by Starla Ross

Created on: February 04, 2011   Last Updated: March 22, 2012

A wise saying by Chinese philosopher Confucius says, "A journey of a thousand miles begins with a single step."  This is true with any goal, but especially true in financial planning.  If you don't take that first step in the right direction, you'll never get to where you want to go. 

Financial success can mean different things to different people, but for most middle-income families it means having savings for emergencies, no debt, a clean credit rating, and money to retire.

While the road to financial success may be filled with a few twists and turns (and maybe even a pothole or two), if you stay the course, you will be sure to reach your destination of financial success.

1.  Stop at rest areas.

In order to be successful at managing your finances, you need to know where you are at all times.  Set aside a regular time once a week to focus on your finances.  Balance your checkbook, pay any bills due, and evaluate any upcoming financial decisions. 

At least once a year, take the time to see where you are in the large roadmap of your finances.  Evaluate your net worth (your assets minus your liabilities), determine how much debt you have, and set financial goals.

2.  Keep on top of routine maintenance.

Make it a point to pay your bills on time.  Paying before or on the due date will ensure that you are not paying unneeded late fees.  Timely payments also keep your credit report in good standing, which is essential to a positive financial outlook.  In return, a positive credit rating also gives you options for credit if you should run into an emergency situation. 

Because many insurance companies now evaluate credit to determine insurance premiums, good credit will result in lower insurance prices for your home and vehicles. 

Many employers are also now checking credit standings for new employees, and good credit can make all the difference in getting the career of your choice.

3.  Map your route.

In order to reach your financial goals, you need to stay focused.  It's easy to get side-tracked in life and lose track of your goals when you're dealing with things like employers, children, and activities.  Be sure to set financial goals of where you would like to be in six months, one year, and five years.  If you write down your goals, you are more likely to keep them - and achieve them.

Stay free of debt as much as possible.  Pay cash (or use a debit card) for everyday expenses, and try to save debt only for items that are assets (such as your home) or goals that will help you earn more (such as education).

4.  Fuel up.

Overall, one of the oldest financial principles remains true, even in today's time - spend less than you earn.  If you apply this principle throughout your entire life, you're sure to come out ahead in retirement.  Start as early as you can, saving for the future.  Even if you think you can't afford it, contribute to your employer's 401K plan.  If you don't have a 401K plan through work, set up an automatic savings plan for Roth or professional IRAs.  An investment professional, or even your bank, can help you set up such a plan.  When you invest regularly and automatically, you're much more likely to save and save more.

The roadmap to financial success is simple.  Know where you're going.  Stop and map (or re-map) your route from time to time.  Stay the course.  With a little planning and a map to follow, you're sure to reach your destination:  financial success.

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