The Financial Security Rulebook - 5 Crucial Steps

What is financial security?

While every person may have a slightly different answer to that question, in general financial security is making sure you can meet both your future and current financial needs. Debt control, budgeting, saving, investing … these can all play an important role in the pursuit of financial security. And while there are many different paths to follow, below are a few elemental steps you should consider taking along your individual route.

Step 1: Run the marathon, not the sprint

Investing in highly volatile stocks might pay off … or it could break you. Remember that many of the most successful investors are those who invest for the long-term and don’t aim for a short-burst payoff. What is your risk tolerance? If you don’t know (or even if you do) working with a seasoned Independent Financial Professional who can help you balance your investments accordingly may be the best move you make. (CLICK HERE for more information on Independent Financial Professionals.)

Step 2: Curb spending today for security tomorrow

That doesn’t mean you must live like a pauper, but taking a close look at where your money goes could reveal many small ways to save more. What if you brewed your own coffee in the morning instead of buying that daily $5 “designer” brew? What if you went to an expensive dinner just once a month instead of once a week? While little changes in spending likely won’t make much of a difference today, over time they could make a very positive difference. Budgeting today is important for financial security tomorrow.

Step 3: Avoid the temptation of credit  

Be conservative. Credit cards and loans can create a strong temptation for instant gratification, but why throw money away? When you pay interest, that’s basically what you’re doing.  If you must use credit, do so only for items that have lasting value – such as education expenses or for buying a home. For day-to-day purchases, do your best to pay cash.

Step 4: Self-Investment

What’s easier – building $50,000 through saving and investing … or earning an extra $50,000 in your paycheck? The best way to save money is to earn money, and the best way to earn money is to be a good earner. Let’s face it – the more money you have to work with now, the easier securing your financial future will be.  Invest in your education, training and career to make yourself a better earner.

Step 5: Consider a retirement delay

Before you curse and stop reading, consider this … if you delay even just a year or two, the difference could be very much worthwhile. For example, Social Security calculates your earnings history at the age you begin to receive your checks. A few more working years could boost your annual benefit. Consider too, each year you delay is another year your investments can grow. Depending on your situation, just a few more working years could result in thousands more for your retirement years. Work more now, play more later.