The end of the year tends to stir up feelings of reflection for many of us. What are you proud of accomplishing? What do you hope to improve upon next year? While eating healthier, exercising more, and flossing are at the top of many people’s lists of resolutions, this year take your financial health into consideration, too. As you look ahead and set new goals, consider these ten habits of financially successful people:
They live by a budget.
We’ve said it before and we’ll say it again: use a budget! For starters, creating a budget is a great way to ensure that you’re aware of your personal financial situation, and especially of the relationship between your income and your outgoing expenses. While creating a budget is important, abiding by it is even more important (and more challenging!) Having the discipline to live within your budget — and ultimately within your means — will help set you up for long-term financial success.
They understand the value of money.
Money doesn’t grow on trees. You know it, we know it, everybody knows it, and yet, some people still spend their money as if it does. Understanding and appreciating the value of money is a cornerstone of financial wellness.
They save and invest in their future.
The earlier you start saving and investing your money, the longer you have to accumulate wealth; it’s simple math. Save a portion of your paycheck each month by having it directly deposited into a savings account. Invest at a young age to allow yourself to take on a riskier portfolio, as higher risks equal higher rewards. It’s never too early to start planning for your future.
They set SMART goals.
Setting “SMART” (Specific, Measurable, Attainable, Relevant, and Time-bound) goals allows an individual to create defined objectives with set completion dates, increasing the likelihood that their goals will be achieved.
They keep debt low.
While we understand that taking on debt isn’t always avoidable, it is important to be diligent about any debt you do take on and pay it off in a timely fashion. If you have student loans, for example, be sure to factor your monthly payment into your budget and make your payments on time.
They think long-term.
What may grant you instant gratification today might not be a wise financial move for tomorrow. People who are financially successful realize that long-term fiscal goals are an important factor to consider when making today’s financial choices.
They are patient.
Financial stability doesn’t happen overnight. Just like it’s important to think long-term, it’s also important to remain patient, ride out any bumps in the financial markets, and stay your course.
They prioritize financial literacy.
There is a lot to learn when it comes to the world of finance, and while you don’t need to know it all, having a basic understanding of important terminology, economic trends, current events, etc. is very helpful when it comes to managing your money.
They keep recurring monthly costs to a minimum.
Your Netflix account, phone bill, gym membership, HelloFresh subscription…these recurring monthly expenses add up quickly. Financially successful people understand that keeping these types of expenses to a minimum significantly helps keep their spending in check. We’re not saying you have to get rid of all your monthly services, just make sure that the ones you choose to keep are worth their value and fit into your budget.
They work with professionals.
No matter how on top of your budget you are, how in the know you are about the current financial climate, or how much you contributed to your 401(k) last year, it never hurts to have professionals in your corner. Don’t be afraid to seek a second opinion on your financial picture.
At The Humphreys Group, we have spent nearly 40 years dedicating ourselves to helping clients make decisions that put them on a healthy financial trajectory. Are you ready to set yourself up for success? Reach out to our team today.