What makes a person secure about something? As security expert Bruce Schneier states, “Security is both a feeling and a reality.” The belief of not having enough is what makes one insecure. It is important to cater to the internal and external reasons for insecurity and then work towards the awareness of releasing yourself from the pattern or mental block
Let us see what gives us external financial security
Steady income. This is the foremost factor that makes one feel secure. If you have a steady income, your lifestyle expenses and the running costs are taken care of
No Debt. The lesser the debt, the lesser the stress. Clearing present debts gives a sense of empowerment. Credit card debts are a strict NO-NO Mortgages increase the pressure and hamper one’s mental health
Insurance. Life, health and so on. Accidents can and do happen, and if one is adequately insured, he is saved from financial ruin. Insurance provides protection to the assets built by your hard earned money
Emergency savings and Investments. This is a safety net for urgent or unforeseen expenses or more serious ones like illness or unemployment
Homeownership. Is probably the biggest financial and emotional decision of a person’s life. It gives a person a sense of pride and security
When all these are achieved one gets a sense of financial security. Now the question is how does one attain these goals With a basic understanding of saving, budgeting and investing, the probability of a solid financial future increase
Act and Earn
Financial security can be increased by financial literacy
Extra income never harmed anyone. Have an additional stream of income apart from the regular, steady source for the unforeseen events that lie ahead
Plan a budget and stick to it
Plan a practical budget. Consider all your expenses including rent, utilities, food, tuition fees, transportation and any other miscellaneous expenses. If after all this you are in the negative, you need to trim your budget. If in the positive, its time to save.
Think before you spend
Like time, spending money also expands to one’s income. Prioritize your expenses. Spend less than you earn. Dispensible expenses can be cut and the same finances used to find the bigger dreams in life. This will need some self-control but will reap high benefits in the future. Live simply today to have a comfortable tomorrow
Saving will help improve net worth. Have a portion of the income automatically go into term deposits or other investments, compulsive savings is the only way one can get into the habit of saving. Spend what is left after saving. Have daily, monthly and annual goals for savings. One very important thing to remember while investing is ‘Do not put all your eggs in the same basket’ so you have a backup that you can bank on. Choose something to save for, a house, your child’s education or your retirement.
Take loans as far as possible only for the most important assets, home, education loan. Pay bills on time, it not only saves you from paying penalties but also gives you a good credit score. Never borrow money to support your lifestyle
Protect your assets
Risk management is an important aspect of protection of assets. Protect yourself, get a health insurance; and life insurance to protect your family
No Procrastination, no waiting for a magic solution. Pull up your socks and start working towards a financially secure future!!