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In decades past, the concept of financial stability and mobility referred to "keeping up with the Joneses" and having the same things your neighbors had.
Today, the concept of being financially stable is much different than in prior generations. In fact, the rat race to get richer than your neighbors isn't usually at top of mind for most people.
If you want to achieve and maintain a truly solid financial base, read on to learn more so you can become financially confident and sound.
The U.S. Financial Diaries performed a survey that asked people what was more important: financial stability or moving up the income ladder. A jaw-dropping 77% of participants said that stability was a priority over increasing incomes or promotions. However, getting a handle on the exact amount of income a household brings in can present a challenge.
Every household needs a budget, but that can be difficult if you have a hard time tracking your income. Today's modern workers may do more than just go to their nine-to-five jobs each day. Freelance work and the gig economy is booming, which can make incomes more sporadic.
If you really want to be financially stable, you'll first need to explore what your income is and how you can manage it in an effective way. Start by tracking what you make every week and every month and track it on a spreadsheet or other program. You can also use an automated net worth tracker to keep track of your entire financial picture over time.
Even if your income fluctuates, it's a good idea to at least start with an average. This average number will guide you when it comes to spending and saving so you can start to make wise decisions about where the money you earn is going.
Low-income homes may have people who work multiple jobs, and they may also receive money through local and state governmental assistance. Others might have a part-time job with hours that vary each week. Taking the average amount that your household makes over the span of a few months will serve as a guide to help you draft a budget you can work with.
If you don't know your actual income, it can be almost impossible to stay on track. This crucial step is the first movement toward being financially stable.
When your income and your expenses are never the same, it can cause some serious stress. In fact, feeling worried about your financial situation can take a serious toll on your confidence and your mental health.
Worrying about how to pay that next bill can create a sense of panic and constant duress. When you're financially stable, you can start to focus your attention on other things that matter like family and home.
Even if becoming completely debt-free seems out of reach, there are some things you can do now to become more proactive about your financial health. When you take these small steps, it becomes much easier to reach your goals at a faster rate.
When you actually do achieve financial stability, you'll notice your stress levels start to dop. Your confidence will increase and you'll be free to enjoy things more openly without worrying about money and costs.
So, how do you actually get there and what can you do to reach your goals? Let's dive into some suggestions to help move you closer toward being completely financially sound.
Once you understand what financial stability is and you have a better handle on your income amounts, it's time to start setting some goals. The idea of being financially stable might be different from one person to the next, and that's perfectly OK. The purpose of becoming stable is to give you and your family peace of mind.
Start your process by setting some reasonable goals like paying off a major credit card, saving for a downpayment on a home, or setting up a savings account. These achievable goals will make it much easier to stay focused since you'll have a prize to go after.
Avoid comparing yourself to others when you work toward financial stability. Not everyone comes from the same place, has the same job, or has the same bills as you do.
The saying "comparison is the thief of joy" also applies to finances! Do your best to worry only about your own situation so you can start putting in the work required to meet your goals. This is a very personal journey, so don't allow others and what they do with their own finances to stand in your way.
One of the most crucial parts of real financial stability is having awareness about the money you spend. Whether it's your monthly Netflix subscription, that gym membership you never use, or weekly trips to Starbucks, overspending can lead to financial distress.
Sit down and make a comprehensive list of your monthly bills including things like movie services and other recurring charges. You should also be honest with yourself and mark down what you spend on fast food, coffee, or happy hour, too.
Once you have a clear picture of where your money goes, it can be much easier to know where to cut. Mark the items on your list that you can cut back or on completely eliminate. Think of it as more money to go towards reaching your financial goals.
A true examination of the money you spend can be an eye-opening thing. It's also a great way to start looking at money differently and thinking about spending it on the things you need versus the things you want.
After you decide where you can cut spending, do it! Log into accounts and cancel them, start packing your lunches, or make your own coffee each morning to help you save money on the things you don't need.
The term "investing" can sound intimidating, but the truth is that anyone can invest their money no matter how much they earn. You can start by taking the money you've saved by cutting back on spending and putting it into a high-yield savings account.
A savings account is a great way to stash money and put it aside for a rainy day. Many Americans don't have an emergency fund but everyone needs one just in case you face unexpected expenses.
