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7 basics to master for financial success

There are several ways to achieve financial success – win the lottery, sell a company you started, marry into money – and yet for most of us the key to financial success will be mastering the basics of money management. Master these seven basic skills and you will be on your way.
How can someone master the skill of spending less than they earn?
It starts with not funding your monthly shortfalls with loans or credit cards. It also means that smart choices for cars and housing are extremely important. These two items can drive how much money you have remaining for all of life’s other expenses.
It seems that understanding needs vs wants will be important to spend less than you earn.
This is probably the foundational money skill that everyone must master to be truly successful financially. It is never too late to master this skill and it doesn’t mean you can’t have fun, sometimes only buying what you need frees up money to do those fun activities.
Why is making retirement savings a priority such an important money skill to master early?
The sooner you start saving for retirement usually means you will have more saved for retirement.  The additional benefit of starting early also means that you will not have to save as much per month.
Why is limiting debt an important financial tactic?
Borrowing for everything you do from vacation to buying furniture or appliances will almost always increase the cost of those expenses. If you use debt to finance appreciating expenses like homes or college education you are likely to provide a long term financial benefit.
We often here that we need to plan for the unexpected, how can we do that?
It comes down to saving, specifically having an emergency savings fund that you can use for those unexpected expenses or if there is a disruption in your income. This money skill is probably one of the most important to avoid long term financial distress.
It is often said that we shouldn’t overbuy, what would be items to avoid overbuying on?
Surprisingly, this basic financial skills covers almost any purchase.  Probably where it is most beneficial involves the purchase of homes, cars and college education. Don’t buy an expensive car or house just because you can afford the payment, you will be money ahead if you buy based on your need.
If you have mastered all of the other basic money skills, what is the final financial tactic?
Build a good team and support network which includes financial advisors, tax accountants, attorneys and any other advisors that are important to your financial situation.  Relying completely on your friends and family could be a financial disaster. Getting trusted advice is so vitally important to long term financial success.

Posted: 10/11/2016 with 0 comments

Categories: Finances, Money, Money Matters, Planning

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