Achieving financial success is something that many people want to reach.
It makes sense as money can greatly determine how a person lives their life.
Money can even be a factor in your happiness. I’m not saying that money equals happiness, but if you’re stressed about money, you may feel depressed, inadequate, or have other negative feelings.
I completely understand that there are some situations where things are outside of your control, leading to a lot of financial stress and awful feelings.
It can be incredibly difficult to overcome situations like that.
Still, I truly believe that there are things you can do to become more financially secure and reach financial freedom. Everyone’s path will be different, but I believe it’s possible.
So, what is financial freedom and financial success? And, how do you become financially successful?
Financial success means something different to everyone.
It could mean that you no longer have debt, that you no longer have stress from money, money no longer controls you, you have paid off your house, you’ve reached retirement, or something else.
It can be one or all of those things. There are no rules to what financial success is because everyone has unique and different circumstances.
For example, if you were finally able to pay off a medical bill, that can be financial success for you.
Feeling financially free is when you are able to live life without worrying about money. It’s when you feel comfortable enough to follow your passion, instead of thinking about the income you are bringing in.
It allows you to stop stressing about unexpected expenses because you have an emergency fund. It’s when you live without money controlling your life.
Financial freedom and success aren’t all about the amount of money you earn. It can be about how much money you are able to save, your money habits, and more.
Today’s post is going to help you gain control of your money and learn how to reach financial success, no matter what it means to you. These are all tips I use in my personal life, and they’ve helped me gain control of my money and stress about it less.
Here are 9 tips for financial success.
1. Figure out what financial success means to you
First, you’ll want to think about what financial freedom means to you personally, as it can be different for everyone.
Think about how not having debt could change your life or what it would be like to retire early. You can also think about how you could do things differently with your money, like no longer making impulse purchases.
You can also think about this in terms of different financial goals. If your meaning of financial freedom is being debt free, then making a plan and paying off your debt will be your goal.
You can start working through the other tips in this list before you know exactly what financial freedom and success means to you. But, don’t neglect this one because it will help you make a plan that will guide you on your path.
2. Create an emergency fund
An emergency fund is one of the most important things you can start off with if you want to take control of your financial life.
Without an emergency fund, if an unexpected expense comes up and you cannot afford it, you may end up putting it on a credit card or borrowing money. It’s like you’re taking two steps back every time.
Not having an emergency fund can add a ton of stress.
An emergency fund is money that you have saved for when something unexpected happens, such as losing a job, paying for a car repair, an unexpected house expense, and more.
It’s a key to financial success because it prevents you from taking on debt.
Learn more at Why You Need An Emergency Fund and How To Start One Today.
3. Spend less than you earn
This one is probably obvious to you, but I wanted to mention it because it’s so important if you want to reach financial success.
If you are spending more than you earn, you will be digging yourself deeper and deeper into a hole. The deeper you get, the more difficult it gets to reach financial freedom and success.
If this is an area you struggle with, start by making a plan. It may involve finding ways to make more money or cutting your expenses.
It’s something you need to start focusing on now.
4. Put together an emergency binder
This tip is more to protect those around you, but that doesn’t mean it’s not important!
In fact, an emergency binder is very important.
An emergency binder is a way to compile all of your financial information in one easy place, like bank account information, passwords, insurance information, personal details about you and each person in your family, wills, and more.
This is important to have because many families are lost when something happens and they don’t have this information easily available. Life can be very difficult if something were to happen to the person who manages everything in a family’s financial life.
I recommend having an emergency binder whether you:
- Have a family
- Have children
- Are single — this is because someone will have to handle your affairs if something were to happen to you, and they’ll probably have no clue where to start. An emergency binder can guide them.
This can be useful in non-emergencies as well. Creating a binder like this organizes all your family’s information in one place. It makes finding any piece of information quick and easy, and you’ll probably refer to it often.
You can check out the In Case of Emergency Binder to help you with creating your own emergency binder. This is a 100+ page fillable PDF workbook.
5. Pay off your high-interest rate debt
If you have any high-interest rate debt, such as credit card debt, then I highly recommend paying it off quickly.
High-interest rate debt simply becomes more and more difficult to pay off over time as those interest charges build and build and become unmanageable. Before you know it, that $100 you spent at the store may be costing you $500 over the years.
This kind of debt can add a crazy amount of stress, and it becomes increasingly hard to pay off. And, it will most likely prevent you from reaching your other financial goals.
