Personal financial stability means possessing the ability to meet your needs today without putting at risk your tomorrow. Or as the World Bank puts it, “the capability to efficiently allocate resources, assess and manage financial risks…” in a way that “dissipates financial imbalances that arise endogenously or as a result of significant adverse and unforeseen events.”
Now that is a mouthful, yet necessary. Sorry.
The point is this: It does not matter how much you earn in a month or year, as you will always have needs (and wants) that you cannot efficaciously meet on the resources presently available to you. And that is where this article comes in.
Realizing personal financial stability
By applying the tenets of personal financial prudence, every person or household can realize the dream of financial stability: pay their bills without fretting, improve one’s financial holdings, build a sizeable estate or whatever it is you want to do with your money.
Financial stability tip #1: Always lead your money
I doubt you will ever find this piece of advice anywhere. At least not written in this very way. Why? Because this statement constitutes the first easy-to-remember money advice I was ever given at home.
The thing is, you go out to work for that salary, wages, profit or whatever it is you are paid (or make) at the end of it all. Afterward, there is this intricate struggle between you and your hard-earned cash on who should lead. Oh yeah, it’s called impulse buying, and online stores do not help much.
And most of us lose that battle: your 19 inch TV works just fine, and you probably should buy something else this month. Unfortunately, you took the wrong turn and passed by an electronics shop showcasing a humongous 42″ TV you can afford, and your credit card is in your wallet. Walk away and you win this battle; walk in and you lose.
In other cases, some of us are paid at the end of the month so we can start paying back all those soft loans we accrued during the month. If you are constantly spending the “money you don’t have”, you are losing this battle to lead.
The problem is that in trying to lead you and your actions, the money you just earned will keep calling on you to buy that 42″ TV. If yours is a devious mind, it might actually suggest a few ways to get by until your next paycheck arrives.
Until you awaken to this struggle with your money and actually start winning it, your dreams of financial stability will likely remain a dream. Oh boy!
Financial stability tip#2: Create multiple income streams
To the unemployed, the romance of having a paycheck every other month brings about the illusion of it being the gateway to their financial stability. To the employed, it raises the ubiquitous question of how to meet ends meet and get to the next paycheck with some change.
This is a real struggle for lots of people. And the solution does not lie in your monthly paycheck, asking for a pay rise, or any other activity that will periodically earn you a little more money. Instead, bolster your income stream with multiple, varied sources.
If a fact, it is easy to understand why and much easier to implement. By having a personal financial advisor, you stand a better chance to find additional ways to earn consistently. And you won’t even have to tweak your established schedule too much.
Whatever you choose to call it does not matter. What’s important is that there is a common longing among all humans to enjoy financial independence and that this independence is attainable if you work for it.
Financial stability tip #3: Dream bigger dreams
Financial independence is the first step toward financial stability. Independence gives you the option to spend a portion of your money with ease. Stability ensures you spend only that portion which you can replace.
For a man raised in a low-income household, it makes sense that you dream of having it all. Yet there are times when you don’t have your way. When you get pulled back down more times than you care to admit. In the grand scheme of things, falling short is okay. Undesirable, painful, definitely frustrating. But okay nonetheless.
It is when you give up, move goalposts or even dream about financial freedom far less that it is shredded. Do not become your own worst nightmare.
Still, it would be criminal for you to settle for that level of insufficiency. A life of always having to balance what to buy today with how much you need for tomorrow. Not being to enjoy your life or give your kids the childhood you always dreamed of. It’s even worse to know, silently, that you never gave them the chance at that life.
The alternative, of course, is to keep pushing. Bulldoze your way through obstacles, or find a workaround that does not take you away from your objectives.
Therefore, every struggle in you encounters on your way to realizing your financial independence should motivate you to seek more. More provisions and a better life for your loved ones. And it all must start by you dreaming bigger dreams and never shying away from them.
Financial stability tip #4: Do better every day
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I hope you do not view financial stability as a privilege. Because it is not. Financial stability is an accomplishment – the result of a combination of several factors underpinned by hard work, astute planning and ruthless seizure of every opportunity which comes your way. Building and having your financial freedom, and financial stability, is a reward for every ounce of the efforts you put in.
Financial stability tip #5: It’s all in your mind
It’s in you, go do it!
First, apologies if you expected a how-to guide on what to do to become financially stable. I’d understand if you were furious right now. Maybe laugh a little (I do that).
But I know having the right mindset and approach gives you options. And the best chance to do something great. Yes, you will encounter a few red tapes, a few obstacles. This article aimed to remind you of what you have achieved before, and how you did it.
And in everything, remember to keep an open mind. And work your nails off.