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How to Become Financially Stable (20 Powerful Tips to Help)

September 13, 2022

Yes, you can definitely become financially stable and it’s not that hard if you know what to do and take the time to do them.

This article reveals as many as 20 powerful tips to help you become financially stable.

Why Become Financially Stable?

For the most part, everybody enjoys stability in their life.

Often, that stability is demonstrated in having a steady job, being involved in stable relationships, living in a stable world, etc.

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Stability can be defined as not having too many surprises in life and knowing how things are going to turn out or not having to worry about things falling apart.

Having stability in one’s life provides a level of comfort and security.

The same can be true for our financial lives.

A balanced budget is a perfect illustration of stability.

Enough income is coming into the household to match the expenses or debt that is leaving the household.

However, instability can happen in our lives and especially in our financial affairs.

A loss of a job, illness, or unexpected major expenses can quickly turn what was thought to be a stable situation into instability or unbalance.

Personal Story

There is nothing as unnerving as being in a situation where the finances can throw us for a loop, and we begin to scramble for potential answers and solutions.

I and my wife had just moved and had taken on a new job.

It required that we relocate some 1900 miles away from our home, which we kept as a rental property.

The new job seemed like it would work out, it offered a fairly decent wage and took us to a new and vibrant community.

Imagine my horror when after less than a month into the job I realized that I had made a terrible mistake.

Suffice it to say that my boss was not quite the individual that I thought they were, and the dream job turned into a nightmare.

My thoughts had me scrambling on how to survive for a year, because of the lease, till we could high-tail it back home with my tail between my legs.

It was a very unstable situation that spilled over into our finances and was a great cause for anxiety and many nights of lost sleep.

The lesson re-learned was that there are no guarantees in life and things happen that create instability.

However, a solid foundation that can help to weather the instabilities of life is the stability of our finances.

What Is Financial Stability?

Financial stability can be best defined as a state of mind in which you are pleased or confident with where you are at financially.

It is demonstrated in that you don’t worry about pending bills, your indebtedness is nonexistence or very low, you have money in the bank, and retirement funds that are growing.

Also, you have an emergency fund set up to cover anywhere from 3 to 6 months of bills in the event that your revenue is nonexistent.

Being financially stable is being in a financial “sweet spot” that worries about money are the furthest thing from your mind your indebtedness is nonexistent or low.

20 Powerful Tips to Help You Achieve Financial Stability

1. Know That It’s Personal

The first important step to take towards financial stability is to understand that your financial situation is individual or your own personal situation.

Therefore, it’s not about keeping up with the Joneses or giving the impression of pursuing the reality of being better off than you are.

It is personal in the sense that no one else is going to care for your money as you do.

Therefore, your finances will reflect your values, your goals, your retirement plan of action, etc.

Even people who you hire, potentially, as a personal financial investor will not take the same interest in your money as you do.

2. The Wisest Investment

Remember that you will or have accumulated a number of assets.

Those assets may include the purchase of a home, vehicle, robust investment portfolio, savings accounts, etc.

All of these are assets and help to formulate your net worth.

However, your net worth is not who you are.

You are more than these assets.

Therefore, in understanding that you are the most valuable asset that you have, it is paramount to invest in yourself.

By investing in yourself you are well on your way to financial stability.

3. Enjoy Your Work

How often have you heard it said to do something that you enjoy, and you will earn money and never work a day in your life?

This is certainly true and is a good investment of your time and effort.

This is better than earning a larger paycheck by doing something you don’t enjoy.

4. Budget

A critical practical step towards obtaining financial stability is to be committed to formulating a budget.

A budget is a financial document that specifies what you have coming in on the income side of the budget as well as what is being expended on the expense side of the budget.

A key financial stability commitment is to pay yourself first.

Remembering that a budget is simply a financial tool, it will help to keep the monthly finances and provide a discipline towards obtaining financial stability.

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

5. Live within Your Means

A critical financial rule towards financial stability is to always live within your means.

Better yet is the commitment to live below your means.

In other words, spend less money than what is coming into the household.

Remember if it’s not in the budget and it’s not in the bank then you cannot spend.

Additionally, when those serendipitous times come when bonuses or pay raises, or windfalls arrive in your checking account, it is important to invest in those windfalls.

In other words, continue to follow your budget as drawn up and ignore these additional monies as if they’re not there, and continue at the same level of spending or less.

6. Don’t Carry Debt

A primary strategy in achieving financial stability is not to carry debt.

Indebtedness not only can add stresses and strains to your personal and emotional life but are counterproductive when it comes to best utilize your money.

This is due to the fact that indebtedness usually equates to owing somebody some money and generally they want a return on that length of note money.

Borrowing of money is associated with the charging of interest on any balances that are carried.

Regardless of whether the annualized percentage rate, APR, is low or high, it is still money that is being given to others rather than you retain it.

7. Emergency Fund

Most professional financial advisors advise that 3 to 6 months of expenses be saved and set aside in some sort of interest-bearing account.

In the event of any unforeseen circumstances happening in an individual’s life, medical emergency, major appliance repair, loss of a job, then those emergencies can be covered with this money that has been set aside.

The benefits will not only give you peace of mind but also keep you from being indebted to anyone or any company for any borrowed money that may be required if an emergency arises.

8. Future

Financial stability is not only about the present financial situation but the future as well.

A major consideration in attaining financial stability is having a financial plan for your retirement.

