Being secure financially is the mentality you carry when you don’t have to be concerned about your income being substantial enough to pay for all of your expenses. Being financially secure also suggests that you have cash at hand should an emergency happen, such as having to invest in new appliances or having extensive medical bills. When you live a financially secure life, you are able to also live largely stress free and able to focus your time wherever you choose.
While I have a lot left to give in life and a lot more to accomplish financially, I feel financially secure. I’m happy with my retirement investments, my portfolio, and the way my businesses are performing and growing. More importantly, I’m happy with the money I’ve saved for my son’s college tuition.
Today I’ll share my tips for getting to financial security and what I’ve learned in 42 years on Earth.
How to Be Financially Secure
Create a Budget
You need to identify all of your expenses in addition to your income. Small items add up, and you won’t really know where you are spending money until you really put the spending under a microscope. For a true chance at becoming financially independent, create a budget that helps your current necessities such as clothing, food, and living situation, as well as your long term goals which may include paying off any credit card balances and saving money for a vacation or retirement.
Outline Your Long Term Goals
When you create your budget, always pay yourself first, says NerdWallet.
This prioritizes your income so you can save money prior to paying for your every day living expenses.
This strategy is held in high regards by many financial advisors as well as banking institutions like Wells Fargo, who blogged about it on their website as well.
Create an Emergency Cash Stash
Commonly called a “rainy day fund,” it’s always important to have a stash of cash that’s set aside in case of an emergency or situation that you simply didn’t plan. As I write this piece, I look back at my last month’s expenses, and I had to invest in professionals to assist with plumbing, air conditioning, outdoor fountains, roof damage, and appliance repair! It’s not normal to have that many issues at one time, so it definitely nice that I had set aside money for items like this, as it wasn’t cheap. Even putting $20 per week in a jar goes a long way.
Track Your Goals
Goals that aren’t constantly being examined are goals that won’t often be achieved. Set a goal and have times that you check in on your progress and you’ll keep the goal front and center. In 2011, I wanted to move into a new community in my home town of Weston, Florida. I literally put a photo of the home I wanted on the bottom of my Apple monitor and changed all my passwords to the community name that I wanted to move into. These daily reminders kept the goal front and center, and low and behold, in 2013, I accomplished my goal because I was laser focused and had my sights set on it.
When it comes to saving money, it’s easy to forget that you went out to dinner many more times than you should have, unless of course you track your spending. CNBC has a list of the best tracker apps to track your spending so you can see where you are spending too much money. This is something you should invest in and spend time analyzing if you have a hard time saving money.
About Edwin Cannon
Edwin Cannon has spent his entire career in the financial industry and specializes in alternative investments and surviving marketing turbulence. He started My Retirement Paycheck to help educate consumers about retirement investment options that aren't typically introduced by advisors.