Everyone has a unique financial situation, but what does financially stable mean? The truth is that it can mean different things to different people. A millionaire might not think they are financially stable, but a middle-class household might think they are.
Generally speaking, though, financial stability means that you have little debt and have enough money to pay your bills. It also means freedom of worry—a major expense won’t leave you in huge debt or homeless.
Statistics show that 29% of Americans are financially stable. Are you one of them? Use these 21 indicators to see how your finances fare.
Signs of Financial Stability
What does financially stable mean? Here are some signs that you are doing well financially:
- You are happy with your money situation.
- You don’t fight with your spouse about money.
- When you use credit cards, you pay them in full quickly.
- You have an emergency fund.
- Being generous and giving is a part of your financial keys to success.
- Saving money happens often and has become a habit.
- You are thoughtful about every purchase.
- Avoiding and eliminating debt is top priority for you.
- You don’t lose sleep over finances.
- People ask your opinion about finances.
- You can accommodate spending more money on special occasions.
- You can buy things you really want.
- You’re not living paycheck to paycheck.
- You live within your means.
- You pay the bills on time and are never late.
- You don’t overdraw your checking account.
- You would survive if you lost your job.
- You have a retirement plan in place, such as a 401(k).
- You use personal loans strategically to help achieve your financial goals.
- Your net worth grows every year.
- You’re confident about the future.
Why is it Important to Be Financially Secure?
Financial security is beneficial in many ways:
- Better health. Having enough money to pay the bills means less stress. Stress can cause heart disease, stroke, depression, and other ailments. You’re not losing sleep over your finances, which means improved health.
- Better marriages. Money woes are a major cause of divorce. When you and your spouse are on the same page financially, your relationship will thrive.
- More options. Getting control of your finances allows you more freedom. When you have more money, you have more options. You can buy more things and do more in life.
How Do You Get Financial Stability?
You can become financially stable by doing the following:
- Create a budget. A good budget includes income and expenses. Subtract your expenses from your income to see what you have left. If you have very little or even a deficit, it’s a good idea to examine your expenses and see where you can cut back.
- Live frugally. Cut back on your expenses. Only buy things you need and save up every dollar for an emergency fund.
- Use credit cards properly. If you use credit cards, try to pay them in full every month. If you carry a balance, you’re accruing more and more debt in finance charges. If you have a balance, work to pay it off so you can live debt-free.
How Do You Overcome Financial Insecurity?
If you’re not financially secure, you can change your situation. Here are some tips to get you on the path to financial stability.
- Stay positive. Get rid of those negative thoughts. It’s easy to keep saying “I’m broke,” but instead, think positive. Think about how much money you do have and imagine how you can make more.
- Create financial goals. It’s easier to save money when you have goals. What do you want to buy? Think of short-term and long-term goals, such as buying a car or saving up a certain amount of money.
- Get educated. Learn as much as you can about finances. Read books and watch videos from financial professionals. This will give you the knowledge you need to save and invest wisely.
Contact Us Today
Don’t feel great about your current financial situation? You’re not alone. Lift Credit has more helpful tips and tricks on how to better manage your money. Learn how we can help you reach your goals so you can become financially secure.