15 Steps Financial Success Plan

The following 15-part series is a do-it-yourself step-by-step guide that will help you improve your finances, reduce your debt, and increase your income and savings. These steps start off with tips and ideas to help you cut your expenses. This will help you quickly improve your monthly cash flow and prepare you to tackle the subsequent steps that includes preparing for emergencies, improving your credit and paying off debt, and saving and investing. We will also leave you with a few more ideas to improve your finances even more and share a few pitfalls to avoid.


Photo via Wikimedia Commons.

Cut Expenses

We are going to start off with a few big wins (which may not be applicable to everyone) and then work our way toward smaller expense reduction ideas that almost everyone can take advantage of.

1. Pay Less for Your Insurance Coverage

First we are going to start off with one of the best ways to cut a big chunk out of your expenses quickly. Finding a lower cost alternative for your current insurance policies is one of the quickest way to save several hundreds (perhaps even a thousand or more) dollars per year. In this article, we will explore:

  • What insurance do you really need?
  • Are you over or under insured?
  • A walk through to help you do a price check on car insurance and home insurance.
  • Set up a reminder to price check every 1 to 2 years to save on costs.

Read: Pay Less for Your Insurance Coverage

2. Refinance Your Home Loan

If you are a homeowner, this is another good way to cut a sizable amount from your monthly mortgage payment and save a bunch of money that would otherwise go toward interest payments. In this article, we will explore:

  • When and how to refinance?
  • What to do with the extra money (pay off debt, build savings, etc.)?

Read: Refinance Your Home Loan

3. Cut Recurring Expenses to Save Over and Over Again

One of the most powerful methods is to cut recurring expenses. We covered two of the bigger expenses in the first two articles of this series. Are there any other recurring expenses that you could cut? Cable subscription, cell plan, gym membership, eating out, expensive hobbies, etc.

Read: Cut Recurring Expenses to Save Over and Over Again

4. Budgeting: When You Track It, You Get Better at It

Once you have your expenses under control, you can help your finances stay in shape by budgeting. In this article, we will explore Why a budget, spending plan, whatever you want to call it is important.

Read: Budgeting: When You Track It, You Get Better at It

Prepare for Emergencies

5. Save Up an Emergency Fund

Now that you saved a bunch of money by trimming your expenses, you should be seeing some “extra” money in your monthly budget. What should you do with it? Emergency fund is the foundation that stabilizes your finances even when you don’t realize it (real impact comes when you need, and have, emergency money).

Read: Save Up an Emergency Fund

Improve Your Credit and Pay Off Debt

6. Track and Improve Your Credit

It is important to have a good credit for financing big purchases and saving money on interest cost. In this article, we will explore:

  • How to get free credit reports and scores.
  • Pay for credit reporting.
  • How to dispute incorrect information on your credit report.

Read: Track and Improve Your Credit

7. Reduce Your Debt

Remember all the extra money you saved by following the suggestions in the first three article? Now you can attack your debts with a vengeance. There are  multiple methods, such as smallest balance first and highest interest rate first methods, but it doesn’t matter as long as you do it. We will also check out a few tools that can help you pay off your debt faster.

Read: Reduce Your Debt: Debt Snowball vs. Highest Interest Method

Save and Invest

8. Get a Better Bank

Although banks do not pay the high interest rates they used to, you can still find good banks that pay 8-10 times the national average! More importantly, a good bank can save you hundreds of dollars per year in bank fees. Choosing the right bank is an important foundation for your finances that allows you to worry less about your bank and spend more time on more important stuff.

Read: Find a Better Bank: Higher Interest and Less Fees

9. Invest Your Money

More than ever, your chance of achieving a comfortable retirement rests in your hands. You can no longer count on perks like pension plan and other company funded retirement benefits. Social Security looks like a failing system that you may out live. So what’s left? Investing can help you achieve your retirement goals. In this article, we will explore:

  • 401k, IRA, and non-retirement investing.
  • Finding the right broker.
  • Taking advantage of company match and tax break.

Read: Getting Started with Retirement Investing

10. Automate Your Investments and Savings

Once you have the basics set up, it’s time to build in some automatic discipline so that your nest egg can grow on its own. In this article, we will explore:

  • Start small, but start.
  • The math behind what you need to retire, how simple it is.
  • The importance of starting now.

Read: Automate Your Investments and Savings

More Ideas to Improve Your Finances

11. Automate Your Bill Payments

Bill payments is another aspect of your finance that is good to automate. By automating your bill payments, you can:

  • Avoid late fees.
  • Avoid interest charges.
  • Simplify your life by not having to track everything.

