Экономические науки/3. Финансовые отношения
Tkachenko K.O., Zubrilova Y.V.
Donetsk National University of
Economics and Trade named after M.
Tugan-Baranovsky, Ukraine
3 Steps to Personal Financial
Success
What is the definition of financial success? For many of us it
means different things. And for most people it is a vague definition without a
set number or desired result. Most people declare that they want to be
"rich" or have enough money so that they don't have to work.
Financial
success - the ability to be able to pay bills without worry, be free of debt,
help others with our time and financial resources, save our children's college
tuition/trust funds saved in the amounts of (amounts here), and are on track
with our savings plan to have saved the money we want to have by (our date
here).
One of
the most important things for being a success in anything is clarity. If you
are single, you must be clear as to what it is you are trying to accomplish for
yourself. If you are married, you must both be clear on what it is you want
together, as well as individually, and put a game plan together to begin,
gauge, and accomplish your goals.
Step
1 - Establish Clearly Defined Financial Goals. In order to reach a
destination, you must be able to see where you are going. Have you ever tried
swimming through mud? It would be very hard to do. In addition, you wouldn't be
able to see where you are going and the frustration would probably lower your
determination and you would give up. If you don't have financial goals set,
this is exactly what you are doing.
Clearly
Defined Financial Goals allow you to see where you are, where you are going,
and gives you a way to track your progress. You can see the dangers and avoid
them. If you get off course, you can see where you came from and adjust your
direction. Goals in any part of your life give you this power.
Step
2 – Spending habits and creating the Budget. We spend on things that we
need but more so on things that we don't need, but want. Some of that stems
from the fact that we refuse to deny ourselves pleasure and we don't want it
now...we want it yesterday. Marketers know this and they prey on it. They show
you the product in all its glory, all of the benefits you can get from it, and
what others say about how quickly they saw results. Like lambs to the
slaughter, we fall for it, make the purchase, use it twice, see no results, and
then let it sit in the closet for the next five years.
Your
spending habits can generate an undesirable future for yourself. Spending on
impulse, spending when you find "deals" that you haven't budgeted
for, or keeping up with Mr. or Ms. Jones are terrible spending habits. A deal
is only a deal when you have the money for it.
You
will never see the light of day if you don't set boundaries to your spending.
You will continue to impulse buy if you don't give yourself other choices for
your spending. You will continue to buy things you don't need or will not use
if you don't create a budget.
So how
do you budget? Well, you take everything that you spend money on and categorize
it. Everything. From apples to zebra slippers, you have to put these
expenditures in a category and put a set amount on how much you will spend in
that category. Of course, you will need to know how much you bring in on a weekly
to yearly basis.
Your
budget can be as detailed as you like. The more detailed, the better. If you
decide to stop by the store and pick up a stick of gum, include that in your
grocery totals. Make lists before you go grocery shopping. This keeps you on track
with your budget. You may be able to pick up a few extra things here and there,
but you must adjust your budget to reflect, and shuffle your money from
somewhere else to cover the expenditure.
Step
3 - Save Some Money. Obviously, you cannot be a financial success if you
don't have any money or are not living the lifestyle that you envisioned.
Question: Do you know what your net worth is? Many people don't and are afraid
to even try to determine what it is. It may just be the one thing to get you
taking action towards saving your money.
You
should save more than 10% of your income, but it all really depends on how much
debt you are currently working with and where you want to be in the next year,
10 years, or by retirement. If you have debt, it is important to get that debt
out of the way.
So what
to do? Save enough for a cushion. Determine how much you may need for quick
emergency cash, and save this amount. Once there, devote however much you were
putting away into these accounts to paying off your debt as quickly as
possible.
Before
you save your money answer these questions:
1. What is my
purpose for saving this money? (Very Important)
2. How much of a
risk am I willing to take?
3. Will I be able
to get to my money quickly?
4. Are there any
penalties for getting my money?
5. How much do I
want to save?
6. What reputable
company should I save / invest with?
7. How much am I
able to put aside monthly to achieve this?
8. How long will I
be saving for?
It’s
better to separate your savings into multiple accounts (Christmas savings, car
savings, retirement savings, etc.) and for each, make choices that will be
conducive to how you will use the accounts.
And
finally take action! It is important that you are clear about what it is that
you want to do, seek professional help (for your money, not your mind) if
needed, make a decision, then do it! Become the financial success, that you
have always wanted to become, today.
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