What comes to mind when you hear “Financial Security”?
I’m certain a lot of thoughts would be going on in your mind about what financial security is, but I have another similar question to ask…
How can anyone truly become financially secure when they barely earn enough and have little to no savings?
Don’t know how? In this article, you’ll learn all you need to know about financial security. Contrary to what many believe, financial security can be attained, and you’ll be learning how soon.
But first, what does it really mean to be financially secure?
What is Financial Security?
Financial security may mean different things to different people. But the central idea is always “peace of mind”.
To make it clearer, financial security refers to the freedom you have with your spending. When you have sufficient money to cover all your financial needs without incurring debts, then you can say you’re financially secure.
Now you might be thinking; “For me to be financially free, I need to have millions stashed”. Frankly speaking, you really don’t! The honest truth is that many people have made millions only to lose it all because they didn’t know how to control their expenses.
But financial security goes beyond just having a huge sum of money, it involves having the capacity and ability to properly manage your finances.
A financially secure person is one who understands what to do, when to do, and how to achieve on their finances. Even when there are bills to pay, you still have control over your financial life. That’s financial security!
In simple words, financial security is “the control you have over your finances”.
Now, how can you achieve this Financial Security?
How can I reach Financial Security?
Financial security can only be achieved with proper planning. It is this financial planning that prepares anyone for both the current and future expenses you’d have to make. It allows you, to a large extent, to spend without having to disrupt your saving plans.
The following things are key in setting you on the right path to financial security;
● Saving Plan
One of the ways to actualize your goal of financial security is to set aside some of your earnings. What this means is to determine a percentage of your earning you’d like to set apart on a regular basis.
This invariably channels you to your financial goal. However, maintaining this new saving culture comes with a lot of discipline. In some cases, it might lead you to adjusting some of the activities in your life.
One sure way to create an effective plan is budgeting. This ensures you do not overspend or have to dig into your savings to save face.
Your savings would (as it should) separate you from your financial expenses. Your savings are what you set out, first, from your earnings before you begin to run all your expenses over a period. If you are aiming to attain financial security, you must create an effective savings plan that allows for emergencies.
● Offsetting Credits
One major reason many people doubt they can ever be financially secure is the debt profile they possess. Another surest way to attain financial security is to offset every form of credit. Credits can be in the form of personal loans, car loans and property loans.
When you fail to offset loans, you are only digging yourself a debt grave. Because, the financing companies you borrow from will continue to charge you for defaulting on your loan. If you fail to even pay within a set time, you might have to forfeit your properties to fulfill your end of the contract.
● Create additional Streams of Income
Building additional streams of income is one way everyone who is looking at attaining financial security should follow.
Financial burdens can sometimes be overpowering and one income source might not adequately meet up with your daily needs.
One way of generating more income is to start with trading apps like Robinhood, invest greatly in rental properties, stocks, etc. Any investment you make should appreciate in value and, overtime, turn out to be a great source of passive income for you.
● Diversify Your Investment
If you have chosen investment as a means to increase your earnings, you should consider diversifying them for security purposes.
This is in line with the popular saying “do not put all your eggs in a basket”. So in a case where an investment goes bad or does not yield the expected income, all your resources would not be lost.
● Seek Financial Advice
For anyone new to the world of savings and investments, it is advisable to seek expert financial advice. This is because there are a lot of fraudulent and non-viable investment schemes out there. Without any experience on how to detect these, you can lose huge sums of money.
An expert advice will prevent you from “learning by experience” and save you time and money. Many times we chose to take the easier and “less expensive” option by not consulting investment experts. But the truth is, when we make wrong investment choices, we end up losing money and in the long run spending more.
● Live Within Your Means
This is where a whole lot of us get it wrong.
For anyone who truly wants to live a financially secure life, you must not spend above what you earn.
Today, a lot of us are pressured into acquiring things we don’t need and taking actions that will fail us.
But, a lifestyle like this will not make you attain financial security; it will only make you bankrupt.
Financial security can be attained by any and everyone who commits to this course. It only requires a certain level of discipline, dedication and commitment. For anyone who wants to be financially secure this write-up points to ways of attaining this ultimate financial goal. All you need is to follow through the process, and you’ll be a better person, financially for this.
The post What Does It Mean To Be Financially Secure? first appeared on Mind My Business.