A big part of financial freedom, is having your heart and mind free from worry about the what ifs of life.
Suze Orman.
Financial worries seem to be among the top sources of stress and anxiety among many adults.
This leaves many wondering if they could ever be financially stable and secure without fear for how bills will be paid and how to survive if there is not enough to spare.
Financial stability, a state not limited to wealth acquisition goes beyond the numbers that play out before you as you stare at a copy of your bank statement.
For as much as the figures are important, those figures should not limit you since they can change with some efforts in your part, and as such should not push us to the brinks to harm ourself and others.
This means that with the right mindset, you can set out to change your financial story and be financially stable.
Defining Financial Stability
Financial stability may mean different things to different people.
For one it may border on being debt free, having enough cash to spend and throw around with friends and family, for another, it may be having enough to take a vacation and go on a cruise ship or even having the freedom to spend money without fear of running out.
So basically it can be said that,
Financial stability is being able to meet basic needs of life with ease. It means you are not stressed over payment of bills and are at ease even in the face of situations that would have stressed others out.
So financial stability is not about having millions because so many people with millions in their account still find themselves in situations which require some intervention.
Is financial stability attainable?
Financial stability is attainable as long as you prioritize your goals in life and follow them in a realistic manner. Focusing on the key objective which is gaining financial stability is paramount.
How do I get financially stable?
Financial stability can be attained doing the following
Set life goals
Knowing what you in life and how bad you want it will help you. A mental picture of want you want can be put on paper and pasted in a corner of your room or study to constantly remind you of what you want and the possible routes to get there.
This should be done with a positive mindset that screams "nothing is impossible" and that financial stability can be achieved.
Take out the time to organize your finances
Create a budget that should be followed strictly on a monthly basis. The budget should outline how you intend to handle your spending for each month. This monthly outline will help strengthen your resolve to meet your goal and restrain you from over spending.
Catalogue your income
List out your various streams of income and how much you make at the end of each month, to give you a picture of what your total income looks like. You can now set out to budget effectively.
Tackle Your Debt the Right Way
In the same manner with which you make decisions based on their importance, that is meeting needs as against wants, sort out your debts and set out to handle those that have higher interest rates first.
Credit cards fall into this category, mortgages and student loans cary lower interest rates. This is to keep you focused on handling your debts one at a time.
Pay off all credit card debts to to reduce debt load.
A survey by Creditcards show that a large portion of adult population have personal debts of which 36% can be linked to credit card.
It is well known that credit cards come with high interest rates, and can be said to be revolving debts. Failure to pay up results in a slap of a predetermined interest rate on the balance thus adding to the old balance and increasing our financial burden.
Create automatic savings
Create automatic savings from your earnings by stashing away a percentage that will not be touched for a period of time. This will provide you with a pool of reserve that boosts your confidence in your ability to achieve financial stability. Then at the end of the month , you'll already have saved up some extra cash for emergencies.
Create a pension fund or 401k retirement plan to use when you retire. The advantage of this plan is that the monthly contributions yields interest which add to your savings
Invest in you and for you
Invest in yourself and take classes or courses that will enable you to earn more. Free courses on self development abound online.
Search out these academies and take those courses that you need while some of these courses are not free, a little cash investment on yourself is worthwhile.
You could also invest in profitable ventures to reap profits. Some ventures come with compound interest and this can help build your finances faster and lead to financial stability
Keep your debt under control
Once you have been able to put your bigger debts under control, and you're tackling the smaller debts, avoid taking on more debt however enticing it may look. Instead use the following advice:
1. Replace payment of goods an services using credit card with cash: Using physical cash for purchases keeps your spending within the limits of the available cash.
2. Make purchases based on the urgency of the need: When you're faced with the option of making a big purchase, check again to see if you actually need that the product at that moment or whether it can wait until much later.
3. If you must take out a loan, pick one with lowest interest rate possible. This is made easier if you have higher credit score because lenders will generally offer a lower interest to borrowers with higher credit score.
In conclusion, a complete change in your lifestyle and the way you think about money is another way to achieve financial freedom.
Try to live a minimalist lifestyle and do away with extravagant lifestyle. This will eliminate the excess expenditure of cash and build up your savings.
Related posts
Check our post on how to save more money for details.
How to live simply and still achieve more
Well described
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