Are you struggling with balancing your income and expenses? Do you want to know how to be financially stable? If yes, then this article is for you.
Financial stability is a big cause for concern and an area of interest for everyone.
For you to be successful in your path and achieve the goals you have, you need to be financially stable.
There have been differing opinions on how much money one needs to have to be financially stable.
This figure varies from one individual to another.
Because of this, there is a consensus that what financial stability means to one person might differ from another.
Nevertheless, there is a common basic principle that defines being stable financially which everyone agrees with, and we will consider soon.
After we must have considered what it really means to be financially stable, we will also see the importance of aiming for financial stability.
Then, of course, we will discuss the various steps and measures you can take starting today to forge a path of financial stability for yourself, irrespective of your age.
What Does it Mean to be Financially Stable?
Being financially stable means being in a position in your personal life where you have full control over your finances and can take care of all your living expenses, and still have some money leftover.
It is a situation whereby you are not indebted to any individual or organization, but rather have enough to cater to your needs conveniently.
To achieve such financial stability, you must be spending less than you earn.
You might be earning income from a paid employment or from a personal business you own.
It also requires that you have enough money saved up to cater for emergencies and unexpected bills.
And that is after you have successfully taken care of essentials like the basic life amenities, such as food, shelter, and clothing.
A financially stable person does not wake up to worries or anxieties about how to meet his/her daily needs.
On the contrary, he already has all these covered financially.
This person even has money leftover to save up.
Why is Being Financially Stable Important
There is no denying how important financial stability is to a business and the economy of a country.
A business or nation that is financially stable gives the employees, customers, or citizens as the case may be, a sense of security and peace of mind.
It also reinforces the trust of others in the system.
This would make people and businesses more eager to invest and keep their patronage, knowing that there is stability.
However, the focus of this article is not on financial stability for businesses and/or countries.
Rather, we are interested in knowing how you as an individual can benefit from being financially stable.
Whether you are in your teen years, the 20s, 30s, 40, 50s, or above, it is never too early nor too late to give attention to your financial stability.
A lot of people have made the mistake of postponing this important aspect of their lives to another time, thereby suffering the dire consequences that come with that.
That should not be the case with you.
Here are some of the reasons why you need to work on becoming financially stable:
Financial Stability Contributes to Good Physical and Mental Well-being
While stress and the effect on physical health might affect everyone, those who are financially unstable are more susceptible to this.
With financial instability comes a lot of anxieties, worries, and increased stress.
When you are not financially stable, you tend to overthink things buying decisions,.
You are also worried and anxious about making ends meet.
And this can cause you emotional pain and disorders.
How about the benefits of being able to afford what money can buy? We all need things like healthy food, a good place to shelter, access to medical care, e.t.c. to stay healthy and good.
Being financially unstable would mean that we are not able to afford all these.
And this intuition can cause Illness and poor health.
To make it worsen, a person might even suffer from mental illness or depression as a result of financial instability.
We’ve seen this happen many times with those who are indebted and have no stable source of income to conveniently clear off those debts.
This can take its toll on the mental health of such individuals and make them mentally incapacitated.
No doubt then, working on gaining financial stability can do a whole lot of good for our physical and mental health.
It Gives a Sense of Security Which Breeds Better Productivity
Sometimes, our lack of Productivity, whether at our place of work or while pursuing our personal goals and objectives might be attributed to financial instability.
When you are not stable financially, it drains your energy levels and makes you lose focus.
Therefore, the time that would have been best spent on completing tasks and carrying out productive activities would be used to indulge in self-pity.
This is why many people who are weighed down by debts for example find it hard to concentrate at work or finish their tasks.
The thought of this, coupled with the weight it puts on them can render them very inefficient and unproductive.
On the other hand, when you can attain financial stability, you get a sense of security.
You are not under undue pressure at work, because you are not fighting tooth and nail to save your job.
Also, you have peace of mind that allows you to focus on important tasks and responsibilities, and see them to completion.
Indeed, the role that financial stability plays in productivity cannot be overemphasized.
Financial Stability Earns Respect
No doubt, sometimes you might feel irritated by people who are always complaining about their financial problems and are always asking you for money.
It might be that you have even lost respect for these.
Even if these are close family members or friends, it gets to a point that you become frustrated and irritated by their demands.
Well, this can be you too if you fail to work on achieving financial stability.
When you are known by others as the one who always has financial problems and asks for money every time, it would be hard to gain the respect of others.
And this is not just limited to your close circle of friends and relatives, but even respect from your employer and colleagues would be lacking.
It Offers You an Opportunity to Take More Risks and Hence Get Innovative
Innovation is brought about by conscious thoughts, and a calm mind.
When you are financially stable, it is easier to have such conditions.
Also, when you do not have financial stability, you might be pessimistic about risk-taking, and be more conservative or stringent with the use of funds.
While risks have to be calculated before they are taken, they are essential for growth and innovation.
That is why financial stability is very integral to coming up with innovative ideas and getting creative.
With financial stability, there is an extra drive to take calculated risks, which often leads to greater success.
Financial Stability Can Give You An Edge for Employment Opportunities
Experience has shown that sometimes, people who are not financially stable often struggle with getting job opportunities when compared with those who are.
This is because an employer would be more willing to hire those who look like they have financial stability, knowing that their source of motivation is not the money.
Another reason why financially stable people are attractive to employers is that they are more focused at work.
