You’ll need to build good financial habits to become financially successful and stable. This stability means spending more money than you earn. It would require discipline, patience, and diligence to realize this financial state, as you must first learn to control your spending, after which you can then plan to save money, and get out of debt; that’s if you’re in any.
You definitely don’t want to be in a financially devastated condition before you start taking this seriously. Take charge, and start to protect your income now that you can before you find yourself in a situation that would cause money to slip away from your fingers. These tips will help you eliminate debt, increase your savings and increase financial security for your family.
#1. Don’t Spend Money on a Whim
This is like eating out and shopping extensively until you’re out of money. You can only attain financial stability when you monitor the way you spend. Atleast for the main time, focus on your needs and not your wants.
#2. Save Money
To be financially stable, you’ll need to learn to spend less than you earn as I have pointed out earlier. Only spend on the right and important things. This affords you the opportunity to save money. So learn to negotiate phone, cable and utility bills. Or simply reduce how much you spend on grocery, restaurants, and clothing.
Read Also: How to Stop Being Broke
#3. Track your Spending
You’ll need to develop the habit of monitoring where your money is going occasionally. Perhaps once a month you can write how much you have spent, and see what areas you are running deficient. When you do this, you can fully understand whether or not how efficient your financial state is going.
#4. Invest Money or Better Still, Start a Business
Investing money in businesses or better still, starting your own business will help you secure your financial future. When retirement isn’t lurking nearby, it’s wise to start setting some money aside for investments.
#5. Eliminate and Prevent Debts
There’s a psychological effect to owing people. This effect would work against your financial stability. Know how much you owe and create a plan to pay it all back. After paying, make sure you prevent it.
- Plan to pay off debts with the highest interest rates first.
- Another option is to pay off the debts with the smallest balances first. This way you achieve goals of paying things off sooner.
- Student loans typically have low-interest rates of below 6 percent. Unless the interest rates on your student loans are higher than 6 percent, there is no need to pay down this debt sooner. Continue making the minimum payments, and divert your other income into paying down higher-interest debt or into investments with a larger rate of return.
- Be aware that there are ways to get student loans forgiven. Certain jobs, such as those in education and public service, and programs like AmeriCorps, may allow you to have some or all of your loans forgiven. You must meet specific criteria to qualify for loan forgiveness.
- Your mortgage, if you have one, is not considered bad debt.
Read Also: 6 (Six) Ways to Handle Debt Problems
#6. Budget and Stick to it
Be sure to budget every penny you earn. By doing this, you’ll be able to tell where your money is going to and seeing that it goes to where you actually want it to go to.
- Figure out your total monthly income.
- If you get paid on an hourly basis, then you’d have to figure out how much you earn in a month. This will help you figure out your average monthly income and you can use this to create your budget.
- Subtract your expenses from your income. This will tell you whether or not you are overspending. If you are spending more money than you are currently earning, then you’ll need to sort your needs in order of priority.
- Make a plan to significantly reduce your spending. You do this and you’ll find out that at the end of the month, you’ll be left with more money which you can either use to pay off your debts or save in an account for emergencies.
#7. Don’t Delay in Paying your Bills
Do not procrastinate paying your bills. If you do, you’ll be giving room to debt growth. This would destroy your financial stability. You can also try to automate paying your bills through automatic deduction to make paying easier for you.
#8. Don’t Allow Bad Habits Ruin your Finances
This will take some discipline coupled with patience. If not taken care of, the bad habits will eat into your income and rob you of a financially stable future.
#9. Take Care of your Health
You can’t achieve financial stability if you’re not healthy. Your health is your responsibility. Protect it because it’s your vehicle to financial success.
#10. Keep your Family Secure
Starting to save for an emergency fund is the first step to keeping your family secure so that if anything happens, you’ll have the money to handle it. If you have a spouse and/or dependents, you should definitely get life insurance and make a will – as soon as possible! Also, research other insurance, such as homeowner’s or renter’s insurance. Keep your emergency account separate from your checking account so that you’re not tempted to use it.
There you have it! Got a question, ask me.