Financial success is something many people strive or wish for, but can look entirely different in terms of what it actually means to have financial success. For example, a person with a “go get it” attitude versus a person with a “comfortable” financial attitude. To one, a title and superior income might be more important than consistent and predictable income. A comfortable financial attitude likes frugalness and aspires to many of the same lifestyles, but just at a different spending or saving level. My point is that financial success can have a different meaning or look, depending on one’s goals. However, there are 3 fundamental considerations that are mutually important and the same in either case. Let’s dive deeper into these three power tips that can help achieve financial success.

At any income level, understanding and staying within your budget is critically important and the first step to achieving financial success. For those that have a fixed income, it’s predictable and clear to manage expenses. Entrepreneurs, the self-employed, contractors or individuals that are part of the big economy, might have income that can be sporadic. The most important takeaway, from a budgeting aspect, is to live within your means. Your budget should take into account your needs in terms of necessities first, and luxuries last. The recent Planning & Progress Study commissioned by NorthWestern Mutual showed some interest details, specifically, people splurge and accumulate debt. One specific finding was that “Americans are twice as likely to have accumulated $5,000-$25,000 in debt (33%) rather than personal savings (17%)”.

In regards to this first financial tip, I am not saying to avoid luxuries, everyone needs a little indulgence. Instead, could you be more reasonable? Could you hard line a dollar amount or a percentage of your monthly budget and not exceed it? This is the toughest mental choice for many to make because of the feeling we get when we buy something that makes us feel good or makes us look good. Could you, instead, make a conscious choice to prioritize your luxury or discretionary options? Rate them or assign them a priority value and devise a method to determine which ones make it into the allocation of your discretionary budget. Have fun with it and say bon voyage to the ones that didn’t make it!

The second financial tip is probably the most scary to some, but tax planning is an important aspect of your financial success. First of all, everyone has access to the same tax strategies that wealthy people use. Don’t be afraid of the IRS, you just need to educate yourself or work with a qualified tax professional. Here are a few things to educate yourself on. What are the differences between deductions and credits and when or how do they apply? The IRS has planning tools on their website to help with tax planning. One such tool is the Tax Withholding Calculator, which can help calculate how much you may owe. This tool can help you to determine if you might be underpaying throughout the year and help avoid having to owe more than you thought in the end. You may be overpaying on your taxes by a considerable amount. A person can get a refund because of credits it allows to qualifying filers or to those who have overpaid. When you overpay your taxes for a given year, you will get a refund. Couldn’t that money have been more wisely used in the year you earned it? Statistically, the amount refunded has been going down, and for filing for the 2018 year the average return was $2,828.

Here are some actionable steps to take with regards to tax planning. Know your tax bracket and if it could potentially change. While many individuals have predictable incomes, others might have fluctuations. If you have self-employed income, set aside the percentage that would be due to meet your tax obligation. Also, if you are self-employed and have an employer that withholds taxes, you could have your employer withhold more to help satisfy what you may owe.

The third tip for financial success has to do with saving and investing. There is a difference between these two financial concepts, but they work great together when executed properly. Saving and investing work alongside with budgeting and your tax planning strategies. Let’s look at how we tie those two together.

First, saving should take a considerable amount of your budget. Moreso, than your discretionary budget, what you spend on things that aren’t necessities. Saving can be fun, particularly when it is assigned to something meaningful. First and foremost, you should plan to save enough money to establish an emergency fund. The standard emergency amount saved is 6 months of your income. This won’t happen overnight, but the speed of how soon you can accomplish this is directly tied to what discretionary and luxuries you give up. Saving money can be for expensive ticket items as well, such as a vacation, college education or buying a home. These big ticket items should be more meaningful as they can foster loving and memorable moments, versus the momentary quick fix to an impulse.

Investing involves risk and should be looked at differently than how you save. First, let’s look at how they fit together. Knowing that there is risk involved, the investing strategy should consider some fundamental elements. The first consideration is the time horizon for when the money is needed. This time horizon then allows you to assess the level of risk you should take in how the money is invested. With shorter time horizons, less risk should be taken with this money and one should look to more conservative investments. As the time horizon lengthens, the level of risk you take can increase depending on your risk tolerance. The time horizon allows for the money invested to fluctuate with the market conditions. As you get closer to your expected goal or use, the risk should then begin to decrease again. Furthermore, there are a plethora of other considerations when evaluating your investment options. Investment considerations, such as the liquidity aspect, the valuation (is it low or high), pricing costs associated to purchase and tax implications to name a few.

Regardless of your financial status, income level or financial knowledge, these 3 tips lay the foundation that can help create a disciplined approach to accomplish your financial success.