Financial success, for each person, is something different. Some believe that financial success is being able to travel on vacation every year, whereas others believe that success is maintaining a balanced life. To do this, you’ll want to maintain a good relationship between personal and professional.
In addition, some care a lot about financial security. People like this want to have an emergency fund to resolve matters that sometimes arise outside the planned budget.
No matter how you see financial success, what matters is being happy!
Thinking about these various possibilities, we conducted a survey with our customers and compiled the main tips from those who successfully implemented the habit of saving and investing. These people have already achieved financial security by patiently working towards their goals.
But first of all, what is financial security?
Financial security is having enough to pay household bills and cover essential expenses such as health and education. On top of this, having an emergency fund to solve unexpected problems, such as maintenance on the house or car, is also an integrated part of being financially stable.
To achieve financial security and make your dreams a reality, consider organizing your accounts and creating a solid financial plan, particularly if you currently have debt.
7 tips for achieving financial success
Cheaper housing options
All the people we talked to said that spending on the house consumes most of their monthly budget. Even so, they strive to keep that expense as low as possible.
None of the survey participants spend more than 25% of their net salary on housing. Opting out for smaller apartments and housing options in cheaper areas can keep these costs even lower.
Lowering food and basic items costs
When we talk about food, we’re talking about your everyday meals. This doesn’t include takeaways and restaurants.
Basic items include cleaning and hygiene products, services, and personal care.
In general, people in this survey claimed they spend up to 15% of their monthly net salary on these expenses.
Having a car
Let’s assume that the car you own is already paid off. And that’s the best case! However, even then you’ll be spending your money on fuel, taxes, maintenance, and tolls.
In this case, your expenses should be less than 5% of your net salary.
Clothing was the item with the greatest difference in opinions and consumption habits, although an average value of 5% of net salary was found among the surveyed people, so that’s the amount you should go above.
In the cases we analyzed, most investors, at some point, traveled to popular tourist destinations in the world. However, in recent years, these trips have become more expensive. That’s why many of those who achieved financial stability now prefer house rental holidays within the US.
These expenses usually happen once or twice a year, but even when they become a monthly thing, they should not exceed 5% of the net salary.
Costs at places such as bars, restaurants, music events, and weekend trips are all considered entertainment costs. These types of expenses, such as an international band concert, are not as frequent but typically should not exceed 10% of the net salary.
Financially stable people typically take advantage of clearance sales at their preferred stores and avoid risky investments such as gambling, and that’s something that you should do as well.
Remember, while it is important to keep yourself happy and entertained, bad decisions could easily lead you to the point where your budget becomes cost-ineffective.
Saving money is not enough to achieve financial success
Saving money is the first step to achieving financial success. This is, of course, in addition to learning how to budget your money and control spending. However, saving is not enough to achieve financial security for most.
You also need to find ways to make that money work for you! Don’t let it just sit around, especially in today’s time when inflation slowly but surely chops away its value.
How to achieve financial success with a private pension
A survey carried out by Dow showed an interesting fact. Investors with greater assets diversify investments, while small investors leave 70% of their earnings in savings.
This happens mainly because this is considered a reliable and safe investment. But there are several other investment possibilities that provide the same security and still deliver a more interesting return.
Savings are only good for banks.
A great way to collect money is a private pension. This money can be used for your short, medium, and long-term goals, and has a number of benefits, including tax advantages. Contributions are received monthly, through automatic transfers or bank slips.