Bonjour tout le monde!!!! The week is well on it's way and there's a new prompt attached to it , one that speaks volumes so let's get to it.
I stumbled on the prompt of the week titled "strategies for maintaining financial stability" and I won't lie it brought back memories about how I really mismanaged funds at different phases of my life. One that spoke the loudest was about 2022 , a point where I was working and getting a lot of cash but was using the money for anything relevant, it was all for one meaningful expenditure after countless wasteful spendings. This dragged on for months until I eventually lost the job , had made little to no meaningful use of the money and finally went flat broke. After that period I realized I had failed drastically because my financial education was very poor which resulted to my current situation and I had to do better so the same mistake does not repeat itself.
Now after discovering the prompt, I googled the meaning of financial stability, found a lot of definitions but the work of Garry J. Shinasi seemed more appealing. He perceived it as "The ability to facilitate and enhance economic processes, manage risks, and absorb shocks." Moreover, financial stability is considered a continuum: changeable over time and consistent with multiple combinations of the constituent elements of finance. This will serve as the foundation for the entire work.
Financial stability revolves around more than just how much a person has in their bank account. It is the essence and goal of every person struggling for financial independence, a completely achievable objective with the right state of mind, plans and a few practical steps for guidance on your financial journey.
The first step should be understanding where you stand ,Habits, income rate, expenses among other things. This will help ensure that you are able to coordinate your financial affairs while also saving up some part of your incomes and also making crucial decisions that are necessary to achieve your objectives.
Investments are necessary steps towards achieving financial dreams and it's relevance can never be overemphasized. It takes you a step further, allows your money work for you and also paving the path for achieving long term goals. As important as savings are there are times when saving seems like the wrong move to make instead make investments that stands a chance of making returns. This way one is making plans for the future and also an escape from the never ending rat race.
Within the course of making investments, it is also important to properly distinguish between an asset and a liability. Assets are resources owned by an individual that provides economic value and future benefits . Liabilities on the other hand do not provide value rather it hinders financial success. Individuals should invest more on the former rather than the latter, purchase resources, equipments and tools that will necessitate financial growth (e.g land) and that things that will either engulf you in debt or crushed by financial shambles.
And finally Risk management. As you struggle to gain financial stability, you are bound to take risks. However your ability to manage those risks will determine the outcome of every venture as it is an important step that contributes to achieving positive outcomes in drive towards financial potency.
The journey towards financial stability is a path we all must take. While the journey might not be easy, every step shapes the results whether desirable or otherwise.
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STOPYou've stated things clearly. Moving towards financial stability entails assessing oneself, setting goals, staying committed, and learning alongside. It's not a one day affair but with time and discipline, we grow.
Thank you for sharing and stating wonderful points here. I agree these things can help a person's financial life.