I’ve had the opportunity to work with many young small business leaders who are professional couples. It is rewarding when you know they are on a good path in their lives. There are laws of investing and life principles for family financial planning that are tried and true. They pay off when you learn what they are and adjust your lifestyle choices to using them. The younger you are when you start implementing them the better off you’ll be.

Making attempts to do what you think you know or going against them usually results in lost efforts and/or loss of money and time. I’ve seen hundreds of people and businesses over the years who try to swim upstream when all they need to do is learn the laws and principles then go along with them in the current of life. You’ll have more fun and money when you do.

What Does Success Mean To You?

To achieve financial success, you have to decide what that means to you. In your twenties, thirties and forties, these are the “earning years” and the “desire years” where you are making money and want all of what life has to offer for your family. At these stages, certain principles will help you when you master them and find satisfaction in life by living through them. Read this article, What Does Dynamic Living Mean to You? to learn what makes people the happiest.

Long term financial success requires you to put money into different buckets and keep filling them up as you add various ones to represent your lifestyle choices. The more disciplined you are and the quicker you are at filling these buckets up; the better life can be.

Whether you fill them up or you don’t, you live the life you’ve chosen. It’s all about the choices and decisions you make every day, every week and every month of where you spend your money and how you save it.

Laws of Debt & Leveraging

Debt is ok in business. Leveraging the business assets to access more capital is often needed to grow or improve market conditions or whatever the objectives are. For a non-business person and family, debt is normally a cardinal sin. It’s typically a non-negotiable thing to do. Debt is not an asset; it’s always in the liability column of your personal financial balance sheet. And that’s not where you want to be with your money and assets.

After WW2, loaning money to stimulate the economy took on a different turn where credit cards became the norm. Today, many people use them to manage life’s bills and desires. It is not a good leveraging tool under nearly all conditions. They have been a major contributor to making terrible money managers in families and businesses. Very few people care to wait to purchase anything in today’s society. This lack of being satisfied with delayed gratification affects many areas of our lives and creates a dependency on the money you don’t have for the things you want today. That circle has a short life cycle and one fraught with despair and uncertainty.

Living within your means and planning for a successful financial future requires you to be disciplined now and practice delayed gratification.

Never carry forward monthly credit card debt. Using it to pay bills and paying it off monthly to earn rewards, yes, that is perfect. It is certainly a “tool” that makes sense when used like that. But to have liability in a credit card and paying interest, or even small or zero amounts of interest, there isn’t any reason at this point in your lives to do this. It is also a recipe that easily creates bad life habits. You make enough money to live comfortably without using them to carry debt.

Of Course, I Want the Nicest Car and Home!

A goal is to have zero debt if you want to be financially strong. Now, car debt is another subject and one where debt can be used, but even that should be a “calculated investment” of your money, not an emotional decision. Example: Can a $21k car do the same functions as a $35k car? Being in debt for depreciating assets isn’t considered a wise investment based on the average portfolio.

A home debt is understandable. This in part is because of the level of income normally isn’t substantial enough. Saving enough to pay cash for a home isn’t realistic for many young couples. The decision to make the purchase has to be realistic. Consider it an investment for the short term vs. the long term because most people move every seven years. Investing mindsets are different than emotional buyers. Buying the right home and with an investor’s mindset can help you to build equity over a period of 5 to 10 to 20 years.

Material Things Eat Cash

If there is a “material” item you want, then save the money to buy it. Material things can eat up a lot of cash, and they are normally depreciating items or ones that won’t make you money. In many cases they only create short term satisfaction. Give a lot of thought before you make the purchase to determine if it really fits into your financial plans.

Create a plan, then work the plan. Have you ever heard that before?