Small Financial Milestones Worth Celebrating (DON'T IGNORE THESE)

it's easy to ignore Financial Milestones because no matter how much success you have it will always feel like you could be doing better I'll wait until I'm debt free or I'll wait until I'm a millionaire to celebrate my progress setting the bar high for yourself does have its benefits but the reality is that finding success with money is a result of making many small achievements over time you must take note of these and celebrate the small successes along the way this helps you keep track of your progress take a look at these Financial Milestones so you can identify them and be proud of yourself when you achieve them you might have already achieved these Financial Milestones without even realizing it my name is Chris and I help teach people about money personal finance and investing if you want to become financially free and not have to worry about money make sure to subscribe to the channel and like the video if you find it helpful fully funding an emergency fund saving up enough money to cover an emergency is a huge accomplishment having cash savings isn't the most exciting achievement but it's critically important because it's not a matter of if an emergency expense will arise it's a matter of when having money saved up means you can handle these issues when they present themselves without causing a catastrophic domino effect failing to have a sufficient emergency fund is actually one of the biggest mistakes people make anyone who plans on making great financial progress must address this reaching the Milestone of three to six months of expenses in cash and a savings account is an excellent Milestone even if it doesn't seem like it earning passive income beginning to earn passive income from Investments means a new door presenting endless opportunities is open for you your money is now working for you meaning you're generating income in other ways than just working theoretically you're now earning money while you sleep it doesn't have to be a lot at first and it usually starts out laughably small at the beginning but if you understand how compound interest and investing works you'll know how powerful the small amount of interest can be to give you an idea of the power of compound interest a penny that doubles every day for 30 days grows to an incredible 5.4 million dollars is you begin to see the money working for you and growing on its own you're going to be thrilled with the process and you're going to want to keep adding to it so it'll increase in size even faster buying a home the primary benefit of becoming a homeowner is that your housing costs are now relatively fixed assuming the overall cost of owning a home is comparable to the cost of renting this is an amazing Milestone home ownership certainly comes with its downsides and it can be expensive so it's not a great fit for everyone but when you're no longer a renter you no longer have to worry about rent increases year after year the cost of home ownership are going to rise each year but the price you paid for the home is never going to change divide the cost of home ownership into two general categories one half is your mortgage payment which will never change with a fixed rate the other half consists of variable expenses like taxes Insurance utilities maintenance and so on in short homeownership is like a half fixed expense to this point we haven't even considered the icing on the cake which includes the fact that your mortgage balance is reduced each month and the home is likely to increase in value paying cash for a car paying cash for a quality car is a huge milestone in more ways than one first you've resisted The Temptations of buying a brand new car or financing one beyond what you can afford which is more than can be said for most second you now own the car outright so you have zero monthly car payment ultimately freeing up your budget you'll still need to save for its eventual replacement but it will be much less costly than the alternative because you won't be throwing thousands away on depreciation and interest the idea of buying a brand new car is glorified to say the least when you consider most buyers are up to their eyeballs and car payments owning a new car can be tied to reduced maintenance costs but the added cost of financing depreciation taxes and insurance usually add up to much more than one would spend maintaining a reliable used vehicle having a good credit score upping your credit score and reaching a respectable number is a huge milestone that's pretty easy and inexpensive to do you might be thinking why would I care about my credit that just means I'll be able to borrow more money well that's true what having a good score really does for you is gives you more opportunities suddenly you're a better borrower in the bank size and you have access to lower cost debt this means you have more opportunities to utilize so-called good debt that will help you become wealthy it's not a prerequisite to financial well-being but it's another tool in the shed you now have a better chance of buying a home if you haven't already and your payment and interest rate will be more affordable you'll have an easier time financing investment property if that's something you're considering you might choose to borrow money for things you might otherwise pay cash for and invest the lump sum instead you can do this easily and with little to no cost to you primarily by making your payments on time earning more than you're spending while this might sound like common sense to spend less than you earn the reality is that many people can't seem to keep their level of spending below what they're earning it sounds ridiculous but they succumb to easy credit instant gratification in buying things they don't even need and before they know it they're in a bind being able to limit your expenses to less than you bring in more often than not means you can resist the urge to buy every shiny object before your eyes this alone is excellent because you have control of the situations and aren't easily persuaded it also means you're able to find ways to save money and cut out waste in your budget which again is easier said than done this is a simple Milestone but it means your future is looking bright diversifying income even if most of your income comes from your main job or nine to five like most people you're probably going to receive more satisfaction when you earn your first dollar from a diversified income stream starting a side hustle and earning money even if it's just a little bit is a huge milestone not only are you spreading your eggs out instead of relying entirely on your boss to sign your paycheck it means you're exploring other avenues of making money even if these small side businesses don't rake in a huge amount of money their potential is usually much higher than your nine to five depending on your side business it could have the ability to scale meaning the earnings potential is basically unlimited compare that to your main job and you'll understand how beginning to diversify your income is a huge milestone achieving a ten thousand dollar net worth there's no doubt that celebrating a million dollar net worth is more exciting than reaching a ten thousand dollar net worth but that's going to take a little while for most people in most cases it will take decades regardless achieving a net worth of ten thousand dollars is a big milestone because it demonstrates that you're devoting effort to your finances you're not going to be worth ten thousand dollars or more by accident so this is a big accomplishment worth noting those who borrow money for things with no collateral can easily find themselves far into the red when it comes to their net worth student loans credit card debt personal loans and medical debt technically have no underlying value so it's a direct hit to your net worth reaching ten thousand dollars shows that you're beginning to round the corner and things should Accelerate from here it's easy to ignore small accomplishments because they don't always seem like a big deal at the time but you can't wait until you're a multi-millionaire to celebrate your progress achieving big accomplishments is just a series of smaller steps and accomplishments besides you'll find yourself moving the goal post to the point where you'll never reach them if you don't make it a habit to track them beforehand in other words even once you become a multi-millionaire you probably won't even see it as a big deal anymore and you won't want to celebrate until you have say 5 million dollars keep track of these Milestones so you know when you achieve them if you ignore Financial Milestones entirely it will seem like you never make any real Financial progress and this can be a problem going forward

Channel: Chris Invests

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Length: 8min 37sec (517 seconds)

Published: Sun Feb 26 2023