Achieving financial success is a goal that most of us aspire to — but it’s not something everyone will achieve. Unfortunately, many things could stand in the way, as a recent Empower study showed. In particular, Americans identified four primary obstacles preventing them from achieving their money goals.
24/7 Wall Street Key Points:
- More than 1/3 of Americans describe the economy as an obstacle to financial success.
- Income instability is a problem for around 30% of people.
- A failure to set clear financial goals, or a delayed start in working toward them, are also leading obstacles to financial success.
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The big question is, what are those obstacles and are they things that it’s possible to overcome? Here’s a list of them, along with some tips on succeeding despite the challenge.
1. The economy
More than a third — 35% — of survey respondents told Empower that the economy is an obstacle to achieving financial success. This isn’t surprising as inflation surges in the post-pandemic era have led to record levels of credit card debt and a general feeling that getting by is a challenge.
Unfortunately, there’s nothing that anyone can personally do to impact economic conditions. That’s why it’s so important to build a financial life that enables you to thrive no matter what the broader economy is doing. You can do this by:
- Investing regularly so your money is working for you every day
- Building a strong professional network and developing specialized skills so you have many employment options
- Saving up an emergency fund with three to six months of living expenses so a financial setback doesn’t lead to disaster
If you do these things regularly, you can not just survive but thrive even during challenging economic times.
2. Income instability
Income instability is another major issue, cited by 30% of Americans as an obstacle to financial success. The best way to overcome this is to build multiple income streams.
Obviously, you’ll have money coming in from your primary job. But you may also want to consider investing in income-producing assets such as dividend stocks or REITs. You can also work on building a side business that provides additional income in case something happens to your regular paychecks.
If you’re still worried about income stability, an emergency fund can help you here as well — as can keeping your fixed expenses affordable. If you don’t have big spending commitments and you have a good amount of emergency savings, an interruption to your income won’t prevent you from achieving financial success.
3. Not setting clear financial goals
A failure to set financial goals is listed as an obstacle by 28% of people, and this also makes good sense. If you don’t have goals, it will be hard to accomplish big, important things with your money such as saving for large purchases or saving for retirement.
You should aim to have a few short-term goals, some medium-term goals, and a few long-term goals. Be as specific as possible, identifying:
- What you’re working towards
- How much money to save for it
- What your timeline is
For example, if you’re saving for a home down payment, specify how much you need, when you plan to buy, and how much to invest each month. Once you’ve set your goals, track your progress to make sure you’re not falling behind — and to help you stay motivated as you get closer to success.
4. Procrastinating
Finally, 26% of Americans say procrastinating is a problem — specifically, procrastinating on making financial decisions or creating a plan.
The best way to overcome this obstacle is to just start today. It doesn’t have to be hard to create your goals or to begin saving some of your income. You can open a brokerage account in a few minutes, and plenty of online calculators make setting savings objectives quick and effortless.
Once you get started with your plans, automate the process to make inertia work for you. If you want to save and invest, set it up so that happens automatically and it’s more work not to make it happen.
The good news is that all of these obstacles can be overcome. It’s up to you to decide to implement these solutions, but once you do, you’ll be well on your way to achieving the financial success you deserve.
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