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?

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.

Consistency is the key to unlocking life-changing financial habits. Those of us who dream of saving more in our sleep can’t imagine not putting money aside for an emergency. For others, it’s a struggle for a number of reasons:

• They never learned from their parents how to manage money.
• They don’t have enough income to cover their major expenses.
• They are taking care of other members of their family and that doesn’t leave room for them to save.
• They care too much about what people think, so they overspend to impress.
• They don’t see the point of denying what they want in the present to save for the future since tomorrow isn’t promised.

Financial Literacy

The ability to understand and effectively use various financial skills, including personal finance management, budgeting, and investing. It is unfortunate that these skills weren’t taught to us in school. I just so happen to have grown up around my family’s business where they all do taxes. These things come naturally to me. If you never learned how to create a budget, learn. It is never too late to learn a new skill.

Here are some books I recommend reading:

• Rich Dad, Poor Dad by Robert Kiyosaki and Sharon Lechter
• The Total Money Makeover by Dave Ramsey
• Transforming Your Relationship With Money by Joseph R. Dominguez, Monique Tilford, and Vicki Robin

Income

It is crucial to review the previous month’s budget to stay consistent with it. You need a solid monthly/weekly routine so you can be the most consistent with your financial wellness. Every month brings new expenses and a different set of priorities on where to spend your money. Checking in with your budget allows you to project any new expenses for the coming month and reallocate your income if necessary.

If your income is too low to cover your expenses then I suggest digging deep and finding a new side hustle or turning a hobby into a job where you can earn some money off of doing something you love. You can really get creative when it comes to increasing income.

Here are a few examples:

• Sell Stuff Online
• Drive people around
• Become a virtual assistant
• Negotiate Salary

Change Your Money Habits

Consistency plays such a huge role when it comes to achieving any type of success. I’m sure you can imagine that consistency is a key factor in the area of your finances too. Your money habits are formed based on how you constantly handle your money from saving to spending. As simple as that sounds, you might not have considered how consistency affects different parts of your life.

With any habits, money habits can also be good or bad, so in order for you to achieve financial freedom you obviously need to be consistent with good money habits. Good money habits have to do with both saving money but also how you spend it. If you’re not consistently saving money then you are probably consistently spending it. It’s the consistency you have with both of those things that will determine your financial success.

Be Rich, Don’t Look Rich

Trying to impress people is pointless. Most people never become wealthy because they waste too much money on buying symbols of success. They are more focused on looking rich instead of becoming rich. Living below your means and investing your extra income is how you build wealth. No matter how much money you make, you must spend less than you earn. Don’t be in a rush to look successful. Don’t fall into the trap of pretending to be rich.

The longer you practice consistency, the more automatic it becomes. You need to build good money habits and ask yourself if you are consistently frugal or consistently careless.

Here are some ways to stay consistent with your finances:

• Automation- Auto payments for bills is a super easy way to achieve consistency in your personal finance life
• Calendar reminders- Setting a simple reminder on your phone’s calendar can help provide consistency in tasks as well
• Budget apps- Utilizing an app for your budget can help you stay consistent with checking your budget monthly

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.

Strive to Thrive

These are my 7 principles to live by in order to make your finances work for you. I follow these on a daily basis and it has brought so much awareness to my finances. I talk about these principles in all of my programs and educate my clients on how to implement these steps into their lives. The results of utilizing these principles is like nothing else and if you put your finances as a priority and manage your monthly system its guaranteed to work for you. This is about discipline and creating a positive money mindset to achieve your ideal lifestyle.

Make a plan, create a budget

This is all about how to make S.M.A.R.T. goals. Specific. Measurable. Assignable. Relevant. Time-based. Create a list of your income so you can see what your actual income is per month on average. Create a list of expenses and put them into categories so you can get an idea of where your money is going. Create a realistic budget based on 3 months worth of your bank statements. You will be able to see your areas of opportunity within your budget and how to refine your needs to meet your projected budget. Every household or individual budget will be unique.

