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Five Things That Can Keep You from Financial Success
Achieving financial success takes planning. But sometimes what you don’t do is as important as what you do. The real estate site Trulia.com lists five things that might be keeping you from having the financial freedom you desire.
1. Failing to track your spending. You probably know that budgeting is important in getting your financial house in order. But the basis of budgeting is keeping track of what you spend – every penny. In order to have an effective budget, you need to know where your money is going. For at least a month, write down everything – from your mortgage to that bagel in the morning. You can track it in an app, in a notebook or any other way that works for you. But you need to track it.
2. Failing to save for retirement. No matter how old you are now, the chances are that at some point you will be ready for retirement. However, unless you have planned and saved, retirement might not be ready for you. If you have a 401(k) or similar employer plan, put in at least 10 percent of your salary. Open an IRA. Where will the money come from? From all the frivolous and unnecessary spending that you discovered when you started tracking.
3. Failing to take saving seriously. You should put a set amount into your retirement or other savings every month. And you should treat that contribution as if it were a bill. Don’t think about as something you can choose to do or not do. Don’t get in the habit of skipping a month if there is something else you want. After all, what would your mortgage company say if you told them you could not make a payment because you bought new pair of shoes or took a long weekend?
4. Failing to learn about finances. The chances are very good that you never learned basic financial things – like how to handle credit or make a budget or get a mortgage – when you were in school. So learn now. There are many resources available online. You also could find a financial adviser to help you understand your options and start setting goals and working toward them.
Not having a financial plan. How can you achieve your financial goals if you don’t know what they are? There are many kinds of goals – short-term (buying a new couch or taking a short trip), mid-term (buying a new car or getting a nicer apartment) and long-term (buying a house, saving for your children’s college education, retiring). The more specific you are about what those goals are and how much they will cost, the sooner you can start saving and investing for those goals, and the more likely you are to reach them.