By | Beatrice Mullen
For many people, the idea of financial stability seems like a very distant, faraway goal.
It doesn’t have to be that way. For many people, financial security is more accessible than they dreamed possible. It’s just a matter of planning, maintenance, and patience.
Not sure how to start building a stronger financial foundation? Here are some easy, actionable tips for reaching your financial goals in 2020…
Create Recurring Revenue
‘Boring’ and ‘predictable’ might not be desirable traits in a person, but they’re extremely desirable in terms of income. Regular, reliable income can play a huge role in helping you build your savings and attain financial stability.
One of the most traditional forms of recurring revenue is a regular paycheck from a full-time job. However, that’s far from the only way you can establish a recurring income stream.
For example, a freelancer might establish long-term work contracts with companies. Alternatively, other recurring revenue sources might include collecting rent from investment properties or collecting royalties for intellectual property.
Pay Off Your Debts
Did you know that the average American is currently about $38,000 in debt?
You might be tempted to shrug and figure ‘well, a little debt isn’t that big a deal.’
But debt is burdensome. It can create financial and emotional stress. It can also end up costing you a lot over time.
For example, say that you bought a plane ticket to Mexico for $1,000. If your credit card has a 10 percent interest rate and you’re only paying the monthly minimum, that trip to Cabo could end up costing you a lot more than the original ticket price!
If you want to take a powerful step toward financial freedom, start paying off your debts now. Not only will it reduce your stress levels, but it can also help you increase your savings, too!
Create an Emergency Fund
You’ve heard of saving for a rainy day. What about when there’s a flood?
Stuff happens. Unexpected expenses like car repairs, hospital bills, or emergency plumbing jobs can create a ton of stress — especially if you don’t have money in the bank. And yet only about 28 percent of Americans have an emergency fund.
Do your future self a solid and get smart about saving. How much you put aside each month will depend on factors like the size of your household and your income level — this handy calculation can help you figure it out with ease.
Get Involved in the Stock Market
Plenty of people are interested in getting involved in the stock market … but they’re intimidated because they don’t know where to get started.
There’s not a single approach. It all depends on your personal goals, risk tolerance, and style.
Some people like long-term investing because it’s relatively low-risk. The trade-off? As the name implies, long-term investing usually takes years to deliver returns.
For people who have a greater risk tolerance and love the action of the stock market, trading penny stocks may be appealing. This is a type of short-term trading that capitalizes on market volatility. It can potentially deliver fast returns — but it can be extremely risky.
Regardless of your approach, it’s important to educate yourself on the mechanics of the stock market before you start trading or investing. Be smart with your money!
Slow But Steady …
Attaining financial stability won’t happen overnight, but that doesn’t mean it’s an impossible pursuit. It’s mostly a matter of educating yourself, reducing debt, and being diligent about saving. With a little time and effort, it’s possible to reach your financial goals sooner than you might have thought!