One recent article mentions that the average amount of student-borrowed debt in the USA as of 2016 is $25,000 per borrower. Approximately 1.1 million people in the US have student debt that has topped six figures. Across the US as a whole (so this obviously allows for regional ups and down…but you get the idea), in 2015 there were nearly 1.1 million properties with active, in-progress foreclosure filings.
Another account stated that approximately 43% of Americans are living paycheck to paycheck…which means that if they miss one paycheck….they would not be able to cover their bills for that month. ONE paycheck. A recent poll conducted in 2016 revealed that 56% of Americans stated that they had less than $1,000 in savings or checking COMBINED and that 24.8% of Americans have less than $100 to their name in any account that they own after paying their monthly bills.
So, all these statistics and figures aside….what is the point here? The point is that as a country, as a community, as families and as individuals a huge percentage of us are living a game of financial roulette on a daily basis. We’ve got a major money management problem.
Thousands of people are one step, one lost job, one medical emergency, one missed paycheck from financial disaster.
We live in a world of harsh comparison. It is commonly circulated that people who “make it”, who have financial assets; “good jobs”, etc. were given the position, status or finances that they currently have. There is this underlying implication in this thought process that people who succeed must have had more opportunities than we do or else we too would surely be in the same boat. But really…is that true? Did the people who “made it” really get to where they are because others did the heavy lifting for them? Or did they put in a LOT of hard work to get there? Maybe the playing field is more level than we’d like to think…..
In reality, did you know that roughly 80% of millionaires in America are first-generation millionaires? Therefore, this “it was given to you” assumption is only correct about 20% of the time. If you’re a betting person, those aren’t great odds. This means that most people in a strong financial position worked their way into that position. It’s often assumed that people with higher incomes have high-paying jobs, however, an estimated 50% of millionaires are self-employed (and started their own companies from the ground up) and only about 18% of them have a degree above a Bachelor’s degree.
So, you may ask, what’s the point? “Maybe I have been wrong on a few statistics” you say. Or maybe you don’t believe these ideas at all. And that’s ok. But if you’re open to the idea that you do have control over your financial future and that you can develop a plan and change your finances….check out these:
Top 5 Things That Financially Successful People Choose To Do
1- ) They Make a Decision and Stop Making Excuses:
Whew! We jumped right in on that one, huh? But did you know that this is one of the TOP things that CURRENT self-made millionaires recommended? What we tell ourselves routinely becomes the reality that we live. If we tell ourselves that there is no way to reach our financial goals, to buy our own home, to pay for your kid’s college, or pay off debt….then guess what? We’re probably right. It won’t happen. But it’s not because it can’t. It’s because we made the decision not to. Whatever your decision or goal is….kick the comparison and excuse game to the curb, embrace your goals, pursue it and make it happen.
2- ) They Make a Budget and Stick With It:
As we outlined in another article, if you don’t know what is coming and going out of your home’s budget, you are at a loss to get started on changing the direction of your finances. Bite the bullet, sit down and create a list of expenses versus income. Make a plan and stick with it. If you need help with ideas on how to make this work, check out our previous post here.
3- ) Make a Will & Get Life Insurance:
People who succeed financially have a common theme: they plan and they think ahead. Enduring a rough few minutes to sit down and think about how you want your assets distributed, what death arrangements you would like to have made, what your plan to care for your children looks like (if applicable), as well as outlining what is left for your family to handle in your absence makes a huge difference for your loved ones. You may choose to meet with an attorney to outline your will, or you may choose to utilize an online form (like this option). Life Insurance can help make sure that your loved ones are not burdened with expenses. You may choose to have enough life insurance to cover the mortgage, to cover funeral expenses or to fund your children’s college. Just make sure that your life insurance it tailored for your needs.
4- ) Contribute to Retirement:
Compound interest works in your favor in a crazy way! Starting right now in your contributions to retirement will put you light years ahead of your peers who don’t contribute now. Make retirement contributions part of your budget plan. You can choose an annual drop, a monthly contribution, or any other method that works for you. …just make sure you do it.
5- ) Select a Trusted Financial Adviser:
Think that financial advisers are only for people with money? Think again. In most cases, those people have money NOW because they sought good advise early on. Vanguard released in 2014 that 70% people who had a trusted, quality financial adviser were ahead of their retirement goals whereas only 33% of people not working with an adviser were ahead of their retirement goals. Whatever your stage of life, having a trusted adviser can be an amazing resource to help make decisions on retirement contributions, 401k roll overs, Life and Estate planning and so much more. Also, a large percent of financially successful people report that having an adviser gave them a sense of accountability. Once they created a plan and broke it down into steps, they knew the plan and it felt more manageable.
Einstein once stated that, “Insanity is doing the same thing over and over and expecting different results”. If we want different outcomes than what we have previously experienced, then we have to make changes. These five tips are a great place to start. You can also look into community programs that offer free one-on-one advising with financial coaches. There are options and (free) resources if you do a little research ;-)
Kelley Dale, CPIA
KD Media Works