Meat Loaf sings Why Isn’t That Enough about his girlfriend leaving him! He sees his dream slipping away. He feels that there is nothing he can do about it. He says he wants her, needs her and loves her. Why isn’t that enough? You work hard at your career, dreams or staying out of debt. Why isn’t that enough? Here are five financial strategies , I know will make you successful.
Goals are desired results, a person plans and commits to achieve. When I set goals, I establish specific, measurable, attainable, realistic and time targeted objectives. I start with the outcome and breakdown the goals to what I need to do on a daily, weekly or monthly basis to achieve the goal. I monitor my results at each milestone and adjust my efforts to reach my goal. If I do not reach my goal, was my effort enough?
Saving for retirement is one of the most important goals of your life! Then why do so many of us do not save for retirement? If you save, do you save enough for retirement? Start with 10% of your pretax income into a 401K plan that grows tax deferred. This is not an all or nothing issue. If you do not save enough, you will not be able to do all the things you want to do in retirement. No big deal because retirement is so far off from now! So you have a good time spending the money you could be saving accumulating debt and having a good time!
Stay out of debt. If you are in debt, pay it off. Most consumer debt carries a very high interest rate. These usually involve credit card interest that ranges from 18-24%. Credit card debt and the associated interest and payments make those purchases extremely expensive. By the time you paid off the credit card debt, you probably have paid twice for the same item due to interest. If you were late or only made minimum payments, it could approach three times the original amount. Debt keeps you from putting that money into savings.
Buy a home. Has the real estate market changed after the bubble changed are desire to have a home? No, it just placed some additional hurdle to overcome. To qualify, you need a good FICO score, a down payment and sufficient cash flow to handle the monthly payment, real estate taxes and property insurance to get a home. Home prices have dropped significantly, your payment including taxes and insurance should not exceed 331/3% of your income. The amount should be lower if you have car payments or other debt.
Insure for what you don’t have. Life is not perfect! Is this a surprise? You bought a variety of major purchases that required debt. You bought a home, car(s), and you need income to pay for these things. If you are not there, you need life insurance or you cannot work, you need disability insurance. If you have a car accident or your home burns down, you need insurance to replace it. Medical insurance covers you if you are in the hospital or serious illnesses.
Why isn’t that enough? These are some of the things that most people say they want. I wrote an article some time ago called “How Do You Measure Success?” You would consider yourself a success, if you accomplished any or all of these goals. What are your goals? Do they include more than these specific goals? What is important to you? What is enough effort to achieve your goals? Can you look in the mirror and say you made your best effort? Are you letting your dreams slip away similar to Meat Loaf’s song Why Isn’t That Enough ?
Photo by: Chicago Art Department