Knowing the precise formula for financial success would be a leg-up in nearly every instance, but much of our evolution is subject to chance, fate, and countless factors beyond our control. Despite these influences, it is up to each person to squeeze the best possible outcomes from life’s circumstances – particularly when financial security is at stake.
In much the way each individual has unique personal strengths, financial expertise falls across a wide range of skill-levels and abilities. Some household money managers are simply better than others, when it comes to reconciling money matters. Yet we all bear financial responsibilities, whether or not we excel at balancing budgets, juggling debts, and making ends meet. Fortunately for inexperienced money managers, people have been devoted to financial understanding for decades, leaving a trail of knowledge and experience.
Model Success for Consistent Outcomes
While it may not provide a foolproof formula, modeling your financial behavior after others’ success can nonetheless help – starting with the following features of a sound financial approach.
Savvy – Though many Britons fall short on general financial know-how, financial savvy can stack the odds in your favor. Blindly feeling your way through personal financial matters, on the other hand, leaves you at the mercy of fate – or worse, a calculating opportunist preparing to take advantage of your financial naivety. Even with a sturdy background in financial fundamentals, you’ll run into unexpected challenges. But the more tools you have at your disposal, the better your chances of overcoming monetary setbacks, without lasting effects.
In addition to the nuts and bolts of running a household economy, your financial awareness should also extend to economic matters. Interest rates, housing market trends, investment performance and other economic influences have an impact on your financial security, so keeping-up with conditions gives you time to change course, if needed.
Restraint – Achieving personal prosperity calls upon money managers to use spending discretion. In fact, finding a workable balance between income and outgoing obligations is a central component of healthy finances.
Without restraint, discretionary spending can grow beyond affordability, leaving you in a perpetual state of “catching up”. And the way balances are compounded and interest charged; it is actually possible to lose ground, without even adding new purchases to your debt balance. If consumerism tests your financial resolve or you have a hard time sticking to a sustainable spending budget, bolster your defenses with these proven moves:
- Spending freeze
- Cost-cutting measures
- Financial counseling
- Automated banking
- Debt review
Perseverance – An old adage can be applied to financial concerns, encouraging you to try and try again. Professionally, you may experience setbacks, interfering with your financial stride. According to employment data, you are not the only one – millions of Britons report struggling with earnings and job concerns. Perseverance prevents you from giving-up and keeps you coming back – long enough to reap the benefits of hard work.
Investments are inherently risky, so perseverance helps investors overcome short-term performance problems, in favor of long-term financial stability. Whether passively investing in stocks and bonds or putting money into an active venture, it may take several run-ups to achieve the results you are looking for.
Adaptability – Financial success doesn’t always follow a linear path, so built-in flexibility can help carry your financial plans to fruition. Does your take-home pay leave you wanting? It may be time to change jobs, taking advantage of more lucrative career options. Is temporary financial pressure interfering with cash flow? Exploring short-term financing alternatives may furnish the fast cash needed to put you back on track. Do lifestyle choices eat-up earnings – even before monthly spending obligations are covered? Changing your ways may include strict budgeting, sticking to financial priorities and establishing spending limits in each major category. With an adaptable approach in place, you are prepared to thrive, regardless of what conditions arise.
Financial security results from a combination of good luck, hard work, and a steady approach to money management. Knowledge, determination, and flexibility are key ingredients, as well as the ability to restrain spending and model effective financial behavior. Equipped with these tools and a commitment to use them, even the most inexperienced money managers have a better than average chance of finding financial health.