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7 Steps to Ensuring Your Financial Stability
Many of us want to achieve financial stability because stress about money affects almost every other area of life, especially relationships. Like many other things, financial stability does not happen overnight. Instead, it’s necessary to make a plan, stick with that plan, and be patient.
Emergencies often occur, and when unexpected things pop up that do not fit into the financial framework, many people turn to installment loans online. While they’re very useful tools, largely because such loans are so easy to acquire, be sure and use them only for emergencies. And, since they have high-interest rates, be sure you can repay them on time.
1. Make a Plan
Almost all noteworthy objectives begin with a plan. Many people plan for long-term goals, such as retirement or sending their children to school. Other times, a plan involves an emergency fund. Most experts agree that most people should have at least three months of living expenses in such a fund.
2. Prepare a Budget
Most expenses are either the same every month, such as rent or insurance payments, or can reasonably be calculated, such as food and transportation. Either way, a budget is usually rather easy to prepare. Sticking with that budget is the hard part. But, implementing the steps below should be a big help.
3. Control Spending
Lack of income is a problem for some families, but in most cases, overspending is the big problem. Start with an assessment of how much you spend on dining out and other entertainment-related expenses. Then, trim them as much as possible. As for necessary spending, like groceries, never use a credit or debit card. Instead, shop with cash, and when the cash is gone, your shopping is complete.
4. Treat Savings Like a Bill
Yes, this method often takes some of the joy out of saving. However, this technique is also excellent for developing a spending habit. If possible, use payroll deduction or direct deposit your paycheck into multiple places. If you never see the money come in, you never miss it when it goes out.
5. Use Credit Responsibly
Sooner or later, almost everyone needs to borrow money, whether it be to get through a financial storm or make a major purchase. When that time comes, a good payment history is an excellent way to get the money you need on terms that you can afford.
6. Splurge Occasionally
People who diet know that a chocolate brownie at the end of the week is often an excellent reward for six days of sacrifice. Do the same thing with your bank account, because just like almost no one can go without borrowing money, almost no one can go without something new for very long.
7. Use All Available Tools
Daily balance alerts are a great source of information because there is peace of mind in knowing that the debit card will work when you present it. However, they only provide a snapshot. To keep track of your financial progress, look at six or nine months of expenses by category. There are a number of apps and programs that fulfill this function. It’s very empowering to measure your progress, and this information also tells you where you need to improve.
Following these steps may not get you to financial security, but it definitely will get you much closer to your goal.
Mark Roberts is a recovering consumer bankruptcy lawyer who’s very familiar with both the positive and negative effects of consumer credit, especially short-term installment loans. He lives in Dallas.