Top 10 Tips for Financial Success for 2018

Financial success for 2018 can mean different things to different people. For some, it may mean finally ‘landing that well-paid job’ or getting those orders that serve to bring wealth. Others simply see financial success as being in a place where bills and emergency expenses are covered and there is still ‘a little something’ left to afford the odd luxury.

Financial Success for 2018

If you dream of being in a financial situation that allows you to get from one end of the month to the next without the worry of how your bills are going to get paid, have a small fund ‘stashed away’ to help deal with any emergencies life may throw at you without descending into mindless panic and still have enough money left over to afford a holiday or some other luxury, the following tips should help you achieve this dream.

Tip 1 – The Emergency Fund

Putting a little money away into an emergency fund each month offers several benefits:

• It eases money worries by giving you a reserve you can use in case you hit a ‘tight spot’
• It will cushion the blow of sudden emergencies like, for instance, large medical bills or unexpected unemployment
• It provides an in-between funding source for any unforeseen expenses occurring between paydays and prevents having to ‘dip into’ any long-term savings/investments you may have to deal with such expenses

Finally, and perhaps most importantly, an emergency fund is an excellent money management tool, because let’s face it: if you can save for this, you can save for anything!

Tip 2 – Getting out of Debt

Getting the most out of your income means getting completely out of debt. Yes, you could argue that some debts are ‘good’ debts (like your mortgage or student/investment loan, for instance) and others are ‘bad’ – but in the long run, all debts are bad, because ultimately, they represent a long-term drain on your resources. Here are just some of the reasons why paying off all your debts as quickly as possible is a good move. Paying all your debts off:

• Gives you complete control over all your income – which is an unbelievable feeling!
• Leaves you with more readily available cash for saving, investing and spending.
• Removes that asterisk from your monthly finances (i.e. I have an income of £*,ooo per month, but £*00 has to pay my debts)
• Removes the stress and worry that inevitably accompany debts.

Tip 3 – Planning for Early Retirement

One of the most highly rated financial goals is planning to retire at 50. Here is why:

• Reaching retirement goals occasionally takes longer than planned. Planning to retire at the age of 50 gives you plenty of time to make it by the age of 65 in case you hit a snag or two.
• Early retirement may become a necessity due to ill health. Planning and preparing for early retirement will mean you’ll be ready should such a situation arise.
• Early retirement gives you more time to spend with your family should changing circumstances require you to do so.
• Even if you have no wish to retire fully early, planning for an early retirement will allow you to take things a little easier and not work quite as hard later on in life.
• Being able to take early retirement and not doing so is better than needing to take retirement and not being able to.

Another advantage of planning for early retirement is that you will be creating a larger retirement investment portfolio earlier – which means you will not have to work quite as hard to save for it later in life.

Tip 4 – Creating Multiple Streams of Income

Drawing income from multiple sources is one of the better financial goals to aim for, as it provides a kind of income insurance. You don’t, after all, know what may happen and even loving the work you do is no guarantee that it will last forever. Here are a few more reasons why you should consider creating multiple streams of income:

• One of your income streams could help pay off any debts, help fund retirement savings or give you the necessary cash-flow to semi-retire at an early age
• If you are considering starting your own business but are not quite ready to quit your full-time job, starting up a part-time ‘side-business’ could be the solution
• Having several incomes means you will never have to depend on a single income, which, of course, gives you far greater financial security

Last, but by no means least, having multiple incomes makes achieving other financial goals a great deal easier.

Tip 5 – Living Expenses vs. Income

Can you live on less money than you earn? Learning to do so is a fantastic goal, because it frees more of your money for paying off debts, savings and investments.

Tip 6 – Ending Addictions to ‘Stuff’

Are you addicted to cramming your home with all kinds of ‘stuff’? Is buying all this ‘stuff’ draining your financial reserves? While ending this addiction is not a financial goal in itself, it will remove a whole range of problems that could prevent you from achieving other financial goals. Here are some of the obstacles an addiction to ‘stuff’ could put in your way to stop you from achieving financial success for 2018:

• Tying up your money and generally providing no financial benefits whatsoever, stuff is essentially a capital trap
• Any money used to buy stuff is money not put into productive investments
• Stuff may give you comfort, but only growth-oriented or income producing investments will improve your station and bring financial success into your life
• Piles of stuff need storing and as these piles grow, you will need more and more space to store them – this could leave you looking for bigger homes every few years, complete with all the related expenses
• In times of financial difficulties, you could develop an obsession to maintain and protect your stuff – which is obviously not what you should be concentrating on during such times

Getting and looking after your stuff also takes up a lot of time, leaving you less time to spend on activities that are more productive.

Tip 7 – Doing Work You Love

Creating multiple income streams, ending your ‘stuff addiction’, planning for an early retirement and paying off all your debts all serve to achieve one ultimate goal, namely gaining financial independence and with it the ability to do the type of work you love doing (even if it pays less than the job you’re in right now). At the end of the day, working should not just be about ‘making money’ – it should be about achieving a sense of satisfaction and feeling good about yourself and your life.

Tip 8 – Getting Comfortable About Giving to Others

If giving some of your money to those who are less fortunate than you makes you feel uncomfortable (maybe because you fear subsequently ‘going broke’ yourself as a result), it is likely that your life is completely controlled by money. Money should never control you, no matter how much (or little) of it you have. Here are several excellent reasons why sharing your good fortune is good for you:

• Giving money away asserts the power you have over it – you know it will eventually come back
• Helping people in need allows you to become part of the solution – not the problem – in the world
• Hoarding money is about security – letting go of money is a celebration of its value
• Giving feels good, especially because you know you can

Finally, giving means getting and while this may not necessarily be in financial form, you will gain personal satisfaction, new friendships and potentially even help when you find yourself in need.

Tip 9 – Covering Contingencies with Insurance

Getting the right amount of insurance cover can be a tough call. Some people have nowhere near enough cover, others pay way too much by having excessive cover. Getting the balance right is a worthy financial goal – and here are a few strategies to help you strike the right balance:

• Consider keeping your car insurance at the lowest possible price, especially if your safe driving history is long. Shopping around and comparing quotes is a great way to cut this expense down to a minimum while getting maximum cover.
• If you have health insurance, consider taking the highest possible deductible/excess (you can always cover the difference with your emergency fund) – if you use your insurance only occasionally, the lower premiums will give you plenty of extra cash to play with.
• Life insurance is essential for people of any age, as it can help cover funeral expenses and secure your family’s financial future in the event of your death. Here, too, getting the balance right is imperative. You want to make sure you have sufficient cover to do all the above, but without getting so much cover that you are worth more dead than alive. To keep your expenses down, you may want to consider sticking to term life insurance, as this is generally cheaper than including critical illness insurance into the policy and allows you to get just the right amount of cover you need (this should be enough to cover any large debts, like a mortgage or loans you may have, so as not to leave your family in a financial mess) without paying over the odds.

Tip 10 – Getting Professional Advice

Getting a good financial advisor can go a long way towards achieving financial success for 2018. Our team of experts here at Spectrum FA can, for example, help you get the right kind and amount of personal protection insurance to protect your family and/or your business against the financial impact of unexpected long term illness, critical illness or death. To learn more about the services we provide and/or arrange a free no-obligation review, give us a call on 01279 315 013, contact us online or e-mail us at info@spectrumfa.co.uk today.