Due to this, I recommend making a plan and starting to pay off your high-interest rate debt as soon as you can.
To start, take a look at why you are in debt in the first place as this will help you move forward and not fall into the same mistake later in the future.
Then, the next step is to attack your debt!
Figure out what you can do to eliminate it, which will most likely include finding ways to make extra money, cutting your expenses, making extra debt payments, and so on.
You can read inspirational stories at 18 Debt Free Stories That Will Inspire You.
6. Conduct regular family money meetings
Making sure that everyone is on the same financial page in your family is a very important step to achieving financial success.
This is because one person can change everything — it is money after all, and it is so easy to make a mistake.
Having regular money talks with your family usually means increased communication between partners, a unified financial goal, partners being more involved, and so on.
In these regular money talks you can talk about topics such as:
- How your finances are doing
- Tracking your income and expenses
- Going over the family budget
- Discussing your debt
- Discussing your retirement path
- Openly talking about any current financial issues
- Understanding your financial goals
And more. These are just examples.
These are all great things to talk about because it can make difficult financial conversations easier to have over time. I know it can be scary at first, especially if you and your partner don’t talk about money, but it’s important to be honest, open, and working together.
This makes it easier to reach financial goals and achieve financial success.
7. Diversify your income
Having more than one source of income has many benefits, and I am a big fan of having multiple income streams.
Having multiple streams of income is good because you won’t be too reliant on one source of income (such as your day job), you can have a backup plan, you may be able to retire earlier, and so on.
Ways to diversify your income may include:
- Rental real estate
- Dividend income
- Starting a side business
Diversifying your income is a great way to reach financial success.
8. Save for retirement
Retirement is probably the #1 financial goal for most people.
This makes sense, as retirement has so many benefits.
Learning how to save for retirement is how you start preparing for your future. It’s necessary if you don’t want to work for the rest of your life or if you want to do things after you quit working, such as traveling or taking up new hobbies.
Even if you think that you love your job and will want to work forever, you never know what the future may bring.
So, it’s best to save for retirement!
You can learn more at How To Save For Retirement – Answers To 13 Of The Most Common Questions.
9. Track your money
To reach financial success, I recommend tracking your finances. This will tell you how much debt you’re dealing with, your net worth, where you stand for retirement, and more.
Plus, tracking how you’re doing can be a fun way to stay motivated towards your goals.
The tracking platform I recommend is Personal Capital. It’s free personal finance software, and it can track many different aspects of your financial life.
You can connect accounts, such as your mortgage, bank, credit cards, investment portfolio, retirement, and more, to easily see your whole financial situation in one easy place.
You can also track your cash flow, your spending, how much money you’re saving, how your investments are doing, and more.
How do you become financially successful?
Learning how to achieve financial success can be a long road, and the steps you need to take will vary from person to person — personal finance is personal after all!
The tips above will set you on a path to reach your goals so you can reach financial success, be happier, and take control of your money.
What does financial success mean to you? Share in the comments below.
giulia lombardo says
All great tips, thanks for sharing!!!
Elizabeth Okon says
Thank you for sharing this with us.
David @ Filled With Money says
I like these tips. The thing is they are all implementable by the average joe, not just the wealthy. Anyone can learn to diversify and add to their income source, but few are willing to put in the work to actually do it.
Great tips! I particularly like #9 on tracking money. It has definitely been a game changer for me over the years, showing me patterns that I wasn’t even aware about and promoting better habits! Do you by any chance find the need to use spreadsheets to track your money in addition to Personal Capital? I like the flexibility and control of using spreadsheets and wonder how others do track their money. As always, thanks for sharing!
Kathy Knapp says
Vicki – I agree. I like the flexibility and control using spreadsheets too. I use the online apps for tracking each month but use spreadsheets to analyze.
Great article! I like your idea on the emergency binder.
These are sound principles to create wealth. In particular, I think regular family meetings are great because it puts everyone on the same page, same vision, and it makes controlling expenses a bit easier.
To answer the question in the blog: financial success for me in particular would be replacing my W-2 job’s income via the 4% rule (so if my after-tax net worth was roughly 25X more than my pre-tax annual income).
Great tips, Thanks for sharing. All These Are Facts . Reading This makes me feel somewhat defeated due to past reckless and unwise decisions. But Iam so greatful for this information . I believe God gives second chances!