People work day in and out to pay their monthly bills and save up for their wants. Sometimes, the time you spend on working seems not enough to cover all your expenses, pay your personal loans, much more buy the things you aspire for you or your family.
That is why many would dream about reaching a status where they need not worry about making ends meet while saving for their future—to be financially stable.
The truth is, reaching a financially stable life may not be a walk-in-the-park, but it is definitely doable. It may take years to step into that status, but it is not something impossible.
But how do we attain financial stability? First, we have to define what this is about. Financial stability is a condition where one’s finances are well taken care of. You do not worry about where to get money to pay bills because you have sufficient funds, enough savings for your short-term and long-term goals, and have set aside a fund for retirement and emergencies.
To jump-start your financial stability goal, here are 12 simple ways you can do to finally attain that financial stability goal.
Focus on your situation
To attain financial stability status, the first thing one has got to do is to focus on their personal finances. People these days tend to relate their lives from others; it is vital to set aside the culture of comparing what we have from that of others. Some may be living their dreams traveling the world, and some are just starting to save up for their dream house. Remember, everyone’s lifestyle is different from others. We have different timetables, and it is up to us to know our own pace. It is best to zero into your own finances, take it personally, and never worry about other’s situations.
Invest in your self
Before putting all your effort into investing money on stocks, put yourself as a top priority before anything else. Invest in yourself through continuous learning. You don’t only need your college degree, but as we go on in a competitive world, people need to upgrade their skills to adapt. Apply for short online classes, read more books, or earn another degree if you want to.
Aside from education, it is equally important to invest your time and effort in maintaining a healthy body. Have a healthy lifestyle, exercise, limit stress, and get good sleep. A healthy lifestyle also means that you may explore more opportunities that come your way. Though this may not literally direct you to have that financially stable lifestyle, a healthy person can avoid serious medical illnesses that may get a large chunk of your savings.
Do what you love
To be able to earn more, you have to look for work opportunities that offer a steady and fixed income. But keep in mind that you also have to enjoy what you do. Find a job that you love so you will be more inspired to work more and eventually earn more. If you are tied to a job you do not wholeheartedly enjoy but pays the bill, consider doing part-time work on the side which you enjoy the most. If you are into baking, why not try selling cookies online for that extra income? You may also want to do freelance work. There is a long list of options you can try, and with this simple step, you can branch out to full-time work in the future.
Come up with a budget
With goal comes planning. To start with planning, coming up with a budget is a must, which serves as your tool in tracking what you spend and what you save. With budgeting, you can see where your money is going. Start with coming up with a monthly budget for your bills—mortgage, electricity and water bills, internet connection, insurance, and many others. The rest should go to your savings.
Savings overspending
After determining how much money you can spend and save through budgeting, it is now time to reconsider the things you have been spending over time. Have you been shedding bucks in unnecessary items? Or you might have been paying subscriptions you no longer need? The strategy is to live below your means.
Set aside funds for emergency
An emergency fund should come first before retirement money and paying your debts. This fund is your protection for the future. You may suddenly lose your fixed-job and undergo emergency surgery, sudden car repair, or roofing renovation. This fund shall help you go through these sudden challenges without having to spend your money savings allotted for other goals.
Some people prioritize putting funds for their retirement that when the time comes that they need money for an emergency, they withdraw their funds, leaving them with no choice but to pay penalties from withdrawals.
Clear debts
One will have a hard time attaining financial stability when he is flooded with debt. Pay the remaining balance of your credit cards and try using cash instead so you will not go overboard in spending.
Better if you pay your loans sooner to save more money in paying higher interest rates too. For mortgages, it is advisable to pay all debts first, save money for emergency and retirement, and lastly, focus on mortgages.
Invest for Retirement
Not many young people see the opportunity to invest in retirement plans early.
The key to financial stability is to plan for the days when you are no longer working for a salary. When one reaches his retirement year and may only want to travel the world or start a business, a good retirement plan shall make these goals a reality. It is better to start younger than later because money investments grow through time. Investments may sound overwhelming for some, but they can start simply with index funds or in exchange-traded funds (ETFs).
Live life and have fun
Saving money for the future is not easy. You have to make a few sacrifices and maintain a disciplined lifestyle to reach your financial goals and avoid bankruptcy. However, do not forget to take the time to enjoy your hard-earned money by treating yourself every once in a while. It can be a weekly massage, a solo trip every six months, or a new pair of shoes you have been eyeing in the department store. It is healthy to treat yourself for good work while being responsible for your future.
Based on Materials from SmartAsset.com
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