Tackle Debt

Get into a solid money mindset so you can acknowledge what you owe and get it organized so you can start tackling your debt. Examine your bills and see what we can get rid of. Explore all of your options in regards to decreasing your interest rates on debt that you may have. Create a clear plan to eliminate your debt and set a time-based goal to do so. This is where discipline comes in. You have to be strategic with your spending and saving when it comes to paying off debt. Open another savings account to put money to pay off debt specifically so it is out of sight out of mind. Debt is scary and no one wants it but some things are out of your control. If you want to take control back follow these principles.

Increase Income

Increasing income is easy. Your basic hobby can be turned into a thriving business nowadays. It just depends on how much time you have to put into it and how much passion and drive you have to do so. I have many universal strategies to generate more income and I can customize those strategies based on your unique lifestyle. This is an opportunity for you to get creative and come up with different ways to increase your income. You know you and you know what you are capable of. Reach for something out of your comfort zone and don’t take “no” for an answer. Everything is negotiable, even your current salary.

Live Below Your Means

Living below your means doesn’t sound very sexy, I know. Being resourceful is a talent that you should acquire. It will benefit you to try and cut back on certain luxuries if you are in a tight spot money wise. For example, stretching your grocery/eating out budget so that you account for every penny. Cooking at home is definitely cheaper than eating out. I know this because I was eating out close to 5 days a week about a year ago. I didn’t have the energy or want to cook at home. I was LAZY. By the end of the day I was not trying to cook dinner AND clean up the mess so Doordash sounded great every night. Until my money was dwindling and my belly was inflating. Frugal living isn’t about being stingy; it’s about being resourceful.

Question Whether You Need It Or Just Want It

I always say, question whether you need it or just want it. This is huge. This is something I have burned into my brain so that whenever I go to purchase something I check in with myself to make sure I am making a good money decision. Print out a bank statement, highlight every expense that was a “want” and calculate the total so you can then set a goal to put that exact amount into your savings accounts the following month. This will show you exactly how much you spend on things you don’t really need so you can then check in with your budget and make adjustments. You are the CEO of your finances and YOU need to make this a priority.

Invest & Save For Retirement

Investing and saving for your future is so important. THIS is something your future self will love you for. You should at least try and save for that future relaxing time. It pains me that society has burned it into our brains that a typical 9-5 job is how life is SUPPOSED to be when you are in charge of your life. If you don’t have the skills to do a job with flexible hours or be self employed, educate yourself. It’s never too late to learn. I personally try and read AT LEAST one book per month just to continue my education. Considering American schools, we didn’t learn too much about personal finance so I am constantly trying to grow my knowledge so I can be the best at what I do and serve with excellence. Look into stocks, craft a solid plan to start saving towards an emergency fund, and think about 401(k) options and retirement plans. If you need more guidance on this topic reach out.

Journal About Your Spending

This topic is one of my favorites for sure for the simple fact that it gets people out of their comfort zone. Journaling about your spending and how it makes you feel will open your eyes to emotions you never knew you had. This will help you check in with your spending habits and see what your spending triggers are. Some people can’t control their spending because it makes them feel better to do an impulse buy so they can suppress their feelings in another area of their life. This is where I want you to put everything out on the table and get down and dirty with your inner self. I want you to open up about anything and everything you have been avoiding in regards to your finances. Look into how overspending affects mental & physical health, learn how overspending impacts your relationships, find out how journaling alleviates stress & boosts mood, and strategize on priority financial problems. This week provides an opportunity for positive self-talk.

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.

With any budget, you have your categories that label what your spending your money on. Within those categories you’ll be able to see your areas of opportunity. I have an activity that I have all of my clients do at the very beginning of working together. This activity shows my clients how much they are spending just on their WANTS.

You need three months worth of bank statements. You will then highlight all of the “wants” you purchased. Add up all of those “wants.” The total is how much you spent on just things you WANT. This is to check in with yourself.