On the contrary, if you have financial instability, you might be letting your money problems interfere with your work, and no business owner would want that.
Therefore, you might just find that attaining a good level of financial stability would offer you a more competitive advantage when seeking employment.
It’s a Good Retirement Plan
Whether you work in the public or private sector, or you own your own business as an entrepreneur, you would have to give thought to retirement as you get older.
It might involuntary retirement when you get to a certain age or years of service in the public sector, or a voluntary one as a business owner when age and health start telling on you.
During this time, sustainability and survival can be quite difficult, especially for those who have not gotten financial stability.
On the other hand, if you are financially stable, you can rest easy at this time in your life.
You won’t have to be overly dependent on family or the government.
You can take care of yourself conveniently.
How to Be Financially Stable – Measures to Take
Whatever age you are right now, it is very important for you to seriously consider being financially stable.
This is even more important if you are still young, like in your teens or early adulthood.
At this stage of your life, you have ample opportunities and enough time to build financial stability.
Do not be misled, there is no shortcut to financial stability neither is their magic towards it.
Even if you are not in your teens or twenties, it is not too late to strive for financial stability.
It takes a process of conscious efforts and the right methods and application.
Here are some of the measures you can take to be financially stable:
1Cultivate a Saving Culture
This is the first most important step towards attaining financial stability; having a saving culture.
That means you need to set aside a particular amount from your income regardless of how small to put into your savings account.
This can be used for emergencies and also ensure you have saved up funds for use in the future.
To ensure you are consistent with this, you can use systems provided by many financial organizations that auto-debit your account at the due date you set for it.
With that, you do not have to worry about finding the motivation to keep up with your savings, as it is done automatically.
If you are really looking at building financial stability, then this measure is non-negotiable.
2Stop Buying on Impulse; Make a Budget
Impulse buying is responsible for many cases of financial constraints and the resulting instability.
Buying on impulse means purchasing things without prior planning, and just for the sake of it.
It might mean
- buying food outside when you have food at home,
- addiction to shopping online for everything that catches your attention or even
- bending to pressure from friends to buy what you do not need.
One thing that can help you control impulse buying is making a budget.
You need to know your monthly income and also have your monthly expenses clearly in mind, and on paper.
When you do this, you can plan your spending around the budget you make, making sure you avoid impulse buying.
3Live Below your Means; Don’t Live to Impress Others
If you are working on becoming financially stable, this is the time to have a very keen look at your list of expenses on a daily and monthly basis.
What utility bills are taking a high percentage of your income? Are there liabilities you have that you can do without?
If yes, then it is time to start making those changes, by cutting down on them or removing some totally.
You need to understand that to attain financial stability, you cannot live the life that most people live.
Understand that your income level differ, and so your financial choices should be different.
The quickest way to financial stability is living below your means.
4Make Calculated Investments
As important as savings are towards financial stability, one can argue that investments are even more important.
If you make the right investments, you can watch this grow massively in a few years.
When money saved might be affected by inflation, it is not the same with investments.
You can make a huge percentage of interest on your investments, depending on the type of investment.
Before going into an investment though, be sure to seek the opinion of investments experts who can direct you on the ones with low risks and high returns.
Otherwise, you might end up in more problems financially than the stability you seek if care is not taken in this area.
5Payoff Debts and Try to Avoid Them as Much as Possible
Debts are also another big challenge to getting financial security.
If you have loads of debts hanging on your neck, it might be hard to gather funds together towards getting financially secure.
Therefore, it is important to come up with a working plan to pay off all your debts within a stipulated time period.
This would not only give you the needed peace of mind to be more efficient but also allow you to save more.
As much as paying off debts is important, it is also important that you try as much as possible not to fall into new debts.
Living within your means and avoiding luxuries can be a good step towards staying away from debts.
Once you can get debt-free, your journey to financial stability gets easier.
6Don’t Depend on One Source of Income
At a time when there are many opportunities to make money, a lot of these from home, depending on a single source of income is financially suicidal.
One thing with being financially stable is that you would need to earn as much as possible.
And you cannot do this depending on just a single source of income.
Hence, start looking for other ways in which you can generate more money.
This is in addition to your primary source of income.
If possible, you can start working two or more jobs possibly on a part-time basis.
You can also pick a side hustle that gives you time and still pay you well.
Additionally, you can try getting more skills that put you in a better position to get more opportunities.
All these are ways to increase income and financial stability.
7Take Advantage of Retirement Plans
In many organizations in a lot of countries, be it private or government-owned, there are retirement arrangements.
This might take the form of pensions.
You can start putting a percentage of your income away towards your pension plan.
It is important to take advantage of these.
Do not be quick to discard the idea of registering with a pension company, or put it off for later.
The time is now to start planning for your retirement and to be financially stable.
8Plan for Insurance And Emergencies
One of the factors that might affect financial stability is emergencies.
These might be events you didn’t expect that might eat deep into your finances.
This might make you take loans and become a debtor.
That is why it is important to invest in emergency funds.
Also, get insurance where it is available as an option.
This is like preparing for the rainy days, and you would be glad you did in cases of emergencies
Final Thoughts – How to Be Financially Stable
You might consider yourself a high-income earner or might feel that you earn a low income. Whatever the case, financial stability is achievable by anyone and everyone.
If you are ready to be patient, live within your means, have a good budget, and cultivate a saving culture, then, you are almost there.
Endeavor to apply all the suggestions given so far on how to be financially stable.
You will find that you can achieve this successfully.