoid being sent to collections.
Save your money.
It's always smart to have some money set aside for unexpected expenses, such as car repair, or events, like a medical emergency or job loss. Try and budget a certain percentage of your income each month specifically for savings. It's also a good idea to put that money into an interest bearing account, so it can earn you even more money while it sits there unused. CDs are excellent for this.
Live within your means.
You can't be financially successful if you are constantly purchasing things you can't really afford. Stick to your budget and save for things you really want, instead of putting them on credit.
Set financial goals
The first thing you will want to do is define what being financially successful means to you. Is it having a certain amount of money in the bank? Is it being out of credit card debt? Is it cutting expenses so you don't have to live paycheck to paycheck? Make a list of your financial goals so you know what exactly it is that you're working towards.
Get out of debt
Debt can cause unnecessary stress and hamper your financial success. Most people are in debt with things like cars, homes, and school loans, but interest on credit cards is often so high it's impossible to pay off your balance since most of it is going to interest. You should avoid opening too many lines of credit and keep your credit cards paid down. Too many credit cards can also hurt your debt to income ratio. If you have high credit card balances, consider consolidating them or transferring the balances to a card with an interest-free introductory rate.
Regardless of your income and current financial state, you can still be financially successful with these tips.