6 Steps to Become Financially Stable This Year and Beyond

The more control you have over your money, the more stability and peace you’ll find with your finances.

What does it mean to be financially stable?

A question you’ve probably asked yourself before or are even contemplating about right now.

But because personal finances are very unique to you, how you view financial stability may vary compared to the next person.

However, there are some common grounds to the definition and how you can get there.

Below I wanted to explore some simple steps that can help guide you to some financial security. What is Financial Stability?

When you have reached a state of financial stability, you are confident and completely stress-free when it comes to money. You are not worried about having the funds to pay your bills, you are saving money each month, and you are also debt-free.

In the simplest way possible, being financially stable means you are spending less than you earn (or living below your means) .

You are able to pay for the basics of living (food, shelter, utilities) and still have money set aside for any unexpected bills, emergencies, and your future retirement.

Yet, I think the biggest part of achieving financial stability is that you are not stressed about money.

You know you’ve reached financial peace when you aren’t worried about an unexpected cost or panicking over how you’ll pay your rent, mortgage, or any accrued debt. How much money is financially stable?

How much money you need to be financially stable depends on your cost of living and what your needs will be. But to reach short-term financial stability would be to have 3-6 months of living expenses saved. Long-term financial stability would be having enough to retire without running out of money. Signs You Might Be Financially Unstable

Although I covered the definition and a bit about what it means to be in a good financial place, I want to share some warning signs that your finances might be a bit unstable first.

Sometimes you may not realize you are on the verge of instability or you might be in some form of denial.

Back in 2013-2014, I knew I wasn’t financially in the best shape but chose to pretend it wasn’t bad.

But until I really reflected and wrote down what was happening, I didn’t realize how bad my money mistakes were.

Here are the signs of unstable finances: Very low emergency fund or you have none at all

Maxed out one more credit cards and barely making minimum payments

Your credit score is extremely low, or the scoring has been sinking If you lost your job, you’d be financially screwed immediately You are not saving for retirement because you can’t afford to or know how to After your monthly expenses, you have nothing leftover Late fees or overdraft fees happen quite regularly Money is constantly stressing you out and losing sleep over it You end up borrowing money from family or friends more than you want to admit You’re drowning in total debt because you’re making bare minimum payments, trying to consolidate, or trying to push it off. These are just some of the handful of warning signs. And five of the above, I dealt with for a few years after college.Maybe you fit into only a few of the signs above or maybe them all.The important step here is not to feel ashamed or feel that you are alone — as so many people of different generations are battling these too.But the great news is you are learning and reading this post, looking to make changes with your finances.In the next section, I’ll cover how you can become financially stable. These are the steps I took in order to reach a new level of financial health. 6 Ways to Become Financially Stable Generally, when searching for answers about personal finances and becoming financially secure, I think many people are hoping for magic formulas.Or just looking for some sort of secret process that has never been shared before.If that is your thinking, I need to tell you that there is no secret formula ! Don’t worry, in my early days of researching I was hoping to find that too.But in reality, the steps to becoming financially stable are really straightforward. 1. Start Living Below Your Means A big problem I think many of us face is that we live above our means . We fund a lifestyle that we clearly cannot afford for whatever reason that may be.If you want to get financially stable, […]

source 6 Steps to Become Financially Stable This Year and Beyond