Once we have a steady, permanent job, we tend to think of our finances as secure. This is a common misconception. If you have debt, mounting bills, or lack of savings to dip into, then you may not be as financially secure as you think. Here are several questions to ask yourself to find out whether you are truly financially secure:
Do You Have a Savings Account?
If the answer is no, then you are in serious financial trouble. You must save at least a dollar each month to secure your future finances. Savings can protect you in case of a financial emergency. For example, you might suddenly need cash to pay for home repairs or pay off an overdue bill. If you plan to go on holiday or buy something indulgent, then you will need these savings. Imagine losing your job suddenly. If you don’t have money saved, you will have to borrow cash to cover daily expenses.
Think about it this way: would you have the cash if you needed to undergo surgery next week? With a savings account, you would at least have some. You can borrow against your savings, thus protecting yourself from dubious loan sharks that charge astounding interest rates. If you are not saving already, then start today.
Do You Know What Stock Trading Is?
Stock trading is a popular way of investing. Technically, anyone can become a stock trader. Stock trading is a great way to build an investment portfolio that you can profit from for years to come. There are excellent options, such as marijuana stocks, that the average income earner can take advantage of. Investing is of course not all about owning stock, but it’s a great place to start. You can start becoming a stock trader without needing massive amounts of capital like a real estate investor does.
Do You Have More Than One Source of Income?
Remember the scenario of losing your job earlier? Let’s get back to that. If you work in the private sector, a sudden layoff is always a possibility. In low-income sectors, layoffs can even be common. So, if you were to lose your job suddenly, what would happen to your income? Do you have a second job you can fall back on just in case?
If the answer is no, then you are not financially secure. You will have to suffer a short period until you get rehired. What happens to your finances during that time is up to you. To prevent having to borrow money and sinking deeper into debt, try to find a secondary source of income that can sustain you during difficult times.
Have You Thought about Retirement?
Financial security is of utmost importance during your sunset years, when you can no longer work. If you haven’t thought about retirement so far, then you really should. Start a long-term investment plan to retire comfortably. Instead of relying just on a 401(k), open an IRA. The earlier, the better, because your investments would have more time to compound.
financial security isn’t necessarily about how much money you make each month. It’s about how well the money you earned is spent, saved, and invested. If you spend all the money you earn, then you are certainly not financially secure. Learn to save and invest a portion of your income to build wealth and be financially comfortable in the future.
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