Stability is Everything

Real Goals: Being financially, mentally, academically, physically, spiritually, and emotionally stable.

Stability is everything.

Being it emotional or physical. You need a solid ground to build anything on. I tell my clients all the time that they need a solid foundation to build on and in financial terms that would be your budget. Your budget is that solid map that tells you what direction to go in. I fully believe that I am more stable in all areas of my life because I am so stable in my finances. Money connects to everything whether we like it or not. It is on the strength of observation and reflection that one finds a way. So we must dig and delve unceasingly into our own selves.

There are so many emotions around money that turn into blocks. Sometimes people don’t even realize that they are subconsciously blocking themselves from wealth. It is a mindset for sure. Diving into those blocks and negative feelings around money will only help you break through those barriers and into your new life. Stability in finances requires Balance, Consistency and Discipline which I say ALL THE TIME. When stability becomes a habit, maturity and clarity follow. Strength and growth come only through continuous effort and struggle. The struggle is real when you are trying to stay disciplined and stick with your budget. I get it.

Stability is necessary for your future economic success. Finances are not stable by any means but you have the upper hand when you are in control of your finances. You want to make your money work for you. Investing is a great tool but way less stable than your average 9-5pm job. Investing is about trends and sadly politics/media but once you figure that out its so easy. I used to think there were major calculations that I had to do in order to figure out my best investing opportunity. WRONG. You just have to know the trends and current events plus be less attached to your money. Investing requires some gambling and you have to be OKAY with that.

Stability Within Your Finances 

It is almost year-end and you tend to reflect on how much you have been able to achieve in regards to your previously-set financial goals. Are you satisfied with the current state of your finances? 

Imagine a world where you don’t have to worry about money to live the kind of life you have always craved for. You have enough to enjoy that vacation, buy a new home, pay your bills consistently and on time, and live comfortably at retirement. Of course, these are possible, however, only with financial stability.

Financial stability is not only possible when you are stupendously rich. In fact, it is not measured by the amount of money you have. Rather, it is all about being confident that your everyday finances are enough to help you reach your financial goals involving zero-debt, savings, and insurance. Only individuals with stability within their finances can cover their basic needs as well as enjoy a comfortable lifestyle.

Achieving stability with your finances is, of course, possible, even in this ever-changing world. It isn’t rocket science. However, it is not as easy as being portrayed. You need to develop good financial habits including planning, organizing, commitment, discipline, and resilience. Financial stability leads to peace of mind, happiness, and long-term satisfaction.

How Do You Achieve Financial Stability?

Man meditating on abstract flying dollar banknote in sky

On the path to financial stability, accepting the addictions that often cause financial instability is a good way to start. These addictions include overspending or impulse spending, gambling, materialism, and paying bills late. With these taken care of, you are on track to making a good headway with your finances. 

It is important to note that there are no shortcuts to achieving financial stability. The steps involved require time, effort, and consistency. The following actions will help you achieve stability within your finances.

1. Create a Financial Plan

Every decision, especially involving finances, should be hinged on a plan. Otherwise, you tend to make the wrong financial decisions. A financial plan helps you gain control over your spending. Usually, a financial plan considers your income, spending, savings, debt, and insurance. In other words, a financial plan gives you an idea about what you earn as against what you owe, thus serving as a blueprint to help you develop a financial budget. 

2. Create a Financial Budget

Once you have good knowledge about your self-worth, then you need a personal budget to help you have absolute control over your spending. The way you spend has a great impact on other financial decisions you make. A budget is organized based on cash inflow (income) and cash outflow (expenses). You may also want to break down your expenses into needs and wants

Definitely, there are some basic expenses or fixed expenses you cannot avoid every month. Some of them include food, rent, and water or electricity bills. Others, such as cable subscriptions, can come under not-too-important bills or variable expenses, especially if your income cannot conveniently cater for it.

A financial budget, when you stick to it, helps you to prioritize spending and saving, reduce or eliminate expenses, spend wisely, and make wise financial decisions that can help you achieve financial stability. Nevertheless, a budget must be flexible to allow for modifications in case of unforeseen circumstances.