Therefore, it is important to set aside money on a regular basis each month and invest wisely so that a good return on one’s investment can be realized.

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9. Enjoy Life

Of course, we don’t want to be like Ebenezer Scrooge or other famous misers in that our only focus is on money.

It is meaningful to enjoy your life along the way.

Also, as it relates to money, it is not only important to spend money on yourself and your family but also to provide donations to help support your favorite charity or cause.

10. Stay the Course

Sometimes speed bumps or detours occur in our lives.

When those bumps or detours occur, stay the course and don’t give up.

It may require a little bit of a diversion, but you want to keep your destination or goal in mind on getting there.

11. Low Hanging Fruit

Many companies offer benefits to their employees.

In addition to dental, medical, and health insurance coverage some companies offer retirement benefits.

Those retirement benefits are in the form of a 401(k) where an employer will match up to a certain percentage of an employee’s salary.

Maximize any benefits offered by your company as it relates to a 401(k).

Not to fully maximize the 401 (k) percentage offered by the employer would be leaving money on the table.

Financially Stable

12. Diversified

A big part of obtaining financial stability is to make sure that you diversify your investments.

This means that you should have money set aside in different vehicles or spread out over a number of investment opportunities.

If one investment is not performing as well as your well as you anticipated, then the other investment may make up for the slow rate of growth with other accounts.

13. Earn More Money

Another way that you can become financially stable is to earn extra money.

This means that you take on extra jobs as needed to add streams of revenue to your budget.

This doesn’t necessarily mean that the extra jobs are done week after week and or day after day but perhaps taken when special events or occasions occur.

For example, if planning for a vacation, or purchase of a major piece of equipment in the household, then working at an extra job towards realizing that needed money will help you to achieve that monetary goal.

Also making the purchase of that item or the needed vacation will be more pleasurable because you worked hard in earning extra money.

14. It’s What You Keep

Another important aspect to gaining financial stability is to remember that is not necessarily how much you make but how much you keep.

It is important to understand the various tax laws and deductions that you are eligible for and reflect them when you file your income tax.

Take into consideration whether it is to your advantage to take a Traditional IRA or take advantage of a Roth IRA and pay the taxes now rather than later.

As with all tax advice, it is best to consult with your tax professional on the best course of action to take.

15. Insurance

As part of the financial stability goal, it is important to carry an umbrella.

By carrying an umbrella this is meant that you should have proper insurance in the event that something unforeseen occurs in your life or the lives of your loved ones.

Insurance is like carrying an umbrella.

Oftentimes you don’t need it but when it rains you are glad that you have it.

Insurance is the same way.

Oftentimes you don’t need it but when the “rain” comes into our lives we are glad that we have this insurance.

16. Recalibrate

At times, it is important to stop what we are doing in life and reflect on what we are doing and where we are at with the plans that we have made.

Even the greatest pieces of technology sometimes need to be recalibrated in order for them to be readjusted again to perform and function the way that we anticipate them to perform.

So, it is with our finances.

It is good to stop now and then and take stock of where you are at and recalibrate as necessary.

17. Keep Spending in Check

It goes without saying that spending can sometimes get out of hand.

Often, we see something that we want rather than something we need and in the heat of the spending moment, we purchase that item.

Therefore, it is important to keep your spending in check and reduce spontaneous or compulsive buying.

18. Track Expenditures

This is a simple trick or tip that one can be disciplined to follow in that they write down everything that they purchase.

Often, at the end of the month, you may wonder where the money went.

By tracking your expenditures, you cannot only pinpoint where the money was spent and on what but also tracking gives you insight and create a spending discipline that minimizes these unbudgeted and spontaneous purchases.

19. Health Care

As part of being financially stable, it is critical to make sure that one maintains their health.

By not eating properly and exercising regularly, this neglect may compromise one’s health which in turn may compromise their ability to continue earning which in turn will create instability as it relates to one’s financial future.

20. Rinse and Repeat

It’s not enough to know lots of the tips included in this article.

It’s important to know, then rinse and repeat many of them, to help you become financially stable… and maintain the financial stability!

Check out the following related financial articles, that can help you financially:

Financial Stability FAQs

How Much Money Do You Need to Be Financially Stable?

For some reason or another, when a number of Americans were asked about the amount needed to feel financially stable, the number came in at $516,433.

Only 20% of those that were polled said that it would take $1,000,000 to obtain that financial confidence.

What if I Have a Modest Income?

Whether you have a modest income or are making significant amounts of money, the process of becoming financially stable is the same for both categories of earnings.

Generally, an individual who earns a significant amount of money indulges in a lifestyle in which those significant dollars are utilized.

In other words, their spending rises to their level of income.

So, it is for an individual who could be defined as having a modest income.

Their level of spending rises to the level of their modest income.

Therefore, the basics of becoming financially stable are the same formula for both levels of income.

Being financially stable is not a matter of the amount of money an individual has.

You Can Do It

To become financially stable doesn’t begin with the pocketbook, a budget, or anything to do with bank accounts or investments.

To be financially stable begins within the mind and an attitude or commitment of pursuing a secure financial future.

With that commitment and mindset, financial stability starts now.

Conclusion

Being financially stable offers a variety of benefits to the individual who pursues that goal.

In addition to the peace of mind in knowing that an individual can weather the financial storms of life that may occur and help them in the present situation as well as planning for the future.

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