Plenty of people are consistently motivated to make more money, but perhaps a more important goal for all is to actually hang on to that money. While it’s true that your income is a necessary tool for building wealth and eliminating debt, income is only part of the equation. Financial stability is accomplished by saving and managing money, not simply by making more money. Earning a six-figure income won’t help you get out of debt and build wealth if you can’t seem to keep any of your earnings.
Regardless of income, there are some common characteristics shared by all who are financially responsible. If you focus on strengthening these traits in yourself, you will find an added measure of financial success regardless of your income or current financial situation.
Financially responsible and secure people know their numbers. They know their account balances almost to the dollar, and track every penny that comes in or goes out. They know their debt, they know their credit score, and they know their budget. They check and balance their accounts daily to ensure nothing is out of line. This is how they avoid making purchases they can’t afford and living within their means.
You won’t find the “I want what I want, when I want it” attitude among the financially responsible crowd. These people can walk past an appealing purchase if they don’t have the immediate funds for it. They create a savings plan if they do have a big purchase ahead, but they know that impulsive behavior leads to trouble, usually in the form of debt. Patience and self-control are very important traits to develop for those on the road to financial freedom.
Designer and name-brand clothing are not appealing to the financially responsible. They know that all a label usually signifies is a higher price tag. Chances are there is a less-expensive product of equal value to the one with the designer label, and their bank account and credit score won’t have to suffer for it. They view a car as a means to travel and get them from one place to the next. To them, a Toyota is a much more feasible car than a Maserati.
Along with being rational, those in control of their finances are usually self-confident. They don’t need expensive clothing or a luxury car to impress others. They know their worth is not determined by their possessions. This freedom of self allows them to make logical purchases and live happily without the approval of others.
Those who are financially responsible always have a plan. They save a portion of everything they earn. In fact they likely try to save more than they spend. The saving mindset is the key to getting and staying out of debt, building wealth, and finding financial freedom.
Read our credit repair tips and tricks for more budgeting and financial advice.