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3 Foundations for Financial Success

A recent title, “Simple, Bedrock Rules on Personal Finance caught my attention the other day, and I was proud to say that I could check off many of the rules on the list. If you’ve been following Life and My Finances for any length of time I’m confident you’ll find plenty of articles that elaborate on many of the rules in the list. To name a few:

Rule: Teach your kids about money
Article: Two main things kids must know about money

Rule: Tune out advertising
Article: Are you a sucker for advertising?

Rule: Cut the waste
Article: 5 ways to throw money away

Rule: Keep it simple
Article: 6 ways to simplify and be more productive

Thinking back to where I started on my financial journey, I can narrow down the wisdom I’ve obtained into three main foundations for financial success that have been a constant over the past few years. Sure, I can tell you how to eat healthy on a budget, save on a gym membership, or lower your energy bill but these 3 basic tips have really laid the foundation for the rest of my financial decisions.

april budget1. Establish a budget

How do you know where you stand financially if you don’t have a way to track your income and expenses? If you need an example to help you get started, you can see how I set up my own budget and stick to it. You don’t need anything fancy and not everyone needs to budget down to the dollar. I’ve used the same Excel sheet we created 5 years ago when we kept track of every dollar. I’ve continued to do this simply because it’s become the norm and it doesn’t take much time or effort to keep up with. If excel sheets aren’t your thing then there are plenty of apps like Mint or Home Budget you can use. If you don’t start with setting up a budget it’s going to be difficult to implement the next tip.

2. Set goals

I can’t believe how much my husband and I have accomplished in under 5 years of marriage. We paid off $30,000 in student loans, funded a 6-month emergency fund, paid over $30,000 toward our mortgage in less than two years, saved up to replace an old car, and increased our tithe and savings to 15% each. We wouldn’t be as far as we are now if we didn’t set goals. If we hadn’t made a goal to put $12,000 toward additional mortgage payments in 2015 then I’d surely be tempted to add some new clothes to my wardrobe or buy a new gadget. This goal has lessened the temptation to cut corners because we really want to accomplish it!

3. Seek out people who are ahead of you

I started following Derek’s site, Life and My Finances, in 2011 and I learned a lot from him as a newbie in the financial world. My husband and I were going through Dave Ramsey’s baby steps at the time so I eagerly sought out information about personal finance and soaked up all the wisdom I could. I’ve continued to learn from Derek’s articles and have been motivated by other “average joes” who don’t make a ton of money but have knocked out some pretty sweet financial goals due to perseverance and hard work. I find the app Bloglovin’ very helpful for learning about relevant topics on food, fitness, and finance (side note! you can follow me on Bloglovin’: Budget for Health). I may not be in school anymore but my plan is to never stop learning.

These 3 foundations for financial success helped me get the ball rolling in my own journey and take control of money instead of being controlled by it. You can think of these tips as the first 3 dominoes you set up; once you get these started you’ll find that motivation. Then, momentum will pick up and you’ll be well on your way to financial freedom.

What resources have helped you get closer to financial freedom?

This post has been written by Jessica from BudgetForHealth.com.

Budget Money

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

4 Comments

  1. Definitely a budget is the #1 starting point. This helps me to keep my spending on track so that I don’t go into debt.

    A close #2 is automating my savings. I have money taken from my checking account the day I get paid. With it never being in my checking account, I never miss it and it guarantees that I save money.

    Finally, #3 is to keep investing. Regardless if the market is up/down or sideways, I am always putting more money into my investments so they keep growing.

    • Great tip regarding #2! We feel the same with our investing. I appreciate the “set it and forget it” ease of automatic payments.

  2. Great tips! I think for us setting goals comes before setting our budget. Then we can see if we’re willing to cut our expenses or go out and make more money.

    • That’s a good point. Your budget will certainly reflect your goals if you know what you’re aiming to do with your income. Thanks for sharing, Emily.


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