3. Control Your Impulse Spending

This is apparently a major problem that is common with almost everyone. Money has a way of controlling us so much that we get easily carried away when we have some funds in our wallet. We always want to show we can afford certain things. Impulse spending, especially on such activities as eating out and extensive shopping, drains our finances, thus resulting in financial instability. To avoid this, it is important to control and monitor our impulse spending. Have a second thought before deciding to make any purchase.

4. Spend and Live Frugally

One wrong financial decision is to live above one’s income. The result is often disastrous. Before making the decision to make any purchase or initiate any spending, you may have to ask yourself this question: How easy can I get back each dollar I spend? If you are able to think deeply about this, then you will be careful with your spending.

Do you need a new home or car now? Is that vacation important now or you can still have it some other time? Living or spending frugally doesn’t imply that you don’t want to enjoy the comfort life has got to offer. However, it helps you to be disciplined as well as identify spending areas that are not necessary, at least, at the moment.

5. Pay Off Your Debt On Time

If you have some debts to settle, it might be necessary for you to develop a debt payment plan. List out your debts (personal loans, credit cards, etc.) and organize them in either ascending or descending order. In your budget, make allocations for debt settlement, even if you have to deny yourself of certain benefits. Remember, late payment of debts can lead to increased interests, and this means more debts.

Once this process continues, you will be surprised at how “easy” it is to get out of debt. If you have credit card debt, you may have to consider using cash to make purchases. This prevents you from spending more than you have. Debt elimination process often takes a long time. However, it is a rewarding process. When you are out of debt, you will be able to make other financial decisions.

6. Create an Emergency Fund

Who ever thought they would get sick at a time they are down financially? Or get involved in an accident that will necessitate treatment? The reality is that life comes with unexpected occurrences that will require your attention. How do you factor this in your budget when you barely have enough money after your expenses?

Your best bet is to create an emergency fund. Emergencies could involve a major car repair or having to take an unplanned trip. An emergency fund not only serves as a backup plan, but it also helps you to navigate through a tough time with little or no financial stress.

7. Make Plans for Retirement

You are 25 and you feel you still have a whopping 35 years before you attain retirement. You will be surprised at how fast time flies. Remember that your salary will stop someday, as a salary earner. There is no better time to start saving or investing for your retirement than now. Otherwise, you may be jeopardizing your future with uncontrolled spending in the present. Little money snowballs into a large amount in no time.

Check if your company has a 401(k) plan for its employees. The plan becomes more necessary if your employer will match some of or all your contributions to your company retirement plan. You can also consider a Roth IRA.

Key Takeaway

The actions discussed above are the right steps towards achieving stability within your finances. You should have started yesterday. However, another opportunity is NOW. Remember, you shouldn’t get too focused on saving and investing that you forget to enjoy life. Sure, it costs money too. However, it also contributes to a healthy and happy life. You may only have to consider cheap options, such as going for a show, having a massage once in a while, or inviting a few friends for a game night.

Free Gift

Check out the FREE video series on my 3 Keys to Unlocking Your Financial Freedom! This video series touches on Budgets, Tackling Debt, and Ways to Increase Income TODAY! I created this series for those of you who have been hit hard by COVID-19. I want you to know there is nothing you can’t accomplish and creating a plan of action is always a great starting point.

Debt: 7 Habits to Break

Habits That Put you in Debt

If people had the opportunity to change something about their lives, a lot of them would be swift to correct mistakes that denied them financial freedom, especially debt. Unless you’ve ever been in debt, you wouldn’t be able to relate with the stress and emotional trauma that often accompany it. Being in debt requires you to model your life around it. You may even have to give up some financial goals to keep up with your monthly (re)payments. 

Debt doesn’t just happen; it is often a result of certain spending habits and making poor money choices that have accumulated over some months or even years. Though some people get into debt with no fault traceable to them, a vast majority of those in debt dug their own debt hole. Most of these debt-leading habits often come in the guise of serving as smart financial moves, and a lot of people fall prey to it.

