7 Steps to Achieve Financial Security

A financially secure future could pay off nicely. But how can you start saving? Let’s take a look here…

When it comes to financial security, there’s no shortage of worrying figures. More than 40% of Americans fret over their finances each night, for instance. Elsewhere, 29% don’t have any savings at all to fall back on. With bills, regular expenses, hobbies, and other outgoings to deal with, it’s easy to see why we can start to spread ourselves thin.

And while everyone wants to be able to manage their finances so they can afford a lifestyle that suits them upon retirement, it’s certainly easier said than done. So, what can you do to become more financially stable now and into the future?

We’re not financial advisors and aren’t in any position to offer you financial advice. So instead, we’ll offer up a few pointers and suggestions as a place to start that you may want to consider.

What is financial security?

There’s more to financial security than simply “having money”. How many times have we seen entrepreneurs, athletes, and film stars acquire vast wealth only to lose it years down the line? You could have all the money in the world, but if you aren’t careful with your finances, then financial stability might always remain out of reach.

Those with financial security may be able to live without debt, can pay their monthly expenses, invest for retirement, and have money in the bank for emergencies. Put simply, they’re able to survive if anything unexpected were to take place.

Losing a job. Taking care of a sick family member. Even dealing with the repercussions of a global pandemic. A financially secure person can handle instances like this without worry.

How to manage your financial assets

Start saving early

The sooner you can start to save, the better. But even if you’re a late saver, don’t worry! All that matters is that you’ve started. And remember: every cent and dollar you save can make all the difference.

Consider diversifying your portfolio

You might’ve heard the term diversified portfolio before, but the two words together still make little sense. At its simplest, a diversified portfolio contains complementary assets, like stocks and bonds, that behave in different ways.

This might mean that as one part of a portfolio declines in value, the loss can be offset by another part of the portfolio that’s rising. Essentially, it’s the opposite of putting all your eggs in one basket and can decrease risk and make sure you’re making as much money from your assets as possible.

So, what can you diversify your portfolio with? As well as more traditional assets like shares, stocks, and bonds, there are also plenty of alternative investments you can use to protect yourself from risk. From physical gold and real estate, to hedge funds, cryptocurrencies, art and antiques, and even commodities such as sustainable energy, there are a whole host of alternatives you can use to optimize your asset portfolio.

Set financial goals

What does financial security look like to you? When you can answer that, you’ll have a better idea of what to do. Maybe it’s credit card debt you’d like to pay off or something you can lean on in case of emergencies? Perhaps you’d like to start saving money each month for retirement?

Whatever your goals may be, write them down and then work out how much you need to put aside in order to achieve them. Then, once you’ve defined them, put them in order of importance so you know which ones you can start prioritizing.

Start budgeting better

You knew it was coming but budgeting really is an important part of achieving financial security. If the prospect of tightening your belt makes you anxious, try to reframe your thinking: a budget is simply a way of tracking where your money is going. Without one, it’s far easier to start spending more than you should.

And once you know where your money goes, you can start to plan accordingly. Obviously, you’ll need to put aside money for the essential things like rent/mortgage, bills, food, and car payments. Added together, these should make up about half of your spending. Don’t forget, it’s been said elsewhere that your rent/mortgage should not make up more than 30% of your monthly spending.

With the remaining money, it’s recommended that you put 10% to 20% of that towards your retirement, emergency fund, or any other saving accounts you have. Any money that’s remaining is yours to live off – just be sure not to overspend.

It’s worth working out how much money you spend on things to treat yourself with. That way you can know where you may need to cut back on your spending even more.

Live below your means

Just because you have the money, it doesn’t mean you have to spend it. When you earn a decent chunk of change, it’s tempting to splurge just because you can. But by living below your means, you’ll always be spending less than you make.

Pay off your debt

One of the biggest obstacles on the way towards financial security is debt. If you still have outstanding debts, then greater financial security could be more of a challenge.

Luckily, by combining budgeting and living below your means with one of the two methods below, you could start paying off your debt and heading in the right direction financially. Let’s take a look at the methods that could help you out:

• The snowball method: Here, you pay off the smallest debt first, before working your way up to larger debts, regardless of interest rates. These kinds of quick wins are a great motivator – there’s no greater satisfaction than crossing off one of your debts from the list you’ve created.

• The avalanche method: In this method, you’ll take the opposite approach, paying off the debt with the largest interest rate first, before working your way down to smaller debts with lower interest rates. This method lets you pay the least amount of money in interest overall, but you won’t get that same empowering feeling that comes with the snowball method.

Consider the future

Prioritizing your retirement now might seem like a strange ask, but future you will definitely be thankful for your foresight. Whether you want to go traveling, learn a new skill, or just put your feet up, having money will make doing these things far easier.

You may want to research your options through work. Many employers offer a 401(k) or 403(b) plan. If so, you might want to go down that route.

If your employer has nothing in the way of a retirement plan, then you can always open an individual retirement account (IRA).

At Glint, we make every effort to demonstrate a balanced conversation between gold, crypto and fiat currencies when it comes to purchasing power and, while we strongly believe that gold is the fairest and most reliable currency on the planet, we need to point out that it isn’t 100% risk free. While we have seen a steady increase over time, the value of gold can fall, which means that its purchasing power can also decline.

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