3 Ways To Create Financial Stability

Here’s a vague term: financial stability. What is that? What does it look like? How do I get there?

Financial stability looks different for every person. It’s not necessarily measurable. It can mean you have a lot in the bank or it can mean you have great persistent habits and you are making real positive change. What would you consider financial stability to be?

Whatever your decision is there are a few cut and dry ways to get there. Here are three key areas to look at when working to improve your financial stability.

Refinance Some of Your Debt

If you have debt it may be a great time to look into refinancing. Interest rates are at record lows right now, which in turn can mean thousands of dollars in savings for you. If you are thinking about refinancing mortgages and private student loans are great areas to look into.

Paying less in interest will mean you have more available cash on hand for tackling other areas of your finances or building up a savings.

Get Your Spending Under Control

Another way to create financial stability is to take a look at your spending and make it more manageable. This essentially means creating a budget.

Living with a budget is not often fun but it could be the difference between living month to month and having a savings to fall back on. Research budgeting and figure out which method would be right for you. You don’t need to do anything fancy - a simple look at your spending habits may be enough to show you where you need to make changes.

There are also some great apps like Mint which can connect to your bank and credit card accounts and do the analysis for you.

Create Or Build Up A Savings

If the COVID pandemic has taught us anything it’s the importance of an emergency fund. Life is inherently unstable and having some cash tucked away can be a lifesaver.

If you don’t have an emergency fund start with a simple goal of $500-$1,000. Once you cross that off keep going. The general rule is to have a few month’s worth of cash on hand in case of emergency: three months is fantastic but more is always better.

You don’t have to deposit huge chunks at a time. Adding $20 every week to a fund will add up to $1,040 in the course of a year. It doesn't have to be painful!

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