Car breakdowns, a job layoff, or even a broke down car can cause serious financial stress if you're not prepared. Take advantage of today's high-interest rates and set up a savings account that includes automatic monthly deposits. When you deposit your money automatically, you won't even miss it and it's much easier to help your account grow without having to remember to add to it.
If you don't have one already, talk to your employer about starting a 401(k) if they offer it. This simple account will give you savings toward your future when you're ready for retirement.
Many employers will "match" the amount you put into this account to a certain percentage. Another bonus is that 401(k) contributions are tax-free which means your tax withholdings could be lower each paycheck.
Whether you start a high-yield savings account or start squirreling away for retirement, both of these steps are crucial to being truly financially stable. Money saved will give you peace of mind in case you ever need it for an emergency. Having cash ready for retirement is a great way to give yourself a nest egg for the future.
Whether it's student loans or car payments, debt can put a huge damper on your plans towards financial stability. Thankfully, there are lots of ways you can tackle your debt and get it knocked out faster.
The first thing you should do is stop using all of your credit cards. Cut them up, put them in water in the freezer, or give them to a trusted family member. The main problem that many consumers have is that they pay only their monthly minimums, yet continue to rack up credit card spending.
In order to whittle down your debt, you'll need to stop the bleeding of spending first. Next, make a list of all your cards in order from the highest balance to the lowest one. You can start paying them down using something called the snowball method.
The snowball method means that you'll put most of your money toward the card with the lowest balance, and pay only the minimum on the rest of your cards. Once that low balance card is paid off, you'll repeat the process with the next lowest balance card, and so on.
The idea behind the snowball method of repayment is to give you hope and a light at the end of the tunnel that your credit cards will be repaid. Put any extra money you make towards the card to help pay it off faster.
For those who are coping with the burden of student debt, talk to your lender about some repayment options. You might be able to defer your payments or get lower monthly payments based on your income.
No matter what method you choose, paying off your debt is really one of the most important parts of being financially stable. If you always owe someone money, how can you ever be financially free?
The art of negotiation can be extremely beneficial in many ways, and it can also help you in terms of becoming more financially stable. Whether it's your utility bills, your smartphone service, or your cable company, there are ways you can negotiate to get your rates or payments lower.
There are even services that will help you eliminate bank fees or have fees that have already been paid refunded. Take advantage of these services since they're designed to help you save money and lower the cost of fees to help you do more with your money.
Most companies automatically bill you or charge you fees directly from their system. When you talk to a real person, however, you might be surprised at what you can accomplish.
Call every single provider you use and ask them about lowering their rates or cutting out fees. You might be surprised at what you can do when you make a quick phone call and simply ask. One tactic that can help you negotiate is to tell some services that you might switch to a competitor if they don't lower their rates.
With a few acts of negotiation, you could save yourself quite a bit of money each month. Don't be afraid to ask your credit card providers for lower rates, too. Sometimes they will offer you new introductory rates just to keep your business.
If you're not a fan of negotiating things yourself, look for online services that will do it for you. They can use their intel to automatically find fees and start the negotiation process on your behalf.
You don't have to be a millionaire or have the nicest house on the block to be considered financially stable. Start by identifying your income and spending, and create a goal so you have a clear path and plan of attack.
Set up a savings or retirement account to give you peace of mind for the future. Work on your debts and find out ways you can save money that can be redirected toward more important things so you can be financially sound.
If you want to learn more about how to get your hard-earned money back so you can be financially stable, visit our website or click here to learn more about our services today!
Harvest helps increase the net worth of the 99% through artificial intelligence and financial automation. To date, Harvest has refunded over $2M in bank fees and interest charges to its members with the ultimate goal of increasing the net worth of everyday Americans by $1 trillion by 2030. Our platform starts with providing immediate relief through bank fee and interest charge refunds, orients a member's financial health with our proprietary PRO Index™, and keeps track of net worth over time aided by our suite of financial tools. Check out our 8-step guide on "How to Build Wealth from Nothing" to get started on increasing your net worth.
Disclaimer: Harvest is not providing financial advice. The content presented does not reflect the view of the Issuing Banks and is presented for general education and informational purposes only. Please consult with a qualified professional for financial advice.