BUDGETING: Achieving Financial Stability

Although the road ahead for you might seem full of twists and turns, and that financial stability seems that it will never going to truly be something within your reach, I think differently. Anything can be done when you put your mind it, and nothing will make your life more relaxed than when you have reached financial stability.

With all the bills you have to pay, the debt you’re trying to clear, the savings you want to establish and the fun you’re trying to have, it is easy to get lost and give up when things seem too hard. But being financially stable is not just a good idea, it is a responsibility.

For most people, the number one deterrent to financial stability is the debt that have accumulated over the years. From loans to credit card debt, it all adds up to amounts highly difficult to manage. The best way to start on the right path then is to establish a budget. As much as it is boring and requires discipline, it is necessary. If you have never established a budget or have tried and failed, if you don’t know how to set up a money-smart budget, then start here.

When I’m consulting and looking at the budgets, there are a few areas that I focus on. Let’s review them.

Your fixed expenses

As you are working towards financial stability, most of your expenses should be in this category. These include your rent or mortgage, your monthly insurance bills, your loan payments, your grocery budget, your subscription payments (Netflix, Hulu, Cable, internet and such). Don’t forget your membership payments such as gym membership.

While some of these expenses are unavoidable, it is worth reviewing them to assess whether some savings could be implemented. For instance, if you haven’t reviewed or shopped for car insurance in several years, looking at other options now may potentially lead to savings.

Are you monthly debt payments hurting you? Monthly loan dues are also a very impactful factor that keep people from attaining financial stability. The idea is to manage them appropriately and not add more debt to your load. Websites such as http://refinancestudent.loan/ may help you get the minimum payments brought down by having the interest reduced.

While most of your monthly expenses should be in this category, the reality is that for some, they are not the costliest ones. Some individuals fall in the trap of the variable expenses which are not usually tracked.

Variable Expenses

Gas in your car, your electricity bill, your water bill, your eating out budget, your shopping…these are all monthly variable expenses and when they somehow become too high, they hurt your budget. When establishing a budget, look at several past months and choose a reasonable average to incorporate in your plan.

After working with clients and readers, I see consistently that food and general shopping areas where people tend to be very loose with their spending. Not keeping track eventually leads to unstable financial months.

Variable expenses by their name will never be the same every month. Nonetheless, you can budget for them and set limits. Get in the habit of looking at your budget on a regular basis, at least once a month, to closely manage your progress. The main ingredient for success is to keep track, whatever the best method may be for you.

Are You Looking for Ways to Save Money?

If the answer to this is no, then financial instability is no surprise. Besides looking for ways to cut costs, such as taking the time to buy coupons for money off or canceling unused subscriptions, it is important to set a systematic savings habit. It baffles me that some individuals simply do not own a savings account. When I worked at the bank, I consistently had to educate some of my clients on the importance of having a separate savings account from their checking.

A long time ago, I decided to save immediately out of my salary when I get paid. When you receive your direct deposit or your check, immediately transfer a portion to your savings account. Whether it is a percentage of your pay or a set amount does not matter as long as you do it religiously and consistently. By doing so, you will build up enough to keep peace of mind.

These are the initial important steps to take to build a budget and work towards financial stability. Start now, don’t delay and do not give up.


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