Provided by US Bank

Achieving financial success isn’t about having a million-dollar idea. It’s about continuously taking small steps forward.

Actions have consequences. Nowhere is that more apparent than in the quest for financial freedom and independence. When it comes to achieving success, the choices you make every day and the attitude you bring to decisions about money are what make a real difference.

The lifestyle you lead ultimately determines how wealthy you become. But wealth is about more than income. Financial success is about more than money.

Money and happiness

Most people you would consider financially successful focus on financial freedom—a state where they are free from most debt and free from the worry that comes with it. It’s a peace of mind that comes from being financially independent and confident that you can handle any costly curve balls that life throws at you.

Financially independent people are happier than their peers who are not financially secure. Their happiness isn’t based on the biggest house, the most luxurious car or any of the conspicuous trappings of wealth. Impressing others isn’t their goal. Financial independence is.

Patience is a virtue.

Unless you win the lottery or inherit a fortune, the odds are you won’t become a millionaire overnight. Most financially successful people accumulate their wealth over time by making smart, disciplined decisions about how they’re going to live their lives.

They don’t chase get-rich-quick schemes or get sidetracked by the latest trends or best sellers on how to become a millionaire.
They have a clear plan, and they’re willing to dedicate the time and effort toward following their plan instead of frantically pursuing shiny, new tactics.

The Big Secret: Literally living below your means

Nothing has a greater impact on your wealth and your consumption than where you live. The house you buy and where your house is located are major factors in influencing your ability to accumulate wealth and achieve financial freedom.

Study after study has shown that most millionaires live in modest houses and neighborhoods even though they could afford extravagant homes in exclusive communities. More than frugality, many of them prefer middle-class neighborhoods to stay connected to longtime friends and neighbors of more modest means.

High-end homes at the top of the price range in prestigious areas also lead to a domino effect of increased spending that comes with “keeping up with the Joneses”–new cars, private schools, expensive sports programs, elite colleges, and more.

More rules for financial freedom

Here’s what most financially successful people have in common:

  • They have a budget, no matter how much they make.
  • They know exactly where their money goes.
  • They have a clearly defined set of daily, weekly, monthly, annual and lifetime goals.
  • They invest a significant part of their income before they can spend any of it.
  • They anticipate and plan their incomes and expenses, often far in advance.
  • They devote time to managing their money and planning tax-advantaged investments.
  • They pay off their credit cards in full every month.
  • Their adult children are economically self-sufficient.

Save more now to retire sooner.

One of the goals of many financially successful people is to retire before 65 or 70, while they are still able to enjoy traveling or even pursue the dream of a new career or business.

Years of living below your means enables you to contribute more to your nest egg, which delivers two big benefits: you have the skills and mindset to live modestly, and you can retire sooner because you’ll accumulate the amount you need to live on in retirement sooner.

A couple who makes $100,000 a year but lives on just $70,000 can contribute $30,000 to their nest egg, and can retire when their portfolio–along with Social Security and other benefits–can generate $70,000 a year.

However, a couple who makes $100,000 but spends $90,000 has just $10,000 to contribute to a portfolio that must eventually help provide $90,000 a year in retirement. Since they’re putting away less for the future, it’s going to take them longer to accumulate the amount they need to retire on.

Damage control

Financially successful people know that getting ahead is as much about what you do as what you don’t do. Here are some behaviors that can sabotage your efforts:

Don’t expect life to be fair. Everyone encounters setbacks in life. Feeling sorry for yourself and complaining doesn’t do anything to move you toward your goals. If you take a risk and fail, use the experience as a lesson. Learn from it, and move on.

Don’t follow the crowd. Financial independence is more important than conspicuous consumption in order to display your wealth and impress others. It’s a lot easier to appear wealthy than it is to actually be wealthy.

Don’t expect to be perfect. You’re going to have missteps along the way to success, and you need to be honest and own up to them. Admitting to being wrong isn’t a sign of weakness. Being able to acknowledge a mistake means you can change course and keep moving toward your goals.

Remember, financial freedom is achievable for anyone. Make a plan, stick to it, and let your core values guide your day-to-day decisions about money.

TDA Perks Program, along with ADA Member Advantage, endorses the ADA® Preferred Rewards Visa Signature® Card from U.S. Bank.