One of the most popular NYR, and indeed one of the most popular conversations via social media at the moment is the wish to become financially stable. Everything costs a pretty penny these days. You can hardly go anywhere or do anything without having to fork out a huge amount of money. The issue with everything costing so much is that it is becoming increasingly more difficult for us to look after our families and give them the best life possible.
Being financially stable means being able to live comfortably and afford a decent lifestyle for you and the ones you love. It is where you have a stable income each month which you are guaranteed, so that you can pay all of your bills and make sure that the family is able to eat and sleep at home. To truly know if you have financial stability or not, you need to be looking at the amount of money you have left at the end of each month and how close you are to having no money left after the essential costs and living costs. You will want to ask yourself a few different questions in order to know if you are financially stable or not.
Do you spend every last penny each month?
For You to be in a safe place when it comes to your money, you will want to always be earning more than you spend each month. If you do not, you will end up going into debt and heading for some serious financial issues.
If you are earning £2000 per month and spending all of that on your bills and food, then you cannot truly say you are in a place of stability. You need to be spending your money on bills, food and other costs, and still having some money left at the end of the month to into a savings account. If you do not currently have this, you may need to look at cutting down on your food bills, taking a look online at different energy providers and working out whether you can really afford that mortgage at all. It is of course nice to be able to have things you like and live in your own house, but if you can barely afford it, it is not worth the risk.
Do you have emergency savings?
The second thing you will want to always have at your disposal is a buffer. Saving a little bit of money at the end of each month or when you get paid can make a huge difference to your financial state. Ideally you will want to build up a fund of six months expenses in savings. This will be there for any time in your life when you struggle with money or have to stay off work due to an illness or injury. You will have that buffer to tie you over for a few months and keep you and the family supported during the time you cannot work.
If you trade outside of work in a platform such as think or swim, you may have some extra savings piled up which can be added to your buffer. If not, take a look at the thinkorswim download and see whether trading is something you want to do to save extra money. If you struggle saving with your regular wage, something like this can be a great help.
3. What salary have you saved for retirement?
A large part of being money conscious is making plans for your ps and your family’s future. When it comes to saving for your retirement you will want to start as young as you can and keep the payments stable throughout your life. You will have the benefit of your employer contributing too which will give you even more money for later in life if you need it.