The First Step to Financial Success is Honesty

It seems that honesty, and the truth, are becoming less and less a part of our society.

I’m sick of there being a money taboo. Everyone thinks they can get away with being in debt for items they don’t need because we aren’t talking openly about our financial situations. If you can’t afford something, that’s perfectly okay. Being able to tell yourself no is much more impressive to me than going into debt for something.

I could go out right now and qualify for a loan on a BMW. On the way back home in my new ride, I could stop and spend a couple thousand on clothes and put it on a credit card. After I decked myself out in new clothes, I could drive to the best barber in the state and get a $100 haircut.

The problem is, I would be in debt. I wouldn’t actually own the car, clothes, or even the haircut until I came up with the cash to pay the loan and credit card off. I’d be lying to the world because I’d be presenting myself as wealthier than I actually am.

So many people are still trapped in the consumer hamster wheel and feel like they need the latest and greatest items to fit in with their peers (or even worse, people they don’t know). It’s time to make honesty and humbleness the attractive characteristics to have.

Be honest with yourself about your current situation

Financial success begins when you know where you stand. You can’t know what needs to be done until you know how much money you owe, how much you make and how much you have saved. Start with using an app like Personal Capital to see what your net worth is and then get on a budget to start improving your situation.

If you’ve got any debt that isn’t a mortgage, that should be your first focus. Nothing slows down wealth accumulation as fast as debt. You can try saving and investing, but until you get your debt paid off, it will be like swimming with weights tied around your ankles.

If you’re not a millionaire, don’t spend your money like you are. If you’re not earning a six-figure salary, it’s probably safe to say you shouldn’t be spending $30,000 on a vehicle. Your car doesn’t need any custom cosmetic work done to it in order to get you where you need to go. A good engine and a set of good tires is all you need.

Be honest with yourself about who you are

If you haven’t done so already, take some time to get alone with your thoughts and think about who you are. Don’t think about what other people think you are, just you. What actually makes you happy when you spend money? Better yet, what purchases give you a sense of meaning?

When I came to the realization that most of the items I bought were to impress other people, it was life-changing. I used to fall into trends and try to fit in, but that’s a never-ending path. Trends change and the retail giants are always updating their inventory to stay current and keep their hands in your pockets.

Being yourself will save you a lot of money and you actually become more interesting and attractive. People will say “Hey, that person’s different. I’d like to know what they’re doing and why they aren’t like everyone else.”

It’s nice to be accepted, but why do we have to buy anything to be more acceptable? As long as there isn’t something really strange about the way you look, I’m not going to pay attention to what you’re wearing. I’d rather have a meaningful conversation.

Be honest with yourself about your goals

If you don’t have any goals, it’s time to come up with some. Goals give you something to aim at and when you have something you’re aiming for, you’re much more likely to make progress.

It’s good to have an end goal, but it’s important to break that end goal down into smaller chunks so you don’t get overwhelmed. My goal with money is to hit a million dollar net worth and become financially independent. That’s going to take several years, so I made a financial belt ranking system to give me smaller net worth goals to achieve.

We just hit our financial orange belt ($100k net worth), and it felt like a big accomplishment. I’m more motivated now than ever to continue earning and saving money.

Little wins in life have a bigger impact than you might think. Just start making tiny goals for yourself each week, come back to me in 10 years and see how much you’ve accomplished. You probably won’t recognize your old self!

Stop telling yourself “I’ll never be able to get there” or things like that. Once you’re honest with where you’re currently at, who you are, and where you want to be, you just have to start improving one thing at a time until you’ve achieved your goal.  

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