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Understand Where You Stand In Your Journey To Financial Success

Team Jar
December 27, 2022
Understand Where You Stand In Your Journey To Financial Success

Everyone wishes to achieve financial success. While the journey to financial success may not be easy, the result is rewarding. Read this blog to learn more.

According to the Statista Global Consumer Online Survey, 71% of urban Indians stated there was a very good or somewhat good possibility that they would become rich.  

Financial success can mean different things to different people. One may view it as owning a house, and another may consider it having a certain amount in the bank. Although the end goal can look different, the road to financial success is more or less the same. 

Tips for Financial Success

We focus on some milestones to help reach financial success:

1. Have an Emergency Fund

An emergency fund is a sum of money we must maintain in a bank account for emergencies. We can fall back on this fund if and when something unexpected occurs, like a medical emergency. We should refrain from using this money to meet our day-to-day expenses.

On the road to financial success, it is essential to have an emergency fund. It is recommended to have minimum three to six months’ earnings in the fund. If an individual is the sole earner in the family, the corpus to be maintained should be larger.

We should remember that the fund should be liquid. This means that when the situation calls for it, we must be able to make withdrawals immediately.

While working to be financially successful, keep an emergency fund in your priority list so that unexpected incidents don’t cause derailment on your road to financial success.

2. Invest

When we invest, we are putting our money to work. There are many investment instruments we can choose from. A few options include investments in gold, stocks, bonds, mutual funds, etc., depending on the risk profile and expected returns.

The financial success stories of every famous personality involve smart investment choices.

Investing can help us achieve financial success. For example, if we dream of buying a car, wisely investing can make this a reality. However, we must always remember that there are risks involved with investments. It is advised that our investments are diversified to reduce this risk.

3. Maintaining a Good Credit Score

A credit score is a number that reflects our creditworthiness. It indicates how responsible we are with repaying loans and credit card dues. 

A credit score of 750 and above is considered excellent. One of the tips for financial success is to repay all debts on time. A good score shows banks that we know how to manage our finances and may benefit from lower interest rates.

The chances of individuals with good scores defaulting are low, and therefore, lending institutions will seek to retain such clients. 

4. Getting Insured

We must have a life and health insurance policy. Even if our organisations have us covered under group policies, getting separate personal insurance plans is recommended.

A life insurance policy gives financial freedom to the policyholder's family in the event of their unfortunate demise. The payout will take care of the family's financial needs without requiring them to make lifestyle changes.

A health insurance policy keeps us secure against the cost associated with medical emergencies. This will help us on the road to financial success, as our savings will be intact since the insurance company will bear our medical bills.

Additionally, you can save taxes under Sections 80C and 80D of the Income Tax Act.

5. Retirement Savings

To be financially successful, we should save for retirement. Most individuals in their 20s or 30s haven’t given much thought about the financial resources they will need to sustain themselves during their golden years.

It is easier to save for retirement while we are young and don’t have much obligations. There is also the benefit of compound interest, which is the interest we earn on interest. Multiple investment options can be looked into.

We can even automate our financial planning with the Jar App.

 

Bad Habits That Can Keep us From Becoming Financially Successful

 

On the road to financial success, there are some bad habits that we need to watch out for.

Failing to Keep Track of Expenses

If you fail to track your spending habits, you may soon end up using your savings too! Some even end up with piles of debt. It is vital to record where the money is being spent every month to keep this from happening and be financially successful.

Setting Unrealistic Goals

While the desire to be financially successful is good, we must ensure that our goals aren’t exaggerated. For instance, if we want to save Rs 10,000 a month but can’t even save Rs 3,000 a month right now, it will be tough to achieve our goal immediately.

One of the successful financial strategies is setting targets that are more realistic and easier to reach, which means starting small and then working our way up.

Not Keeping Patience

We cannot achieve financial success overnight. We will have to set realistic goals and work towards them. Successful financial strategies include the right mix of investments, financial discipline, and budgeting.

All of these require considerable time and effort. Hasty actions can make us regret them in the future. We can easily learn how to achieve financial success with the Jar App. 

Conclusion

 

The journey to achieve financial success is not easy. However, the fruit of our labor is worth it. We must remember that financial success takes time. We can talk to a financial planner, who will create a roadmap to financial success. Lay out small milestones that we can reach quickly.

This will keep us motivated and help us develop patience. We can automate our financial success by using the Jar app! Achieve success with money by using Jar App.