The dream is financial stability, right? Never having to worry about the bills coming, not having to wait for paychecks to afford the things we want… it’s the ideal world! Somehow, some people are able to achieve this way of life while others spend most of their lives wishing, but never accomplishing.
There are many factors that go into this entire process, of course, but Everything Finance helped us notice six common traits of financially stable people.
1. They Refrain from Impulse Buying
Financially stable people always think before they buy. We are so trained to want the new and fresh products, but do we really need them?
As Everything Finance points out, it’s important to know that it’s possible to be an impulse buyer without being a shopaholic. Maybe you’re not addicted to shopping, but you do have bad shopping judgment. Financially stable people tend to take serious caution with spending money and rarely purchase items impulsively when they don’t necessarily need it.
2. They Take Calculated Risks
“You might consider the word risk to be at the opposite end of the spectrum from stability. In a way, this is true, but a financially stable person understands the difference between unnecessary risk and calculated risk.”
Everything Finance acknowledges that for financially stable people, they know the clear difference between unnecessary and calculated risks. A financially stable person does take risks, but after serious consideration. Impulse buying and impulse risk-taking are big no-nos if you’re trying to be smart with your money. Many people take this risk with stocks, without being educated on the process. If you’re investing in stocks, do your research and make sure you know what you’re doing.
3. They Know That Debt is Not an Option
Everything Finance acknowledges that unlike other kinds of debt, student debt is almost inevitable. The idea is that we build up student debt, then graduate, and earn a career that can pay it off; however, that’s not always the case. Everyone experiences this kind of debt, whether you’re financially stable or not.
What a financially stable person won’t do is build up credit card debt. Many people think they can easily get a credit card, use it, and pay it off; but off times, it becomes overused and debt builds up, ultimately harming your future and your credit score. To make sure you’re on the right path of financial stability, credit card debt should absolutely never be an option for your life.
4. They Understand the Importance of Budgeting
You could be bringing in an amazing paycheck each month, but it means nothing if you don’t know how to budget. Every situation is different, however the idea of budgeting is always the same: you need to understand how much is coming in vs. where it’s going out. See where you are losing most of your money, and see how you can possibly save that.
For example, making coffee everyday is significantly cheaper than buying your coffee before work. This small change could make a huge difference in your budget, and financially stable people realize that.
Everything Finance recommends you review your spending habits and determine which adjustments you’d like to see happen. Set limits for yourself, such as $500/month for groceries, $100 for fun activities, etc. Luckily, there are many apps that can help you keep track of these categories.
5. They Always Pay the Bills On Time
It’s as simple as it sounds… financially people always pay their bills on time with no exceptions. Missing a bill can really throw you off and cause your stability to go downhill. Whatever you need to do, always avoid paying late fees.
6. They Know How to Put Money Aside
Everything Finance points out that there is a difference between the skill of budgeting and the skill of saving. You could do perfect budgeting, but still at the end of the month, have no money put aside for your future.
For financially stable people, it’s a crucial part of their process to put aside some money each month. Even if it’s only a little bit, it makes a difference for your future.
Although many people save for a specific event, financially stable people will save for retirement. If you’re not making retirement savings a regular part of your finances, you should start now.
Financial stability doesn’t come overnight, but practice makes perfect. If you can practice these six habits and make them your own, you’re on the right path to financial stability. Huge thanks to Everything Finance for breaking down these six traits, but we’d also like to add another option for those looking to take their finances a step further…
7. The Infinite Banking Concept
The Infinite Banking Concept is a banking method that not many people learn about, but it’s a powerful and modern way to take full control of your financial future by creating your OWN banking system. Here at Up Planning Edge, we help people everyday open their eyes to how simple it really is to save and multiply their wealth. Interested in learning more? Check out our free resources and contact us at https://upplanningedge.com/.