Reading Your Way to Financial Stability

woman reading

If you want to find out how you can be financially stable, you’ll mostly hear about savings and investments. You’ll be hard-pressed to find someone who will tell you that this is something that can be achieved through a book. Before we dive into how reading can help you reach financial stability, let’s first discuss its benefits.

Emotional and Physical Health

Research indicates that financially stable people are healthier both emotionally and physically. These people have made a habit and a routine out of eating a healthy and balanced meal. They’ve also understood the impact and importance of adequately exercising.

One of the things that people often miss about financial stability is that it’s more about your state of mind than the state of things. It’s about learning how to be focused, disciplined, and determined. It all begins by visualizing your financial goals. It’s another thing that people often miss is that financial stability is relative. It can look different from one person to another.

For example, in some areas of the world, a $13,000 annual salary can already lead to financial stability. Yet, in other parts of the world, they need at least $360,000 a year. Some people might view financial stability as eating three times a day, having a roof over their heads, and clothes. Others think that financial stability means being debt-free and being able to afford vacations and luxury items.

So when you think about it, financial stability is indeed relative. However, it has similar and common characteristics. For example, financially stable people can afford to be healthy. Their health allows them to focus and make reasonable financial decisions.

Financial Health

One of the main things that people talk about financial stability is financial health. Let’s cover the basics: financial health includes a reliable and consistent income, savings, and investments. You are not financially healthy when you don’t have a job or if you don’t have a stable source of money. In addition, you’re not financially healthy when you don’t have savings or at least some investments.

One of the biggest things that make people financially “sick” is debt. That’s why the top advice for most people is to lessen, if not eliminate, debt quickly. You should avoid it in the first place because it’s going to absorb your salary, stunt your savings, and prevent you from making investments.

Being financially “healthy” also means being financially literate. And the only way to achieve that is through reading. You don’t have to read tons of books right away; a simple visit to the internet will do. Start with reading blogs and articles. Move on to forums and then find out what people are reading. You’ll be surprised at what information you can find out there.

coins and cash

Reading for Financial Stability

The heart of financial stability is financial literacy. It has five core competencies:

1. Bring in the Funds

The first thing you need to learn and read about is earning. How do you diversify your source of income? How do you advance your career and salary? Making is all about bringing in revenue, which could be through a stable job or by managing your own business.

2. Raise Funds Through Saving and Investing

The next thing you need to wrap your mind around is how to save and invest. When you read, you don’t know just what to stop at simple tips and tricks of savings. You also want to develop a deep understanding and appreciation of the impact of saving not only on your financial stability but on your health in general.

In addition, you want to read about investments. You can start with simple topics such as the differences between bonds and stocks. Perhaps you might want to diversify your portfolio by adding in real estate. In this case, you read on the Internet, visit various forums, or learn from experts such as real estate agents. It would be best to learn from one who works in the field because they can give you first-hand accounts on various topics regarding real estate.

3. Watch How Much You Spend

The third core competency is spending, and it’s one of the most important concepts you need to read about. Spending is one thing that keeps people from achieving financial stability. They can fall trap of impulsive buying or lead extravagant lives. What you must remember is that you need to have a personalized approach to spending. Reflect on not just your needs but also your wants, and prioritize accordingly.

4. Consider Borrowing

Borrowing is one of the ways you can create assets by acquiring debt. This is something you want to read about, especially since debt is a severe factor and is one of the biggest reasons people can’t be financially stable. In this aspect, you need to consider whether you should take out a loan. It would be best to consider loans as your last option, and if you must take one, endeavor to pay them off as fast as you can.

5. Protect Yourself and Your Assets

Once you’ve covered all the other core competencies, the next thing you need to read about is essential. Sometimes, people would save a lot of money before every cent slips through their hands because of unfortunate and unforeseen events. Sometimes, they or a person they love could get in a car accident or even cancer. The sheer amount they need to spend for hospitalization will eat away at their savings until there’s nothing left.

This is why you need to think about protecting yourself and your assets. One of the ways to do that is to invest in insurance and plan for retirement. You don’t want to be faced with millions of medical bills with only your savings to spend. Insurance will help you with risk management. In addition, you want to plan your retirement because you won’t be able to earn efficiently for the rest of your life.

Financial stability is more of a state of mind than a state of things. This is why you need to equip yourself with the tools and skills to make reasonable and sound financial decisions. Understand that emotional and physical health has a lot to do with being financially stable. And you must continue to read and grow because the only way to financial stability is financial literacy.

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