How to reach financial stability in 6 months?
It is very important to keep financial stability. However, household expenses, purchase of food, clothing, medicines and other daily types of expenses make it hard to reach financial stability if you do not create a budget and do not follow it. To create such a plan you need to know budgeting basics. So here are useful tips how to reach financial stability in 6 months.
1. Follow your current expenses
Keep notes of everything you buy with a credit card and cash. Divide your purchases into categories: food, payment for housing, bills for public services, entertainments, transport, insurance, health, and cloth. If you have kinds there should be separate category of expenses for them. Also add a column of “different” expenses.
2. Analyze your incomes including regular payment, interest income from bank accounts and also rental income.
3. Define your progress or its absence comparing your incomes and expenses. If your expenses exceed earnings, you should immediately change this tendency.
4. Create a budget on the base of your regular expenses. Try to reduce your expenses on your daily pleasure things, for example, make and drink coffee at home instead of going to café, stop going to the cinema or other entertainment facilities, save electricity and gas. Take food with you to your work instead of buying it in the local stores. Do not buy anything in vending machines.
5. Do not use credit cards, especially those that require high interest rates. Interest quickly accumulates and eventually you will have to pay more for a thing than it actually costs.
6. Extinguish all debts. Start with the debts that are most easy to extinguish. Create a plan of absolutely all debts extinguishing and allocate a special budget for these purposes.
7. If you have extra money, spend it on debts extinguishing or put it in a savings account. Do not waste it. Use the means to reach financial independence.
8. Get another job so that you have an additional source of income in case your budget plan does not give any results. Even if you have to apply for a job for a short period of time to extinguish your debts, use this opportunity.
9. Start enjoying free or cheaper forms of entertainment. For example, instead of going to the movie, rent movies or watch TV. Go to the park instead of bar or restaurant.
10. Create a budget for a rainy day that should be enough for you to live for 3-6 months. This money can be spent on solving of emergency financial problems.
10 habits of financial stability
1. Learn how to save
It should be you priority goal, especially when you do not own large capital yet. Do not deny yourself necessary things, and at the same time try not to waste money. Many people spend much money monthly on something they do not need at all.
2. Measure your expanses
If you have never followed your expanses, try to do it for a moth at least, scrupulously make notes of all your spending and purchases. Evaluate the way how and how much money you spend and think it over, whether it is possible to reduce your expenses. Within this experimental month you will see whether you use the money you earn effectively or not.
3. Make investments in your future
I guess, you do not think about such things, especially when you are still young. However, it is important. Try to save some amount of earned money every month. It would be even better if the money grow (use bank securities or deposits, and so on). Do not delay your financial well-being, try to save some money already now.
4. Pay off and avoid debt
In case you have personal credits, credit cards and other kinds of debts, you should start debt elimination. It would be useful to make notes of all your debts and place them in order beginning with the smallest and ending with the biggest. And in such a way gradually eliminate all your debts. It can take even a couple of years, but it is very useful and necessary thing to do.
5. Use envelopes
This is a very simple monitoring system of what sum of money you have and how much you can spend. Divide your income into 4 envelopes: one envelope is for rent payment, another one is for transport, one is for food, and one more is for incidentals. In such a way it will be easy to follow when, how and why you run out of money.
6. Pay bills at once or automatically
It is a very good habit to pay the bills immediately as they come if it is possible. It will give you opportunity not to accumulate debts. Also you will see at once what amount of money you can spend on your personal needs this month.
7. Read additional information about personal finances
When you understand financial issues well, then you get more money, since you will be aware of what bank you can trust, what securities it would be better to invest your money and so on.
8. Find way to raise your own capital
Do everything possible to raise your capital. Find ways to earn more money, look for the job where you will be paid more or look for additional income.
9. Quit bad habits
There are so many bad habits that regularly take away your money. It can be drinking, smoking, collecting of unnecessary staff and so on. Have a look at what in your life gives you little benefit and happiness but takes your money away at the same time. Try to give up such habits.
10. Take care of your health
Now medicine is extremely expensive: drugs, treatment, examinations. Keep healthy lifestyle, it will bring you happiness and health and will not let you waste money on diseases treatment.
So as you can see there are many tips how to reach financial stability. Anyway the most important is to develop a habit to save money. I hope this essay on financial stability was really helpful. Use our tips and you will definitely reach financial stability. For more useful essays visit Livecustomwriting.com. This is a great essay writing service where you will find lots of original essays on various topics and also you can get help from our team of professional writers.