The following habits are capable of putting you in debt if you keep on with them:

Lack of Financial Budget

A budget gives you control over your spending in relation to your income. It helps you to set spending limits while also working within the plan. Without a financial budget, you tend to get into impulse spending – that is, spending uncontrollably, especially when you are excited, angry, or bored. When this happens, you will overspend and may end up knee-deep in debt. 

To break this habit, create a budget that shows your monthly income as well as fixed monthly expenses. When you subtract your monthly expenses from your monthly income, you know what you have left to spend on food, transportation, entertainment, and other expenses.

Paying Your Bills Late

Though it can happen to anyone, late payment of bills isn’t a good habit. When you pay your bills late, it leads to increased interest charges, thus hitting your credit score hard. Make it a habit to pay your bills on time.

If you are the type of person that procrastinates with this kind of task – or even forgets it – you may have to consider enrolling in auto-pay. At least, it will help you stay organized while also saving you the need for late fees and high-interest charges. Your finances should be organized in a way that prevents you from missing your bills.

Eating Out All The Time

Yes, you may run out of time to cook sometimes, and picking up food from or eating at a restaurant becomes the next option, especially after a hectic workday. That’s acceptable! However, if you are fond of visiting the restaurant and grocery stores, it may take a tole on your pocketbook. The situation becomes worse if you place the restaurant meal on a credit card. 

Dining out for lunch, especially with friends or coworkers, is a sociable event. However, doing this all the time can cause you to live beyond your means. Remember you will also have to spend additional money on tips if you order in a sit-down restaurant.

Lack of Emergency Fund

Life is full of unexpected occurrences which usually come at various costs. A number of surveys indicate that a significant number of Americans live paycheck to paycheck each month. With that being said, when unplanned expenses arise, most people will have to borrow money to meet the obligation. Emergency situations that may warrant unplanned expenses include health or medical issues, accidents, etc. The inability to meet up with these expenses portends the beginning of a vicious cycle of debts.

To avoid this, set up an emergency account which you fund with a certain amount (Whatever you can or makes sense within your budget) from your paychecks every month. You will be surprised at how fast little money adds up. This will help to cushion any financial pressure that may arise as a result of emergencies. You may also have to resist every urge to dip your hands into this fund unless it is of huge necessity.

Spending Based on Speculation

Some people often spend money based on the expectation of finding a way to get more money in the future, probably in the form of a promised financial gift. This is a recipe for financial disaster. There is no need to increase your budget or spending based on optimism if your income this month will not increase the next month.  Never factor an expected increase into your budget until it appears in your checking account. A lot of students with this habit graduate with massive student loan debt.

Let your budget be based on reality rather than hope. With this, you may have to continue saving for any item you want to purchase until you can afford it rather than buying it now with the hope of getting “imaginary” money to pay it back in the future.

Using Credit Card Rather Than Cash

How you use credit cards determine the benefits you will get from them. Rather than use credit cards for ordinary purchases, such as groceries, gas, or clothes, you should embrace the use of cash at hand or the one you have in your checking account. If you are unable to pay your credit card bills in full every month, it is an unwise spending habit to continue using it instead of cash. 

When you have credit cards in your wallet, you tend to fall into the temptation of using them at will, thus making you spend uncontrollably. At least, you wouldn’t be paying it back immediately. To avoid plunging yourself into debt, you may have to determine the amount of credit card you need to prevent you from exceeding your limit financially. Also, you may want to maximize your reward earnings through reward programs that allow you to earn cash by charging more on your credit card. In this case, only charge what you would have purchased with cash, and be sure to pay off the purchase immediately.

Trying to Keep Up With Others

We are in a society where people are under pressure to purchase material items they can’t afford just to impress those around them. Such people wouldn’t want to miss out on the latest fashion item or technological gadgets. They are always aiming for things they can’t afford. They take pricey trips or visit restaurants that have highly-priced foot items.

While attempting to maintain a certain lifestyle of luxury can cause you stress and anxiety, it further plunges you into debt and more debts. This habit is a bad one. If you find yourself in a circle where you are judged based on what you earn or the kind of luxurious lifestyle you are living, it might be time to break away from the circle. Do only what makes you feel happy. Don’t live your life to impress others.

