Financial stability is acquired by creating an economic planning discipline.
When your finances are balanced, there are no concerns about making monthly payments because you have the funds to do so. You feel debt-free and can enjoy those things you love so much without worrying about affecting your budget.
It sounds like a dream, but financial stability can be achieved at any time in life.
It all starts with a change of mentality. Believe you can do it. Then, know the factors that will keep you in good financial condition. Lastly, be consistent, this will lead you to achieve your goal.
Here are six steps to help you achieve the financial stability you’re looking for.
1. Lower and Settle Debts
It’s crucial to keep debts low. You must start by eliminating or attacking those debts that have an interest equal or greater than 7 %; these have a greater impact on finances. Then, move on to minor debts and continue until you can settle them all.
Create the habit of saving money. If you understand that you cannot save because you don’t have enough left over to do so, you must analyze those recurring expenses that aren’t essential and that you can avoid or reduce. This requires an analysis on your part and a lot of discipline.
3. Establish an Emergency Fund and a Retirement Plan
Having an emergency plan and a savings account allows you to establish priorities. In addition, it is a good planning practice. The money saved is an additional reserve to your recurring expenses and will not affect your monthly budget.
Being consistent with this practice is an excellent way to reach and maintain financial stability.
An individual retirement account (IRA) is an efficient practice to save for your retirement, while getting a guaranteed growth of the money within this account.
Spending an amount of money on a project or business to make a profit can sound a bit risky. The reality is that you must do it in a way that the investment is in something you like or are passionate about. Invest money and time in learning or developing a skill. Most employers look for people who are involved in things or activities that aren’t necessarily related to their area of work. This shows them that you’re an optimistic employee who’s willing to grow.
Nothing is “too little”
Don’t think that what you have to invest at the moment is “too little,” because this thought stops you from doing so. Although you may find it intimidating, learn about the topic and never overestimate the amount of money you need to get started.
5. Create Multiple Sources of Income
This step goes hand in hand with the previous one. Think about what you would do if you lost your current source of income. An additional source of income will depend on your knowledge in several areas. You must not limit yourself only to what you’re used to.
6. Establish a Capital
Always keep a balance limit on your account. It doesn’t matter if it is $500 or $800, this will be your new zero. The limit will allow you to set how much more you can pay or withdraw from your account, and thus, you’ll begin forming your financial stability.
This is a measure banks use to help people get out of debt.
No Need to Wait
Remember, you don’t have to have a specific amount of money or age to start planning toward a financially stable future. In fact, the sooner you start, the better. The money you invest will grow exponentially. As the saying goes, Rome wasn’t built in a day Go ahead! Start small, but start today!
TOLIC Gives You More for your IRA
You can also transfer your IRA or annuity with TOLIC. We offer you 2 IRA plans: The Fixed IRA plan will help you grow your investment with a guaranteed interest, and the Indexed IRA plan gives you the potential to increase your profit based on index growth and with market downturn protection.