In this day and age, financial stability is frustratingly hard to come by for many people. Many folks have credit card debt and student loans that keep piling up. Indeed, this can feel overwhelming sometimes. Fortunately, you can reach your financial goals with some careful planning and a healthy dose of patience!
Examine Your Mindset Around Money
The first thing to do is improve your relationship with money. You have constantly been told that it is the "root of all evil". This process can be challenging, but it's incredibly important!
You might want to read books such as Rich Dad, Poor Dad, and Think and Grow Rich to shift your mindset.
Build Your Emergency Fund
You'll want to set aside as much as possible for an emergency fund. This money should be enough to cover your living expenses such as food and rent for three to twelve months. It's also always nice to have a financial cushion in case something unexpected occurs. You never know when you'll have to pay for medical bills or be forced to live off of your savings while you're in between jobs.
If you are employed by a company, they might lay you off or fire you. So, although we hope that will never happen, it's essential to be prepared. Hope for the best and expect the worst, as they say — It's better to be safe than sorry.
Pay Off Your Debts to Achieve Financial Stability
After you've established your emergency fund, you'll want to pay off your debts. You'll likely have to do both of these steps at the same time, but we believe it's important to have more than enough to support yourself. So, paying the minimum amount is often enough. That being said, this strategy is a controversial one, so you'll want to inquire about interest rates: If they're extremely high, paying those debts off immediately might be a better option!
Invest in Yourself
There's no greater investment you can make than one in yourself. What will it take for you to feel, look, and be your best in every area of life? Whatever that is, it's worth the money—If you're the best version of yourself, you're more likely to succeed personally and professionally!
Invest in Your Business to Achieve Financial Stability
Once you've invested in yourself, invest in your business if you're self-employed. Do you need a website or business cards? Paying for high-quality marketing services is almost always worth every penny since this tends to attract a lot of customers to your brand!
Invest in Financial Assets
After you've established an emergency fund, invested in yourself, and invested in your business, it's important to make your money work for you. You'll want to max out your retirement accounts if possible. Then, you can put your cash into real estate, stocks, bonds, or even cryptocurrency. Then, watch it grow!
There are numerous other investments you can make, including gold, silver, index funds, wine and various other collectibles, and even Pokemon cards. You'll probably want to poke around the internet and see what your preferences are.
Generally speaking, real estate investments offer the most consistent and reliable monthly payments. Further, the stock market provides an annualized average return rate of 10%, although you can sometimes lose money. Thus, it's important to only use the cash you don't need immediately.
Achieve Financial Stability
It's possible to achieve your financial goals if you are mindful about saving and think about your finances from a long-term perspective. It might take a few years, but you can get there by following the steps above and remaining disciplined with your spending.