Experiencing financial stability is something that many people hope for, but never actually achieve. Feeling secure in the number that appears on your bank statement is much easier said than done. There are many reasons for lack of financial stability, like having a love for expensive designer shoes or being stuck in a dead-end job.
Although there are many factors working against financial stability, there are a few habits that you can adopt to help you get there. Some of these habits you’ve heard before, like to learn how to budget and plan ahead. But don’t be surprised if you learn something new about the common habits of financially stable individuals.
They Refrain From Impulse Shopping
There are plenty of people in the world who suffer from shopping addictions. Just as an alcoholic has a problem with controlling alcohol use or a workaholic works too much, a shopaholic has no control when it comes to spending money. This is fairly common in Western consumer societies.
Westerners have been conditioned to believe that they need the newest iPhone or they need that pair of stylish Nikes, rather than simply wanting those things. It’s completely OK to buy things that we don’t necessarily need. But it’s essential to know the difference between needing and simply wanting.
HuffPost did a recent study on signs of shopping addiction, and they found that nearly 6% of Americans can be characterized as shopaholics. “With retailers ramping up their promotions on TV and even more intensely online,” says HuffPost, “this number is likely to rise. In our society, the phrase ‘shop till you drop’ translates as frivolous and fun, but when spending presents a real problem, the glamor fades.”
There is a very thin line between shopaholicism and impulse shopping. Even an average person occasionally gives in to impulse buying, but that doesn’t mean that person is a shopaholic. The most financially stable individuals, though, take extreme caution in their spending and very rarely give in to their impulses when it comes to spending.
They Take Calculated Risks
You might consider the word risk to be at the opposite end of the spectrum from stability. In a way, this is true, but a financially stable person understands the difference between unnecessary risk and calculated risk. Unnecessary risk can be fun and all, like placing bets at online casinos like these multiple brands or skydiving.
When it comes to remaining financially stable, knowing the difference between unnecessary and calculated is essential. A financially stable person will definitely take risks, but only after thinking long and hard about the situation. Instead of frivolously buying endless amounts of stock without thinking twice, that person will consider the options and weigh the pros and cons. Only after deliberating will a decision be made about what company stocks to invest in.
They Know That Debt Is Not an Option
Before we delve deeper into this habit, it’s important to understand that we are not talking about debt from student loans. Many people experience debt because of the insane cost of education these days. Debt from education is something that is just inevitable, and the ultimate goal is that this debt will go away quickly once you receive your degree.
Sometimes, it takes being in debt from student loans to make the most of your career.
Even the most financially stable individuals experience debt from higher education, but they know that other forms of debt are unacceptable. They know how to eliminate their student debt quickly as well as prevent other forms of debt from happening.
A financially stable person would never get into the situation of owing a credit card company thousands of dollars. They understand that debt has a way of working against them in more ways than one. Even if the debt is happening now, it can have a negative effect for the rest of your life. The emotional effects of debt can be debilitating, but this is nothing compared to what debt can do to your credit score.
They Understand the Importance of Budgeting
Knowing how to budget is the very first step in becoming financially stable. Even if you’re earning an insanely high income and have complete job security, learning how to budget is essential. It’s also important to know that everyone’s budget will be unique, but the practice behind budgeting is always the same.
It’s all about understanding how much money is coming in and determining where it is going out. Once you’ve got a solid grasp on how you’re spending your money, it’s time to establish some rules. So instead of spending $1000 on Starbucks each month, maybe you make coffee at home instead. You allot only $50 per month on treating yourself to delicious lattes at Starbucks.
You’ll go through each of your spending habits and determine the changes you would like to see happen. $500 per month on groceries, $100 for eating out, $100 on entertainment, and so on. The most difficult aspect of budgeting is keeping track of everything, but there are plenty of resources and apps to help you do this.
They Always Pay Bills on Time
There’s no procrastinating when it comes to financial stability. If you have an outstanding bill, pay it on time. Do whatever you can to make an on-time payment for every credit card statement, utility bill, or student loan payment. Even if you have to pay the minimum amount, avoiding late payments is a great way to avoid inflated interest rates or late-payment penalties.
They Know How to Put Money Aside
Just because you know how to budget does not mean you know how to save money. Maybe you’ve set a budget using all of your income and have no intention of saving any money whatsoever. A financially stable individual would never behave this way.
No matter how much money is spent and how much money is saved, there is always something going into the savings account. Generally speaking, financially stable people will save more than they spend. This might take some extreme budgeting, but not always depending on the monthly income.
Some people merely save money to spend it at a later date, but the most financial stability comes from saving for retirement. Young professionals are opening 401Ks to start saving for retirement in their 20s. This might sound a bit outlandish to you, but it is definitely smart to develop a nest egg so that you’ll be sitting pretty later on in life.