5 Steps to Financial Success

Although the road to financial success is different for everyone, there are a few key stops along the way that can make your journey an easier one. If you’re just starting out, then these steps will point you in the right direction. If you’re off-track, then use these steps to find your way again.

Step 1: Watch Your Cash Flow

“Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back and have money to invest. You can’t win until you do this.”

–Dave Ramsey

In my wallet I carry a hand-written note with financial advice from my father. He explains that a person who earns $5 and only spends $4 will be happier than someone who earns $10 but spends $11.

He’s teaching an age-old principle that we have all been exposed to at one time or another: spend less than you earn. Yet, it seems that people struggle to live by this simple concept, and end up spending more than they earn. The first step to financial success is to master yourself, and learn to spend less than you earn.

Step 2: Know Your Net Worth

“It is not the man who has too little, but the man who craves more, that is poor.”


To understand your financial position, you need to know how much wealth you have, which means you need to calculate your net worth. To do that, you need to figure the difference between your assets and liabilities:

Assets – Liabilities = Net Worth

Assets include anything that you own that has financial value, such as cash, vehicles, property, or your Michael Jordan Rookie Card. Liabilities include any debts that you have, such as auto loans, mortgages, or credit card balances.

  • Once you have figured your net worth, what should you do with that information? Here’s a few things that you can learn from it:
    Put debt into perspective by comparing it with your assets
  • Recognize if you have borrowed too much and need to adjust your lifestyle
  • Compare short-term and long-term liabilities
  • By comparing your net worth month-to-month, you can track your financial progress. If you make a mortgage payment each month, for example, then your net worth will most likely increase as you pay down your liabilities (barring any additional debt).

Step 3: Set Financial Goals

“The only way you will ever permanently take control of your financial life is to dig deep and fix the root problem.”

–Suze Orman

Financial health, like so many other things, requires both a long-term plan and short-term goals in order to succeed. Once you have your long term plan, develop short-term goals to help you get there. Here’s a few examples. Feel free to use any of these that help you out.

  • Long-term Plan: Become debt free
    – Short-term goal 1: Save money on lunches and only eat out twice the whole month
    – Short-term goal 2: Pay down extra on my loan this week
    – Short-term goal 3: Pay off the Visa balance by Thanksgiving
  • Long-term Plan: Save for a down payment
    – Short-term goal 1: Save $50 off-the-top of each paycheck
    – Short-term goal 2: Ask for extra hours at work once-a-week

Step 4: Always Save

“A penny saved is a penny earned.”

–Benjamin Franklin

You don’t need an enormous stack of cash in the bank to have financial success. In fact, the amount of money you have saved is less important than your saving habits.

Success comes when you have an enduring habit of saving off-the-top. If you get to the point where saving comes to you automatically, then you’ll naturally begin to see your balances increase, along with your financial security.

This step is an impossible one to accomplish if you still haven’t mastered Step 1 (spend less than you earn). In fact, both of these steps hinge on your self-mastery, and you’ll succeed or fail depending on how much grit you can muster to see them through.

To begin saving with Deseret First, Click Here to apply and open a Savings Account.

Step 5: Understand Your Credit Report

“Stay on top of your finances. Don’t leave that up to others.”

–Leif Garrett

If you’re really serious about financial success, then you need to own your credit history. Start off by getting a copy of your credit report and going through it line-by-line. You can get a copy for free at AnnualCreditReport.com.

Owning your credit history means that you make a deliberate effort to improve your credit score, and take control of any bad decisions you may have made in the past.

If this step is a difficult one for you, then take the time to read up on credit reports, what goes into them, and what you should do to have the best possible score.


Following these five steps will help you stay on track, so that the journey to financial success is as easy as possible. Following them will pay huge dividends in the long run.