We all want to be financially successful, right? Financial success does not mean the same to everyone. However, most agree that it means peace of mind, a life free of stress over money.
Maybe being financially successful also means being secure in our financial future. The big question is, though—how do we become financially successful?
Grit, the Determination to Reach Your Goal
Dr. Angela Duckworth wrote a groundbreaking book about why some people succeed and others do not. After years of research, study, and observation, she found one defining factor—grit.
Grit is the determination to reach your goal, no matter what happens. Dr. Duckworth defines grit as, “working strenuously toward challenges, maintaining effort and interest over years despite failures, adversity, and plateaus in progress.”
According to Dr. Duckworth, successful people are not necessarily the smartest. Nor are they necessarily the best educated. In her research, Dr. Duckworth found that each successful person possessed grit—the ability to stay focused on the goal for a very long time. This alone enabled them to overcome all obstacles in the way of reaching their goals.
To be Financially Successful you need Grit
We can apply this same quality when looking at how to be financially successful. As we’ve written before, the path to financial freedom is one of discipline—visioning your life goals, budgeting, tracking your spending, saving, minimizing debt, and paying your bills on time.
Each step of the way is fraught with obstacles. Even visioning your future has its challenges. Probably the biggest obstacle is simply to get started!
Budgeting—you need to budget
It takes a little bit of time, but ultimately you do it. But, then you forget about it. And, you fail to follow it. And, you end up broke at the end of the month.
At this point, you can feel like you have become a financial failure, or you can dig deep inside and use grit to help you get back on track. With grit-consciousness, you realize that failure is not fatal. Instead, you see failure as an opportunity to do better.
Prepare a new budget. Make sure it more realistically reflects your actual expenses and income, and your short-term and long-term financial goals. Did you take on debt, such as credit card charges, to cover the deficit? If so, then you need a debt elimination plan.
Using your grit moves you past the emotions of failing to live up to the financial expectations you set for yourself. Grit helps you keep your eye focused on the goal, realizing that the goal of being financially successful is a long-term one.
Tracking Your Spending
In previous blog articles, we have stressed the importance of tracking your money. The only way to know how you are doing with your budget and financial goals is to know where your money is going. When you track your money, you might find that you are wasting or losing money on stuff that is not helping you meet your financial objectives.
Now you come to the end of the month, and you haven’t tracked your spending. Perhaps almost the entire year has gone by and you haven’t paid any attention to what money is coming in and what is going out. You are living paycheck-to-paycheck. You are not any closer to the financial goals that you set for yourself at the beginning of the year. It looks like a failure.
Grit reminds you that the goal is long-term. And that the pathway is filled with ups and downs, curves and obstacles. Do an immediate assessment of where you are now. Find all the receipts that you can, look at your credit card statements and bank records and analyze what went wrong. Then, start over. You may have to work a little harder now, but that’s okay. Your eye is on the goal and grit is going to carry you over the finish line.
This one comes with lots of obstacles and distractions. We all know that we need an emergency savings fund and we need to save for retirement. But to get your money into those accounts takes a lot of financial discipline.
Fintech apps can help you by automatically transferring money to your savings accounts. Some even round up charges and send the difference to your savings accounts.
But it is easy to get to the end of some block of time and find that you have not met your savings goals or saved any money at all. Once again, that emotion of failure creeps in and it can cause you to give up altogether.
Grit is what helps you remember that it is never too late to start saving. Grit reminds you that even though you have savings goals, it is not the amount that matters. You just need to save as much as you can.