If there is something that I have come to realise at the early stage of my life is in the aspect of financial stability. Whether we like it or not, everyone of us needs financial stability because it will gives and provide fulfilment to our life. Our society is build around financial stability in a way whereby if you are not financial stable, people will look at you as a failure but when you are financial stable, everyone sees you as a success and want to associate with you.
Financial stability helps you to achieve your daily needs and even helps to achieve your financial goals. But financial stability does not come just like there, there are something's you need to put in place to achieve financial stability because it requires total discipline and determination. It requires you to plan effectively and if you are not able to plan effectively, you will not see financial stability in your life. There are some strategies that I believe we can add or put in place which can help us achieve financial stability.
The first strategy I will mention is budgeting and having a good detailed and rigid financial planning. If you did not have a budget, you will not be able to achieve financial stability because what budget will do is to properly guide you and helps you to know your income and also knows what you spend money on. It helps to make sure that your expenses are streamline towards achieving your goals irrespective of what it may be. You can start budgeting, list out your needed expenses you cannot do without and make sure that you attach a certain portion of your income to it.
The second one is for you to have a savings which many people called the emergency fund. One of the things that we should be aware of at the early stage is the fact that we can not do without unforeseen expenses but there is a way we can properly manage the situations when it comes and one of the ways to manage it is when we have emergency funds. Emergency funds will help to create financial stability in case if there is any emergency financial needs. Instead of running to borrow and many more, you already have funds to tackle it thereby making you remain stable financially.
If there is something I have come to learn that always causes financial instability, it is called debt. In fact if you are not able to properly manage your debt, it can even lead to bankruptcy. You need to manage your debt effectively because if you did not learn how to manage your debt effectively, you will continue to be far from financial stability. One of the ways I believe you can manage your debt is first of call focusing on debt repayment. Make sure you cut down your expenses drastically so that you can clear off every debt you have and so that you can actually be in good and correct shape. It is actually needed. Then when you are able to clear all your debt, make sure you avoid any further debt in the future to sustain your financial stability.
I will like to add this that it is not always safe for you to put all your egg in one basket. You need to Diversify your income streams. The more you have multiple streams of income, the more you are sure of financial stability because you are so certain that whatever comes, you will still be able to keep going financially. Instead of just depending on only one source of income, try to Diversify so that you can have financial security coming in for you. The higher your financial security, the better your financial stability.
Not only that, another strategy I will like to add is in the aspect of making sure you spend wisely. If you continue to spend extravagantly or flamboyant, you will be far from financial stability. Make sure before you spend your income or fund, it is worth it. There is difference between needs and wants. Make sure that you know when to attend to wants and when not to attend to wants. One of the things I learnt at the early stage of my life is the fact that not all what's you can attend to. There are some wants you should let go instead of spending money on it. The earlier we understand this, the better it will be for us financially also.
The last strategy I will like to add to it is in the aspect of you continuing to learn. You need to continually make sure that you increase your financial education. Continue to invest in reading financial books if possible also attend seminars or even attend financial related conferences so that you can increase your level of knowledge about finances. Not only that it will help to build your networking with other financial oriented people also.
I will like to invite @rare-gem, @dearemem and @ernesto6402 to participate in this wonderful initiative.
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