One common goal shared by many is achieving financial success. But everyone has their own picture of it. Some want to buy their own house and retire early, while others prefer to focus on cutting off every debt on their list before they hit 40. No matter what’s in it for you, financial success requires consistent effort and great control over money.
More than that, you need to master other things such as financial literacy, balance, and perspective. Each of these plays a role in creating your spending plan, paying off your debts, setting up retirement and savings plans, and investing in the right instruments. On the other hand, there are things you need to give up. Here are some of them:
You might be thinking, “How does a personality style like perfectionism impact my financial success?” We hate to tell you this, but it can impact your finances big time. People with this personality style tend to get stressed out and give up when their plan doesn’t work out. It could be a savings goal, a new monthly budget, or a potential investment. Understand that financial success is a long endeavor, and it requires patience and determination.
Being afraid of failure can make your financial journey longer and harder. While setbacks are expected, there are things you can do to minimize the risks. You can create a budget that fits your current income and expenses, use your credit card more cautiously, have an emergency fund, and increase your income streams.
2. Bad company
Believe it or not, the people around you can influence your financial success in different ways. Their attitudes and habits can affect your financial choices, from spending to saving. People have different spending personalities: those who love living large, people who’ve already arrived financially, and there are spendthrifts. Keeping up with any of these groups will lead you to bad finances. If you’re always with people who spend more money than they should or have, you’re likely to do the same. May it be on high-cost vacations, expensive apartments, or unnecessary entertainment.
Surround yourself with people who are financially responsible or have the same personal and professional goals as you. Being with friends whose aspirations align with yours can make your financial journey more achievable and easier. This doesn’t mean that you should pick your friends based on their attitudes towards money and career. Instead, be aware of who you spend the most time with.
3. Too much debt
An average household has around $7,000 of credit card debt alone. If, for instance, you have the same amount of debt with a 15% interest rate and are only making minimum monthly payments, you’re likely to pay about $10,000 in interest for 28 years. This is why carrying too much debt is not good for your finances. While credit card debts are generally considered bad, some debts may benefit you in achieving financial success.
For example, mortgage loans are historically a good and safe form of debt. A mortgage can make a real estate purchase more manageable and eventually help you build home equity through monthly payments. All you need is a solid grasp of the real estate market and knowledge about how much you can borrow. Student loans are another type of good debt, which is essential if you can’t fund a college education. Now, what you should avoid is a high-interest credit card balance.
Most people don’t fully understand their financial personality, which makes money choices confusing. Instead of improving their financial habits or changing their money personality, these individuals micro-manage their money. They think knowing even the granular details about their finances is the best method to achieve stability.
Micromanaging may seem like an ideal ritual for many. After all, you get to know where every penny goes. However, if you don’t have the needed high level of control, micro-managing can only lead to great stress. Financial experts also recommend avoiding withdrawing your money when the market zigs or zags. Reshuffling your investments every time things get risky in your chosen industry sector. This is worth considering, especially if you’re planning for a long-term financial goal.
By getting rid of these things, you’re making positive changes not just in your finances but in your life. Prevent yourself from facing the same problems by ditching your bad habits and choices. Your success depends on your habits and choices, so choose them wisely. Involve yourself in healthy routines and meaningful activities, and your financial health will surely go with the flow.