I started striving for financial success about 15 years ago after clawing my way out of nearly $50K in credit card debt. And during that span of time, I’ve done many things right, and many things wrong. That said, I wanted share with you some of the most powerful, yet simple money rules I followed which helped me achieve a modest level of financial success.

First things first, let’s define financial success. For most people, financial success means achieving a desirable outcome for your money and finances. Some people see achieving their first million as financial success, while to others it can mean achieving financial security, consistently growing their net worth every year, or achieving financial independence.

Regardless of the definition you lean towards, these money rules will help you become financially successful much quicker. That said, let’s dive into the most important money rules you’ll want to know to achieve financial success as soon as possible:

SIMPLE MONEY RULES FOR FINANCIAL SUCCESS

1. Watch Your Money

If you’re serious about transforming your money situation and achieving financial success, the very first thing you must do is begin watching your money more closely. You’ll have to put your investigation skills to work and dig into where your money is going every single month.

Start by looking into your credit card charges. Make a list of every charge that is a necessity, like groceries, gas, subscriptions, etc…

Then, make a list of every bill you must pay every month, so you get a better sense of where all your money is going. Pay extra attention to all your miscellaneous one-off purchases as well.

By taking this first step, you’ll become aware, and very likely alarmed with your spending habits. The great news is that once you begin watching your money more closely, and making a list of your fixed monthly costs, then you can apply this next rule more readily.

2. Create a Budget

With your newly acquired financial data, you can easily create a budget for yourself. I recommended that you take all of the fixed costs that you discovered by watching your money more closely, and then add them to a spreadsheet.

Creating a budget can be as simple as adding two columns onto a spreadsheet. Name one column expenses, and the other amount. Then, grab all of the data from the lists you made from step 1, and fill in the blanks.

Once you’ve listed out all your fixed expenses, and the standard amounts for each, your next step should be to total all of those amounts at the bottom of the page. This total amount is your monthly expenses.

This figure is now your baseline budget; meaning you should ensure that you always have enough money to pay these costs every month.

Related: Scary Financial Statistics

3. Track Your Discretionary Income

Now that you have a budget for all of your monthly expenses, you should have some money left over. If you don’t, well then you may want to see if there are any of your monthly costs or subscriptions that aren’t leading you to a stronger financial position.

If you find some, consider cutting them or downgrading cheaper options. That said, once you have some discretionary income (meaning money that is left over to spend on whatever you’d like), now you can get strategic on where you want to deploy this chunk of money.

You can choose to spend this extra money on new clothes, new toys, or whatever your heart desires, so long as you don’t spend more than you have. However, if your goal is to improve your financial situation, then your best bet is to start tracking what you’re spending your discretionary money on.

I recommend putting a chalk board or dry erase board up on a wall that you’ll be forced to see daily. Then go about placing at the top your board your starting amount, i.e. your total amount of discretionary money.

Next, make it a habit to write down every single purchase amount (this will take discipline on your part) that you make throughout the month, just after you make it. Adjust your balance as you go. And at the end of the month, whatever is left over should be committed to financial success or wealth building.

4. Save More

Once you’ve created the system above for tracking your discretionary income, you should have extra money left over each month that you can now put into savings. Your best bet is to keep placing any extra money you have into a high yield savings account.

You can save your extra money at a bank as well, but you’ll earn more money on your money if you deposit your money into a high yield savings account.

Here are a few high yield savings accounts to consider:

• Capital One | 4.35% as of Dec 13
• American Express | 4.30% as of Dec 13
• Lending Club | 4.65% as of Dec 13
• Texas Capital Bank | 5.10% as of Dec 13
• Ever Bank | 5.15% as of Dec 13

As you start saving more money, aim to create for yourself six-month emergency fund. In other words, enough money to cover at least six months of your monthly expenses (i.e. bills, mortgages, rent, necessity expenses etc..).

5. Invest More

Once you’ve hit a savings milestone like the one mentioned above, your next best move for creating financial success will be to start putting your discretionary money into investments.

Now, it’s recommended that you check in with your financial advisor before you invest any of your hard earned money. And as a disclaimer, this is not investment advice. But, in my opinion, it doesn’t seem like a bad idea to start placing that extra money into an ETF or mutual fund that tracks the SP500.

Here are a few solid growth ETFs to consider. But of course, it’s wise to do your due diligence before investing in anything.

6. Earn More

Once you’ve got your budget under control, and a good system set up for automatic investing, the next rule you’ll want to follow finding more financial success is to become more valuable.

Why become more valuable? Because by doing so, you’ll be able to earn more. And the more you earn, assuming you keep your costs fixed, the more money you’ll have to invest.

Needless to say, the more you have to invest, the quicker you’ll be able to obtain financial security and build wealth for yourself.

So, learn more to earn more, so you can become more… financially successful.

7. Track Your Net Worth

Lastly, you’ll eventually want to begin tracking your net worth. The primary reason you’ll want to begin doing this is to measure your progress.

When you begin tracking your net worth, you can compete against yourself. You’ll be able to see the months and years that you did well, and you’ll also be able to see the months and years where you did poorly.

This information will give you the ability to see what’s working and not working for you (financially speaking) overtime. It will also give you a starting point to ask better questions about your finances.

And better questions will lead to intelligent actions, and intelligent actions will typically lead to better outcomes for you. But one of the most important reasons to track your net worth, is because experiencing progress feels good. And the more you see your net worth grow the more you’ll want to change your habits to continue or accelerate the trend.

Related: Build Your Net Worth

Final Thoughts

There you have it, 7 simple money rules you should start following today if financial success is what you seek.

Like Simon Sinek once stated, “Dream Big, Start Small, But Most of All, Start.” So, if you’re not following any of these rules, just take that first step to get your finances in order, and then move forward at your own pace.

Till your reach your aims,

STRIVE