How much did you spend?

Does spending that money on random stuff you don’t really need make you feel a certain type of way? Would you rather spend it on something more responsible?

Are you in debt? Could you have paid off some debt with the amount you spent on “wants?”

Do you have short term or long term goals?

Do you have a retirement fund?

Do you like having “things” instead of going on trips for an experience seeing the world?

These questions are to help you see the difference between wants vs needs. Needs should be a priority and if they aren’t you need more discipline in your life. Money management is a mindset. If you are not in the proper money mindset, you can kiss all your extra money goodbye. Which ever type of person you are, whether you’re a money hoarder or an emotional spender, you need to have a balance with your finances. You can’t keep all the money in an account somewhere untouched and expect to have it grow or make you less stressed. You also can’t go around making it rain either. Balance, discipline, and consistency is key in financial wellness.

If you are in need of some financial advice check out my Taxes, Bookkeeping & Financial Wellness Facebook Group!

Baby Step #1: Save $1,000 for Unplanned Expenses

I love this step. I always tell my clients to AT LEAST have $1,000 in their savings for emergencies. You SHOULD have 3-6 months worth of bill money saved as well to be very secure in your financial wellness. I personally, have a years worth of bill money saved just in case because you never know what could happen. I do not like being caught off guard. Having this money set aside gives me a sense of security and freedom.

Baby Step # 2: Pay Off All Debt Except for the House

This makes so much sense. I am very proud of my finances and even I am still in debt. There is good debt and there is bad debt. Having a mortgage is good debt. Especially if you are making those payments on time. Now, credit card debt is bad debt. This is something you should pay off before making any major money decisions. I would recommend reaching out to the company you have the credit with and negotiating a lower interest rate. Also, student loans and/or personal loans are debts you should work towards paying off before you make major money decisions. Lets say you wanted to start trying to buy a home, you need to pay off the debt to increase your credit score therefore having a better chance at a larger loan. It will also lessen your debt to income ratio. You can claim student loan interest on taxes. Paying off debt is something everyone should do as soon as possible.

Baby Step #3: Save 3-6 Months Worth of Expenses

This! I love this! As mentioned in Baby Step #1, I have a years worth of bill money saved for no other reason than my own personal standard. It is something everyone should do. Maybe not a years worth but definitely 3-6 months worth. This is always a goal for my clients because typically when they come to me they didn’t even think about having an emergency savings so adding this into the mix is mind blowing. This is a game changer for your stress. Imagine having this money saved so if in the case something comes up and you cant work for 3 months, you’ll be covered. That sense of security is what helps me stay on tops of my finances. I want to always feel like I am secure.

Baby Step #4: Invest 15% of Your Household Income

Investing is so crucial to your future life. Lets say you bring in $3,000 per month, you would need to put $450 into your investments. I know, $450 can sound like a lot right now in these pandemic times but it’s realistically the best thing you could do for yourself even though the market is bearish currently. It will come back into a bull market. Your future self will love you come retirement time. that $450 will add up and grow. When you invest you have to make smart money decisions, and also come to terms with the fact that your money might be lost at one point or another. In the end if you gain money you will be happy and if you lose money you will be wise.

Baby Step #5: Save for Your Children’s College Fund

According to data reported to U.S. News, in an annual survey last year, the average tuition for the 2019-2020 school year ranged from $41,426 (for private colleges) to $11,260 (for state colleges). That’s the average tuition per year. And unless something changes in how people pay for education, college costs in the future are going to be even worse. Here are some ways you can start saving for them now:

