We share with you the definitions of Financial Security that will help you focus your efforts to achieve it
This week we want to talk to you about a topic that is very relevant in all of our lives: financial security. Bearing this in mind, we decided to prepare this article to suggest What You Should Understand By Financial Security.
Have your Essential Expenses covered
The first of the definitions of financial security is associated with having access to everything essential to live from day to day. Among the items that fall into the category of Essential Expenses is having:
1) A place to sleep.
2) Daily feeding.
3) Access to water.
Most people realize that they need the essentials to live when they decide to move out of their parents’ house and begin to lead an independent life. When you are independent you realize that meeting essential needs costs money and not necessarily a little money.
Covering these essential needs is the most basic level of financial security and many people in the world struggle daily to have access to the items that fall into this category.
If in your case you already have your essential expenses covered, perhaps you are not valuing that fact, we recommend that you do so.
The second of the definitions of financial security is associated with living debt-free. This is because it does not matter if you owe someone in your family, a bank, or, in the worst case, a lender. The fact is the same, in the past, you borrowed money from other people to satisfy some of your needs (or desires) and because of that, you have to allocate a part of your money to the monthly payment of those debts. If you are in this situation then you depend on a source of monthly income to pay back what you borrowed.
If you really want to enjoy yourself quietly, we suggest that you include freeing yourself from your debts among your financial goals. The first step to this is to want to live without debt (include it as a goal), the second step is to take control of your money by making a realistic budget using the four principles of our method.
be financially independent
The last of the definitions of financial security is being totally independent in financial terms, that is, not depending on any job to maintain your lifestyle. This is the highest and most accepted definition of financial security. After all, a person who works eight hours a day for a third party makes his life revolve around things that are not necessarily what he would like.
If you are looking to be financially independent, you must be clear that this is a destination that is not reached overnight, rather it is a path that you must travel throughout your life. According to Thomas J. Stanley and William D. Danko authors of ” The Millionaire Next Door “, if a person wishes to successfully walk the path of financial security he will have to learn to:
- Manage your money wisely using a realistic budget
- Be disciplined with your spending according to your budget
- Include saving as one of your best habits
- Invest what you have saved over time
Most of the people who manage to maintain their lifestyle, once they chose to end their working life, learned these four activities and incorporated them as part of their daily habits.
If one day you want to have the confidence to fight for your dreams, that fight starts today. Don’t wait for the start of next month to put your finances in order, rather start today: 1) Understand where you are financially speaking; 2) Learn or seek help if needed; 3) Start to improve your financial situation and 4) Get your financial security.
We invite you to comment on this article and share with us the definition of financial security that best suits or represents you.