6 Steps to Become
Financially Stable This
Year And Beyond
What does it mean to be financially stable?
A question you’ve probably asked yourself before or are even contemplating about right
now.
But because personal finances are very unique to you, how you view financial stability may
vary compared to the next person.
However, there are some common grounds to the definition and how you can get there.
Below I wanted to explore some simple steps that can help guide you to some financial
security.
Table of Contents
• What is Financial Stability?
• Signs You Might Be Financially Unstable
• 6 Ways to Become Financially Stable
• Tips to Become Financially Stable With A Low Income
• Final Thoughts
What is Financial Stability?
When you have reached a state of financial stability, you are confident and completely
stress-free when it comes to money. You are not worried about having the funds to pay your
bills, you are saving money each month, and you are also debt-free.
In the simplest way possible, being financially stable means you are spending less than you
earn (or living below your means).
You are able to pay for the basics of living (food, shelter, utilities) and still have money set
aside for any unexpected bills, emergencies, and your future retirement.
Yet, I think the biggest part of achieving financial stability is that you are not stressed about
money.
, You know you’ve reached financial peace when you aren’t worried about an unexpected cost
or panicking over how you’ll pay your rent, mortgage, or any accrued debt.
How much money is financially stable?
How much money you need to be financially stable depends on your cost of living and what
your needs will be. But to reach short-term financial stability would be to have 3-6 months of
living expenses saved. Long-term financial stability would be having enough to retire without
running out of money.
Signs You Might Be Financially Unstable
Although I covered the definition and a bit about what it means to be in a good financial
place, I want to share some warning signs that your finances might be a bit unstable first.
Sometimes you may not realize you are on the verge of instability or you might be in some
form of denial.
Back in 2013-2014, I knew I wasn’t financially in the best shape but chose to pretend it wasn’t
bad.
But until I really reflected and wrote down what was happening, I didn’t realize how bad my
money mistakes were.
Here are the signs of unstable finances:
• Very low emergency fund or you have none at all
• Maxed out one more credit cards and barely making minimum payments
• Your credit score is extremely low, or the scoring has been sinking
• If you lost your job, you’d be financially screwed immediately
• You are not saving for retirement because you can’t afford to or know how to
• After your monthly expenses, you have nothing leftover
• Late fees or overdraft fees happen quite regularly
• Money is constantly stressing you out and losing sleep over it
• You end up borrowing money from family or friends more than you want to admit
• You’re drowning in total debt because you’re making bare minimum payments, trying to
consolidate, or trying to push it off.
These are just some of the handful of warning signs. And five of the above, I dealt with for a
few years after college.
Maybe you fit into only a few of the signs above or maybe them all.
The important step here is not to feel ashamed or feel that you are alone — as so many
people of different generations are battling these too.
But the great news is you are learning and reading this post, looking to make changes with
your finances.
In the next section, I’ll cover how you can become financially stable. These are the steps I
took in order to reach a new level of financial health.
Financially Stable This
Year And Beyond
What does it mean to be financially stable?
A question you’ve probably asked yourself before or are even contemplating about right
now.
But because personal finances are very unique to you, how you view financial stability may
vary compared to the next person.
However, there are some common grounds to the definition and how you can get there.
Below I wanted to explore some simple steps that can help guide you to some financial
security.
Table of Contents
• What is Financial Stability?
• Signs You Might Be Financially Unstable
• 6 Ways to Become Financially Stable
• Tips to Become Financially Stable With A Low Income
• Final Thoughts
What is Financial Stability?
When you have reached a state of financial stability, you are confident and completely
stress-free when it comes to money. You are not worried about having the funds to pay your
bills, you are saving money each month, and you are also debt-free.
In the simplest way possible, being financially stable means you are spending less than you
earn (or living below your means).
You are able to pay for the basics of living (food, shelter, utilities) and still have money set
aside for any unexpected bills, emergencies, and your future retirement.
Yet, I think the biggest part of achieving financial stability is that you are not stressed about
money.
, You know you’ve reached financial peace when you aren’t worried about an unexpected cost
or panicking over how you’ll pay your rent, mortgage, or any accrued debt.
How much money is financially stable?
How much money you need to be financially stable depends on your cost of living and what
your needs will be. But to reach short-term financial stability would be to have 3-6 months of
living expenses saved. Long-term financial stability would be having enough to retire without
running out of money.
Signs You Might Be Financially Unstable
Although I covered the definition and a bit about what it means to be in a good financial
place, I want to share some warning signs that your finances might be a bit unstable first.
Sometimes you may not realize you are on the verge of instability or you might be in some
form of denial.
Back in 2013-2014, I knew I wasn’t financially in the best shape but chose to pretend it wasn’t
bad.
But until I really reflected and wrote down what was happening, I didn’t realize how bad my
money mistakes were.
Here are the signs of unstable finances:
• Very low emergency fund or you have none at all
• Maxed out one more credit cards and barely making minimum payments
• Your credit score is extremely low, or the scoring has been sinking
• If you lost your job, you’d be financially screwed immediately
• You are not saving for retirement because you can’t afford to or know how to
• After your monthly expenses, you have nothing leftover
• Late fees or overdraft fees happen quite regularly
• Money is constantly stressing you out and losing sleep over it
• You end up borrowing money from family or friends more than you want to admit
• You’re drowning in total debt because you’re making bare minimum payments, trying to
consolidate, or trying to push it off.
These are just some of the handful of warning signs. And five of the above, I dealt with for a
few years after college.
Maybe you fit into only a few of the signs above or maybe them all.
The important step here is not to feel ashamed or feel that you are alone — as so many
people of different generations are battling these too.
But the great news is you are learning and reading this post, looking to make changes with
your finances.
In the next section, I’ll cover how you can become financially stable. These are the steps I
took in order to reach a new level of financial health.