• Open a 529 Plan
  • They are savings plans, usually sponsored by state governments, that encourage saving for future education costs. They often are tax-friendly, in the sense that many states will let you deduct your contributions from your state income tax – and when you withdraw the money for college, the money won’t be taxed. You can put money into your own state’s 529 – or any other state’s plan. So if you live in Idaho but like Indiana’s plan better, go for it.
• Put Money Into Eligible Savings Bonds
  • Some of the advantages of putting money into savings bonds is that they’re guaranteed by the government and extremely low to no risk. On the downside, the interest you’ll earn is pretty low. Right now, individual Series EE savings bonds are earning an annual fixed rate of 0.10%.
• Try a Coverdell Education Savings Account
  • This is a tax-deferred trust account that can be used to pay for elementary, secondary and higher education expenses – room and board is permitted. Earnings accumulate tax free, and distributions are free of income taxes as long as the funds are used for educational purposes.
• Start a Roth IRA
  • A Roth IRA is an excellent vehicle for many taxpayers to invest after-tax dollars while shielding earnings and future growth from taxes forever, as long as appropriate distributions are made. As with any investment, you want to look at the pros and cons carefully – for instance, other relatives can contribute to a 529 but not a Roth IRA. If you have one, you’ll obviously want to discuss this with your financial advisor. With a Roth IRA, should a child decide not to attend college, the parents already have those funds invested for their retirement.
• Put Money Into a Custodial Account
  • In other words, savings accounts called UGMAs and UTMAs (Uniform Gift to Minors Act and Uniform Transfers to Minors Act). They’re both virtually the same thing but UTMAs can hold assets beyond cash, stocks, mutual funds and so on, like a UGMA – but also real estate. There’s no limit in how much money you can put into a UGMA or UTMA, but this is best with a child whom you believe is responsible. Your child will legally be able to use the money in the account – for college or anything else – when they turn 18.
• Invest in Mutual Funds
  • There’s no limit on what you can invest, and of course, you don’t have to use the money for college. But what you earn will be subject to annual income taxes, capital gains will be taxed when shares are sold and the mutual fund’s assets can reduce financial aid eligibility.
• Take Out a Permanent Life Insurance Policy
  • A permanent life insurance policy is a conventional life insurance policy, but some of the money from your premium goes into the death benefit, and some of the money goes into a tax-deferred savings account. One of the pluses of doing this is that the money you save can be accessed at any time for any reason, so it is not limited to college expenses. It provides additional benefits such as a death benefit, and other living benefits, and there is no adverse impact if it is not used for education expenses. There are upfront and recurring fees that might make you think twice before doing this.
• Take Out a Home Equity Loan
  • Of course, you probably weren’t intending to use your home equity to pay for your kid’s college – and with a loan, you’ll have to pay that back. So as a college fund for kids strategy goes, it’s not really the best approach – if you still have years in which you could be saving money for future education costs. But if you haven’t saved enough and are looking for a way to pay for tuition, not to mention room and board, it may work out well. But that’s why you want to start early – so you don’t have to take out as many loans – and as with any investment but especially with college savings plans, it’s always best to begin putting aside money as soon as you can. You always want to try to start your investments yesterday as opposed to tomorrow.

Baby Step #6: Pay Off Your Home Early

Remember this is good debt? Paying it off early doesn’t hurt though. It will boost your credit score when you make more than the minimum payment on any debt and this is included. Even if you pay $100 more than required it will keep you on the right track to paying your home off earlier than expected. Once you have your home paid off you can put those funds into savings or retirement and get you closer to that goal. Basically, eliminate the monthly amount going toward your mortgage, freeing up cash flow that can be useful, especially during retirement. Save money on interest, potentially thousands of dollars. Receive a predictable rate of return, equal to the interest rate on the debt you’re paying down.

Baby Step #7: Build Wealth & Give

Generous People Are More Prosperous. There is a common misconception that in order to get wealthy you have to be stingy, and not be very giving. Giving to others makes you less selfish, and less selfish people have more of a tendency to do better in both relationships and in wealth building. Building wealth is the process of generating and maintaining long-term income through multiple sources. This includes your savings and any assets that generate income, such as your investments.

1. Stay away from debt.
2. Make a zero-based budget each month. (every dollar has a job)
3. Save money.
4. Live on less than you make.
5. Be a giver.