How Financially Stable Are You?

What is the true definition of being financially stable? Though there are different definitions, here is a look at a few options to note.

All basic needs met/bills paid monthly

Have a buffer of money left over each month after basic needs are met - this could be any amount but to start out it can range between $500 - $800

Pay off any debt you might have - student loans, credit card debt, mortgages, car loans. Any debt that is taking money away from your account each month qualifies here.

Save 2 - 5% of your income

Invest 2 - 5% of your income

Since we will all have to retire at some point, if you are participating in a work-related 401K retirement plan this is even better since you will have that in addition to whatever savings, plus interest accrued on your savings, you make and any income you make on your investments.

But I Don't Make Enough Money...

Perhaps you are reading this blog post and thinking to yourself “But I hardly have enough to cover my basic needs let alone have a $500 buffer !”

A simple solution to that particular problem is for you to start a side business.

It is possible for you to start a side hustle pretty much anywhere in the world these days. From driving for Uber or Lyft to renting your spare bedroom on AirBnB to starting a freelance business.

No time for a side hustle ?You could also negotiate a higher salary at your current job. All of these can be used to answer the question of creating a financial buffer each month so you are not scrambling to make ends meet let alone save 2% of your income.