How to Get Financial Security (15 Powerfully Helpful Tips)

It’s not that hard to get financial security, if you know what to do and take the time to do what needs to get done.

Thankfully reading this article will really help as it reveals a lot about financial security and tips to help you become financially secure.

 

Why Strive to Get Financial Security?

Charles M. Schultz, the creator of the Peanuts comic strip popularized an item in one of his drawn caricatures in 1954.

The brother of Lucy, Linus, was drawn with a blanket that he was holding and sucking his thumb at the same time.

Linus called this item his “security and happiness blanket.”

Whether we realize it or not, as children and adults we all want some sort of security in our lives.

We don’t walk around with a blanket wrapped around our shoulders while sucking our thumbs.

However, some of the items that can bring us peace of mind in our lives include:

• Being surrounded by loved ones
• Having a steady job
• Having a place we can call home
• Having clothes on our back
• Having money in the bank

Therefore, let us look at obtaining our financial security blanket by looking at ways that we can secure our financial security.

 

What Is Financial Security?

Financial security is that state of being in which the mind is at ease and at peace as it relates to an individual’s financial situation.

Being financially secure doesn’t mean that one is not aware of their finances, but they are comfortable and confident.

The financially secure individual is in a good spot in that they know that their income outweighs expenses, being debt-free, securing a retirement future, and money to cover emergencies.

 

15 Powerfully Helpful Tips for Getting Financial Security

 

1. Plan

The first step towards attaining financial security begins with a plan.

In other words, what steps or actions need to be taken towards achieving that financial security, and what is one’s financial security goal?

As part of the plan, one needs to outline the steps that will be taken towards that plan’s achievement.

That plan for financial security includes:

• Having sufficient monies each month to pay financial obligations
• Having x amount of dollars for the retirement years
• Having an emergency fund set up
• Having a plan on achieving all of these financial expectations

Once the plan has been established, then the individual needs to set aside some time to analyze their current financial situation.

 

2. Budget

As part of this process, a budget should be prepared.

The budget will help you to analyze what your income is for the month and years, expected anticipated revenue, and what are the total expenses on the expense side of the budget.

It is important to budget monies for those important critical line items to seed and to continue to contribute towards an emergency fund towards one’s retirement.

By analyzing the personal situation, one will be able to determine whether there is sufficient money to successfully have an outcome of a balanced budget.

In other words, if there is not enough income to sufficiently cover the expenses, then additional income may be required.

This can be accomplished by taking on additional jobs or tapping into other sources of revenue.

Also, as part of the plan towards having sufficient money to set aside for the future, it is critical to analyze the expense side of the budget.

One may need to cut out certain expenditures as it relates to various expense line items. As an example, perhaps the entertainment line item needs adjusting, the food line item, etc.

Talking about budgeting, below are some helpful guide to budgeting money:

• Read This to Know Why Budgeting Is Important
• Read This to Know Best Budget Planning Tools
• Read This to Know Best Purposes of a Budget
• Read This to Know Budget Apps For College Students
• Read This to Know Budgeting for Senior Citizens

 

3. Eliminate Bad Debt

Working towards financial independence or security also requires minimizing bad debt.

Bad debt can be defined as carrying balances on a credit card in which the credit card company charges significant interest for the use of their money.

An individual should use credit cards responsibly and endeavor not to carry any balances.

As opposed to bad debt is “good debt. This can be defined as owning a home or increasing one’s education through continual learning.

These are defined as good debt because they can be considered as an investment and have a good return on the use of one’s money.

Check this out for more tips on getting rid of bad debt.

 

4. Create a Nest Egg

As part of the efforts towards achieving financial security, it is important to have a contingency fund or nest egg.

This fund should be built up to a level of monies that will cover 3 to 6 months of an individual’s expenses.

In other words, if the expense side of the household budget is $2,500, then the individual or family should endeavor to reach a goal of $7,500-$15,000 in their nest egg.

This fund will be available to manage any potential emergencies, including the loss of employment.

This certainly meets the very definition of financial security in that one wants to feel “safe” during any potential downturns in one’s life.

 

5. Invest

The next important element towards financial security is investing.

Investing is that important long-term process in which an individual consistently invests their money in long-term opportunities that will maximize the return on their money.

This can be through a variety of investment vehicles including stocks, bonds, mutual funds, etc.

Many reputable investment firms will help an individual through this process and with minimal fees, help the individual to choose the appropriate options available for a sound return on the investment dollars.

Generally, these firms will suggest certain options based on an individual’s tolerance to risk, the number of years that the investment will be engaged, and the financial goals of the individual.

 

6. It’s What You Keep

For the individual working towards financial security, it is important to remember the all-important concept of it’s not what you earn but what you can keep.

In other words, one needs to incorporate and maximize tax shelter options so that the legal maximum amount of money is kept by the individual while still fulfilling their obligation as a contributing citizen.

Therefore, it may be wise to utilize a financial advisor and certainly take advantage of contributing through a variety of IRAs to maximize one’s tax liability.

Two IRAs would include Traditional IRA where the taxes are deferred and only paid when the individual begins to draw out their investment in their retirement years.

