Managing money effectively is a key success skill. Successful people make the decision to become effective with money, many of them early in life. Like any area of life, it is important to educate yourself about the threats and challenges in the world. Taking the time to master a few key principles will pay off for years to come.
1. They don’t overspend; they live on less than they make. Start by looking for ways to save money.
2. They don’t fixate on price; they understand the importance of value. Tip: Buy high quality products that will last for a long time.
3. They don’t waste cash on fees and interest; they know how to manage their banking
4. They don’t forget to adjust their finances after big changes in life. Sitting down by yourself (or with a financial expert) at least once a year to review your life and financial plan is an excellent way to stay on top of important changes. Arrange your finances for the long term with estate planning.
5. They are not satisfied with a stagnant income; they look for ways to increase their income. Increased income gives you more options for personal enjoyment, more capacity to give money, and a sense of security.
6. They don’t ignore financial statements. Successful people set a time each month–30 to 60 minutes–to review all of their financial accounts: investments, bank accounts, credit cards and more. When they detect an error or omission, they take immediate action.
7. They don’t take foolish risks in money. Remember: If it sounds too good to be true (or if you don’t understand how it works), slow down and start asking plenty of questions.
8. They don’t pretend to understand everything when it comes to money. Review your knowledge of money and investments. If you are just starting out, read one or two classic personal finance books.
9. They don’t transfer responsibility to experts. Successful people do seek out the advice of experts, yet they never yield responsibility. When seeking advice from professionals like accountants and lawyers, ask questions and seek to have the advice explained to you. Otherwise, it is difficult to act on the advice.
10. They don’t let the pursuit of money overcome other values. Significant financial resources give you more options to give to causes you believe in. It also means improved access to technology, health care and leisure. However, successful people understand that financial success is only one aspect of a successful life. For example, neglecting health in the pursuit of money is a poor strategy.
Review your personal goals to see if you have a balance between financial goals, career goals, family goals and other activities.