Read: Paying Your Bills Automatically

12. Cut Craps You Don’t Use

Keep it simple is the mantra to a happier life and better finances. If you can live your life with less stuff, you will be less inundated by the resulting clutter and save a lot of money in the process. If you are already living with a lot of “stuff”, you can make the change and make some money in the process.

  • Sell the crap you don’t use
  • It is a fast way to save up an emergency fund

Read: Cut Crap You Don’t Use and Sell Your Stuff

13. Earn More Money

You can only cut your costs back so much, at some point you need to earn more money. In this article, we will explore a few ways to make more money, such as:

  • Getting a raise.
  • Getting a new job.
  • Starting a side business.

Read: Earn More Money to Transform Your Finances.

14.  Important Annual Events

Once you’ve built up the foundation for your finances, there are things that you must do going forward to maintain what you have built and keep it going. In this article, we will explore:

  • Re-balancing your portfolio – will help you avoid disasters and keep portfolio growing
  • Tax planning, e.g., tax-loss harvesting
  • Reassessing your insurance coverage
  • Other annual events

Read: 20 Important Financial Tasks To Do Each Year.

Money Mistakes to Avoid

15. Avoid Big Fails

Lastly, we will touch on various pitfalls that you must avoid and how you can protect yourself from falling into these traps.

Read: 21 Money Mistakes and Problems to Avoid

Read More

17 thoughts on “15 Steps Financial Success Plan”

  1. Looking forward to the guide coming out. Sounds like a lot of good advice. We have recently paid off our house so I’m putting that money in an emergency fund every month. We don’t miss it since it was going out anyway and it sure is nice to see the account growing so quickly.

  2. As a professional writer / blogger I started wanting to cut debt and succeeded after a lot of hard work, but now with systems and technology in place it is really something that’s totally achievable. Online income sources and cutting debt can go hand-in-hand towards a much brighter future, even in a dark economy. Great advice, thank you.

  3. I still hold strong to the idea that most people need to pay down their credit card balances more consistently just prior to the end of their grace periods each month. By letting balances carry over from month-to-month (revolve) the interest not only makes these credit card companies richer but it compounds on the debt issue until it gets so out of hand that it can never be paid back in a life time. Better to attack it as it builds.

  4. The better way of not getting into a debt is to manage your expences correctly. We need to start learning about money and its influence probably at the age of 13 ( I am not kidding by the way). Coz this is the time when we take our baby steps into adult world. So we need to have a better understanding of major terms in a finance sphere : debt, credit, money, invest, spend , etc

  5. very nice list. Its true that if you start tracking what you spend, you can end up saving a lot of money instead of buying blindly

  6. I almost bought a $2 PDF on personal finance guide and tips but i paused for a minute and thought to myself “wait,…i can get free tips on my favorite blogs..”. There, i saved myself from spending unnecessary spending. Its just great to realize that we can get very helpful tips and advice from finance experts for FREE. You are one of the most respected contributor on the web that i have known. Thanks once again. More power to your career.

    • @Malcolm – “You are one of the most respected contributor on the web that i have known.”, thank you. my team and I really appreciate the compliment.

  7. People always focus on the ‘spending less’ portion of this equation online – but I can guarantee that none of them are actively looking for work if they have a job.

    Even if you’re happy where you are – always keep your ear to the ground. You might find something that pays better and you can use this as leverage to get a raise at your existing job if you don’t want to leave.

  8. This is a great list. I need to sell a lot of my stuff, and soon. I don’t even know how it all collected; it’s not like I went out and bought 90% of it. I hope that I can make some money! Do you have any garage sale tips? I’ve never had one before.

  9. I have learned from great personal finance advisers that it doesn’t matter how much you earn, but how much you keep is important.

    Very true as you said, we should cut our expensive as much as possible and stick to our budget, if we want to survive financially.

    Thanks for great tips.

  10. This is a really great, comprehensive list to get started. Working through this will set people on the right financial path.

  11. Good thoughts Pinyo. In India, many people mix life insurance with insurance-cum-investment plans and spend huge money. Instead considering term insurance plans is the best solution to save money. We can invest surplus in other investment opportunities and grow the money…. suresh… myinvestmentideas.com

  12. Good article. In step 4, you write about controlling your budget, maybe it is worth to use some money management system. I apply division, of my incomes, according to their destination. Defined part, I devote for everyday needs, next for investments, etc. Such systems are very helpful in improving finances.

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