Do you not wish to live in a world in which there will be no more worries about money? All of us do but unfortunately; most of us cannot claim to have complete control over our financial futures. That is because there are several factors that impact our financial stability just as there are many factors that influence the economic stability of the country. So, how can you define financial stability?
Financial stability does not imply being wealthy; it implies being debt-free, having the power to afford a lifestyle that you hoped for, being able to pay for all your monthly expenses, and then having some extra left over.
Factors Affecting Our Financial Stability:
- One of the biggest factors that tend to interfere with our financial stability is our own forgetfulness and disregard for certain things. When you fail to notice small expenses they eventually pile up to make a huge difference. Such expenses may be for things that are unnecessary, unplanned, and may even lie around useless for long. For instance, you may have completely forgotten that you enrolled for a gym membership that charges you a steep fee each month. This can turn out to be one long bill at the end of the year, something that you are not even prepared for. The only way to avoid such a situation is to monitor your monthly bills and avoid spending money on unnecessary things.
- Not sticking to your monthly budget can be the worst blunder you could make. It is imperative to know your cash-flow every month and categorize the budget into investments, savings, daily needs, etc. This allows you to track your expenses properly and stay away from financial troubles. To be financially stable, you simply need to have a system in place to monitor fund allocations and it does not take a rocket scientist to do the job rightly.
- Staying in debt does not mean you have to lose your sleep over it. You need to understand that it is important to pay off your debts on time and not take any further loans till the situation is brought under control. One of the main reasons why this happens is because we are tempted to use credit cards for purchases when we are short of cash. But this reckless spending makes you lose out more money in the process. Every credit card swipe is tied with interest that keeps accumulating.
- It is often the individual’s own emotions and personality that wreaks havoc in his financial status. If you are by nature a spender, it can be difficult to keep you finances in check. A natural saver will always find it easy to make the right financial choice. On the other hand, if you are a spendthrift, you need to adopt clear financial goals and have a flexible budget in place. Other personality traits like stubbornness, pessimism, and procrastination may also impact one’s finances. When you are pessimistic or upset, you end up making poor choices; if you are in a happy state of mind, chances are that you will not feel like overspending and threatening your finances.
- The society or culture you belong to will always have an impact on your financial status. Likewise, social media influences people’s finances; sites like Instagram and Pinterest showcase the perfect lifestyle, vacation, and home for you. It is only natural to fall for this but it may hurt your financial dreams. So, it is important to stay informed and plan ahead. Only a proper budget and regular monitoring of expenses can help you achieve financial independence.