The other IRA is known as a Roth IRA in which the individual pays their taxes now and then when the monies are drawn out during the retirement years, there is no tax assessed on those monies.

 

7. Automate

A powerful way of attaining financial security is through the use of automation.

Through automation, monthly contributions are made to an investment fund.

This automatic financial process is set up through one’s financial banking institution and monies are automatically contributed on a set day during the month.

By automating the contribution, the individual doesn’t have to worry about remembering. The investment monies are automatically deducted.

This helps the individual to stay true to their budget and takes the challenge of remembering out of the equation.

Also, it provides that added measure of discipline.

It’s almost like of sight and out of mind. It just happens and occurs.

 

 

8. Live Within Your Means

Another important component of reaching one’s financial goals is for the individual and family to live within their means.

This commitment will help to prevent overspending and going into debt to keep up with the neighbors or wishing to purchase the newest model of car or the latest in technology.

An important mantra to embrace is whether the money that is expended is in the budget and is it in the bank?

The answering of these 2 questions will help the individual and family to stay within the boundaries of their monthly income.

Related: Powerful Tips on Living Within Your Means.

 

9. Educate Yourself

As part of the financial security goal, an individual needs to educate themselves as it relates to finances.

The focused individual should know the basics of investing, diversifying, the power of compound interest, the value of investing in the stock market, etc.

An individual can learn on their own by reading personal finance books, searching the Internet, and reading a variety of articles, attending seminars, or classes, etc.

 

10. Maximize Benefits

If an individual works for a company that offers a 401(k), it is critical that the individual, as much as possible, maximize their portion of their contribution to realize the employer’s commitment to their employees.

If an employer will match a 401(k) up to 4% of what the employee contributes, then the employee must contribute 4% of their salary to investments that are offered through the company.

To do otherwise, is, quite frankly, foolish as it leaves money on the table that one can utilize towards their financial security.

Read this to know what happens to your 401(k) when you quit your job.

 

11. Create A Will

Talking about one’s demise is never a fun subject or one that is in the front of an individual’s mind.

However, a sensible individual concentrating on financial security will ensure that a valid will is in place.

This is important so that when an individual passes from this life, their financial affairs will be in order.

Specifically, the will should outline how the estate will be portioned out as well as providing for the power of attorneys and other wishes in regards to medical issues that may be faced by themselves or a family member.

These actions now will save heartache and will maintain the financial integrity of the estate so that government entities do not have to intervene.

Involving the court system in determining the managing of an estate can have negative implications on the overall worth of the assets.

 

12. Savings

Another important aspect of obtaining a secure financial future is to have a savings account.

A savings account can be utilized for a variety of out-of-the-ordinary expenses.

Examples of those types of expenses could include car repair, vacation, appliance breakdown within the home, etc.

Having a savings account will prevent the use of having to utilize a credit card or other types of loans to cover that unanticipated expense.

Talking about savings, below are some helpful guide to saving money:

• Check This to Save Money Fast on a Low Income
• Check This for 100 Envelope Challenge
• Check This to Save Money Live Better
• Check This for Reasons to Save Money
• Check This 30 Day Rule to Saving Money
• Check This to Save $10,000 in 6 Months
• Check This to Save $20,000 in a Year

 

13. Earn More Money

One may find that additional income to satisfy their budget needs towards achieving financial security may require added income.

Therefore, if the individual has an opportunity to work overtime or take on additional jobs outside the home that would be optimum use of one’s time.

It doesn’t necessarily need to be a long-term commitment but just enough time on certain weekends or hours of the week to add additional income to the household.

This can be done by taking on a driving job with a delivery company, working through the Internet on various jobs that are afforded, etc.

 

14. Diversify

Diversification is also a critical component of financial security for an individual.

This means that all of their financial “eggs” are not in one financial basket.

As part of a diversification strategy, the individual should have monies in investment vehicles such as the stock market, possibly CDs, money market, alternative investment (precious metals, land,), etc.

This will ensure financial security if there is a negative occurrence that financially impacts one or more of those different pools of investment money.

Also See: How to Make Money in 1 Hour &  How to Make Money Work Hard for You.

 

15. Surround Yourself With Financially Secured People

Yes, birds of the same feather flock together, as the popular saying goes.

Same with getting financially secure – the more time you spend with those who are financially secure, the more you will be yourself.

 

Financial Security FAQs

 

How Do I Know if I Am Financially Secure?

A few indicators, amongst many, many others, show that an individual is financially secured.

Some of them include:

• Not worrying about losing their job
• Never late with paying their financial obligations
• Not losing sleep over their finances
• Never using their credit cards out of necessity

If the above apply to you, then you are financially secure!

 

What Is the Greatest Threat to My Financial Security?

The greatest threat to one’s financial security may be taxes. This is due to the reality that people may underestimate their tax burden in retirement.

 

You Can Do It

Financial security is possible.

The focused individual with a plan can successfully achieve their goal of managing the storms of life and be secure in their retirement years.

 

Conclusion

Everybody wants to feel secure.

As children, we may have had a “security blanket” that provided the needed comfort.

Today, we still need a security blanket.

However, rather than being woven from wool or other fabrics, the security blanket we need is blended with a variety of investments, funds, and strategies.