Financial success means something different to every person. Some want to have enough money to pay the rent, pay their mortgage and just get by, while others seek to acquire a huge estate. You may want to be a millionaire by age 30, however most people just want to have a comfortable lifestyle. Few people reach financial success without restraining their current spending.
Becoming active in savings for future consumption is a habit everyone needs to get into. According to the book “Personal Finance,” by E. Thomas Garman, from the Virginia Polytechnic Institute and State University, lifetime financial goals generally cover 1.) Maximizing Earnings and Wealth 2.) Practicing Efficient Consumption 3.) Finding Life Satisfaction 4.) Reaching Financial Security 5.) Accumulating Wealth for Retirement and an Estate.
Maximizing Earnings and Wealth
Having an abundance of money and valuable assets requires one fundamental principal: spending less than you earn. Budgeting and planning for this is a top priority. Another goal then needs to be focused on maximizing your earnings. You can accomplish that through employment, entrepreneurship and/or investing. How you do this is entirely up to you and unique to your particular interests and passions.
Practicing Efficient Consumption
We use money either for consuming or saving. Efficient consumption comes from practicing good financial skills, like keeping good financial records, avoiding impulse spending, using credit wisely and keeping living expenses down. Failing to do this is often a result of carelessly spending money on non-essentials and ignoring monthly obligations.
Finding Life Satisfaction
Your satisfaction with life may come from being debt free, owning a home, going on vacations, educating your children, living well in retirement and leaving an inheritance for your children. All of these goals can be achieved through a variety of career paths and every day investment decisions. Financial success offers you a better quality of life whether you want to live well or give your money away.
Reaching Financial Security
Financial security is not about having earned a specific amount of money. It is more in the comfortable feeling you gain when your resources will adequately fill any needs you might have and most of your wants. Free from doubt, anxiety or fear about money is a wonderful place to be. You will need to have a career with potential, an adequate emergency fund, investments an estate plan and a will. Setting short term and long term goals is absolutely essential to achieving financial security.
Accumulating Wealth for Retirement and an Estate
Many financial goals are set to make sure that retirement is a time of life that is comfortable and enjoyable. Seeing this goal as a young adult is really a precious gift. The value of time in savings and investing is really priceless. Anyone who can see that from the start of their careers is on the right course to achieving financial security.
