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The older I get — I’m 74 in a few days — the more I seem to think about my past, especially my parents. Both were high school dropouts, but they were able to provide for their family and lead successful lives.
Sure, there were ups and downs, such as when my father’s small business went bankrupt during the recession of the late 1950s. But my father changed course and ended up working for other people the rest of his career. When money became tight, my mother would take part-time jobs to fill the gaps. Her favorite was working as a switchboard operator, a job she learned during World War II.
Perhaps the greatest gift from my parents was a roadmap for “getting ahead.” The term “getting ahead” was my parents’ term for being financially successful. They didn’t necessarily mean becoming rich. Instead “getting ahead” to them meant earning enough to support yourself and dependents without substantial debt. Both of my parents were very cautious about debt. Each never had a credit card.
As a professional economist for almost 50 years — 43 of them teaching students — I’ve devoted much time to studying how to “get ahead.” Indeed, I’ve written several books about the topic. Since the start of a new year is often a period of making plans for the future, now might be an appropriate time to think about what it takes to “get ahead.”
The starting point is developing skills that will allow you to be successful. Again, let me stress, I’m not implying that success only means making tons of money and being able to purchase big homes, fancy cars and other material possessions. People define success individually. But, in the view of many, a core part of success is earning enough to be financially independent and able to afford the necessities of life.
Developing a person’s skills for earning income is easier said than done. Everyone has different skill levels. My wife has artistic skills, but I don’t. This is why I failed at my first occupational pursuit of becoming an architect. In undergraduate school, it took me three different majors before I found a skill I had a talent for, and one in which I could earn a living — in my case, economics.
How does a person develop their skills?
When I graduated from high school six decades ago, the common advice was that a college degree was necessary to “get ahead.” Today, this advice is changing. While I taught thousands of students who were eager to be in college and successfully did the work, I also knew many students who had little motivation for college and were wasting their time. They needed to develop their skills in a different way.
While a college degree is still a necessity for many occupations, the good news today is there are alternatives to a four-year college for developing skills that are financially marketable. Two-year colleges, which are highly rated in North Carolina, are one example. On-the-job training is another, and one that has experienced a recent revival.
Even after a person is earning enough to be self-supporting, there are additional important recommendations for “getting ahead” which fall under the category of money management.
One key issue is separating spending into needs and wants. Needs involve spending necessary to live, including categories such as food, shelter, health care, transportation, and utilities like water, fuel and electricity. Wants include spending on items that will make you happy, but that you don’t necessarily need to live.
There’s much flexibility in these definitions of spending. Shelter is a good example. A household with two adults and two children may want to buy a 4,000-square-foot home to be comfortable, but a 2,000-square-foot home would still allow them to function. The household may consider the 4,000-square-foot home a necessity. The question is whether the higher price, payments and debt of the larger home can be easily accommodated by their income. If not, the household may want to settle for the smaller home, at least temporarily.
This example raises the issue of debt in successful financial management for “getting ahead.” For most households, especially young households, using debt is necessary. Debt allows a household to effectively use expected future income to make purchases today. This tradeoff makes sense if the benefit from using future money today is higher than the benefit of using the future money later.
Taking on debt to buy a home is a good example of the proper use of borrowing. Consider again the four-person household who, with growing children, need the space and privacy of a home. The happiness from using future money for a home today is likely higher than any happiness from spending that same money in the future.
Even with this logic, there should be constraints on borrowing. Financial experts recommend the total of a household’s monthly debt payments should not exceed one-third of their monthly income. For many households, this means always asking themselves how much they really want something now if it means taking on more debt, versus waiting until they can afford to pay more of the purchase with cash.
The last aspect of “getting ahead” is to think about “staying ahead” in the future. This means saving and investing some money today to be used in the future, especially for retirement. Because this goal is just the opposite of borrowing, households often don’t begin saving in earnest until their income is higher and their borrowing has diminished. Still, establishing a modest savings and investing plan even while big borrowing is continuing is a good idea for developing the mindset of saving.
Thinking about “getting ahead” is a good objective for the new year. It may actually be more exciting than losing 10 pounds, which I tried to do in 2024. But, you decide.

Mike Walden is a William Neal Reynolds Distinguished Professor Emeritus at North Carolina State University.