10 Steps To Reach Financial Stability

Just about everybody wants to become financially independent – so why do so few people get there?

One of the secrets to attaining financial independence is that it doesn't usually "just happen".

It starts with a detailed plan, and a willingness to commit to that plan.

What Is Financial Stability?

When you are financially stable, you feel confident with your financial situation. You don’t worry about paying your bills because you know you will have the funds. You are debt free, you have money saved for your future goals and you also have enough saved to cover emergencies. Financial stability isn’t about being rich. In fact, it isn’t a number at all. It’s more of a mindset. When you have financial stability, you don’t have to stress about money and you can focus your energy on other parts of your life.

If you follow these 10 steps though, you can reach your financial dreams.

1. Make Savings Automagical

This should be your top priority, especially if you don’t have a solid emergency fund yet. Make it the first bill you pay each payday, by having a set amount automatically transferred from your checking account to your savings (try an online savings account). Don’t even think about this transaction — just make sure it happens, each and every payday.

2. Understand That Your Most Important Investment is Yourself

Before you ever think about investing money in the stock market, you should look to invest in yourself. Invest the time, energy and money to teach yourself the skills you need. This includes college degrees. It also includes other knowledge and skills. Learning things that don’t directly relate to your job can sometimes help you just as much as work-related skills. Employers typically want well-rounded employees who can contribute to a company in multiple ways. They also want someone who shows the drive and ambition to improve themselves.

3. Track Your Spending

Monitor your spending. This can be done occasionally. Perhaps once a month you can write how much you have spent, and see what areas you are running deficient. When this is done one can understand how efficient he is using up his finances.

4. Career-Based Financial Goals

Write down your plan of changing your job and advancing your career. This will help achieve them and get motivated to work on your goals. You need to have a time limit to achieve these goals.

5. Control Your Impulse Spending

The biggest problem for many of us. Impulse spending, on eating out and shopping and online purchases, is a big drain on our finances, the biggest budget breaker for many, and a sure way to be in dire financial straits.

6. Live Below Your Means

Like creating a budget, this is advice that many people have heard. The trouble is that many of us have a hard time following it. We live in a world where we constantly hear about the things that we “should” buy. It’s very easy to spend money on extra things that we don’t need. However, living below your means is key for your long-term financial success. If you regularly spend all of your money, or more money than you make, you can’t expect to grow any savings.

7. Emergency Savings

If you have monthly savings, you will have more to cover emergency needs. You will feel less stressful if you have something in case of worst-case scenarios. You can put your savings in a high-yield account to benefit you as you save.

8. Respond Automatically

Do not procrastinate with your finance. Do not delay in the paying of your bills. By doing this there is no room for debt growth and affords you the opportunity to know what money can be used for personal expenses.

9. Invest for Retirement

When you’re young, it’s hard to think about retirement. Why should you save money for something that’s decades away? Unfortunately, this thinking is why the average American has no retirement savings. If you want to reach financial stability, you also need to plan for the days when you won’t have a salary. This is especially true if you have any plans for retirement. Want to travel after you retire? Want to volunteer or take some local classes? Those are all great things, but you can’t do them without money.

10. Look to grow your net worth

Do whatever you can to improve your net worth, either by reducing your debt, increasing your savings, or increasing your income, or all of the above. Look for new ways to make money, or to get paid more for what you do. Over the course of months, if you calculate your net worth each month, you’ll see it grow. And that feels great.