Obtaining Personal Security: 6 Elements to Lifelong Financial Stability
Lifelong financial security is not some faraway ideal, it is a reachable goal for all people. Financial stability does take a lot of work and careful strategies to execute. However, anyone can take the proper investments in their life to secure a solid financial path that can last their entire lifetime. Here are 6 elements to have for lifelong financial stability.
1. Control Spending
Probably one of the most basic financial tips anyone could give a person is to control spending. This includes knowing exactly what is being paid for per month or per quarter and tracking that spending. Realizing this can help a person know what aspects of their lifestyle are consuming the most from their budget. With this knowledge, a person can sit down and then cap their spending on certain habits and utilities (lower cable bill, lower phone bill, don’t spend so much on entertainment, etc.).
2. Strategies On Debt
Debt may seem like a monumental expense, but finding specific strategies for each line of debt can be really helpful to keep a person’s budget healthy. Credit card debt, for example, can be controlled by paying off the credit card each month. This helps a person only pay for what they purchase on their credit card. Lines of credit with a large balance are another issue. There are two main strategies with credit with large balances: pay off the lines of credit with the smallest balances or pay of the lines of credit with the largest APRs. Other lines of debt, like education loans or a mortgage, can only be paid off over time. Budgeting these payments as priorities alongside housing, transportation, food, and utilities can help guarantee that those lines of credit are always paid until they are completely paid off.
3. Begin Saving
It is never too late to save. Saving strategies will be the main road toward becoming financially secure throughout one’s life. This will be dependent on how much net profit the person has per week, month, or quarter. If there is an income issue, then major considerations need to be made that could be life-changing (finding a new job, getting a part-time job, radically changing one’s housing or lifestyle costs). If income is not an issue, then taking a percentage of net profits and putting that money into savings accounts or an IRA can help build up the person’s nest-egg.
4. Have Insurance
Insurance may be a cost, but not having insurance can wipe out a person’s assets if the worst case scenario happens. Having the major forms of insurance (life, auto, home or apartment, health, and disability) can take care of a person and their family if an accident occurs.
5. Consider Investing
Unlike savings, investing is where the person can put their money into a financial account, like a stock. This strategy can yield immense potential for a large return. However, investing is a careful science with a lot of unknowns. Many people can lose money if they are not careful, and putting large amounts of money, which could have been used for savings, into an investment can be very risky. Working with an investor to help strategize what investments to consider will be helpful. Overall, do not be shy about investing, but remain cautious.
6. Audit Yourself
In this day and age, identity theft is a popular crime that is costing people thousands of dollars of their own money. Securing Social Security numbers, shredding or securely filing banking and financial information, and having a secure computer while being computer literate can protect one’s identity and accounts. In addition, consistently checking on one’s financial health, whether its an annual credit report or crunching the numbers to calculate one’s net profit, will ground a person in their financial reality.
Becoming financially independent is not a daydream, it can be a reality. With good planning and careful execution, anyone can save their money and invest wisely to have personal security with their finances over the long term.
Information Credit to Dyck Insurance, Edmonton Insurance Quotes
Category: Financial Planning