Key Takeaway

The habits discussed above are capable of taking you off the path of financial freedom. Remember the goal is to live a life that is free of debts and to have good financial habits, such as creating and sticking with a financial budget, spending based on your earnings, minimizing your visits to restaurants, using cash more than you use credit cards to pay for regular purchases, paying your bills early, and avoiding the urge to live your life to impress others, can help you avoid debt. We want to BE rich, not LOOK rich.

Free Gift

Check out the FREE video series on my 3 Keys to Unlocking Your Financial Freedom! This video series touches on Budgets, Tackling Debt, and Ways to Increase Income TODAY! I created this series for those of you who have been hit hard by COVID-19. I want you to know there is nothing you can’t accomplish and creating a plan of action is always a great starting point.

Taxes: 4 Ways to Prepare

I don’t know about you but this year feels like the longest year ever. However, I realized the other day just how quickly tax season is approaching.

During tax season I meet all types of personalities and I really love that about my job. No one has the same situation and every person’s financial circumstances are unique. One thing that I notice each year is that the people who believe they might owe end up filing in April and the ones who think they will receive a refund want to book with me the first week of January. In my opinion, it would be smarter to prepare taxes regardless if you owe or not at the beginning of the year just so you have more time to save money if you do owe. Here are 4 ways to prepare for filing your taxes so you have a better chance of getting them prepared sooner rather than later. 

#1 Get Organized

It is in your best interest to get organized and stay that way all year long so you don’t have to take the time to prepare your documents each tax season in a rush. If all of your documents are scattered throughout your house you will most likely put off getting them prepared. Instead of procrastinating, start by getting organized TODAY. Get all of your receipts together, tally up your mileage, and put everything in a folder specifically for documents you may need for taxes.

#2 Decide Where You Want to File

You have so many options. Do you want to use a free option like TurboTax? Do you think you need a CPA this year? If you started a side hustle over this pandemic you might want to seek the guidance of a professional. Maybe nothing has changed and you don’t have any new streams of income, filing through TurboTax could definitely save you time and money. If you choose to file through TurboTax you will need to make sure you aren’t missing anything before you do so. Nothing is worse than receiving a letter from the IRS stating you missed something and need to file an amendment. 

#3 Set Up a Reminder

After you have gotten everything organized and you have decided where you are going to get your taxes prepared you need to set up a reminder for when you want to file. If you are doing them yourself, I would schedule a few hours depending on the complexity of your situation and knock it out. You will also need to make sure you order any online software you need in order to file.

Don’t Wait!

If you are going with a CPA or Certified Tax Preparer, put a reminder on your phone or calendar to set up your tax appointment. I have a “Tax Appointment Checklist” that I send to my clients right after they book with me so they feel more prepared for their appointment when they come in. Make sure you know exactly what you need to bring so you’re not scrambling around last minute.

#4 Plan Out Your Refund (or Repayment)

If you are receiving a refund, you should be really specific as to where this money is going to go. Most people who are receiving a tax refund blow it and make it rain when they should be putting it towards their goals. This is a great opportunity to pay towards your debt as well.

Don’t Wait!

If you end up owing, hopefully you had them prepared well before April 15th so you have time to gather the funds if you haven’t been saving for this instance. If you waited until April 14th and you owe, I would recommend filing an Installment Agreement with Federal to buy yourself some time and set up a payment arrangement until you can pay in full. There are interest and penalties if you go that route. Bottom line, file sooner rather than later and you won’t be stressing over it.

Filing for taxes can be a breeze if you prepare early enough. Follow the tips above to ensure smooth sailing this upcoming tax season.

Free Gift

Check out the FREE video series on my 3 Keys to Unlocking Your Financial Freedom! This video series touches on Budgets, Tackling Debt, and Ways to Increase Income TODAY! I created this series for those of you who have been hit hard by COVID-19. I want you to know there is nothing you can’t accomplish and creating a plan of action is always a great starting point.