6 Steps to Improve Your Financial Security

Pinpoint Your Priorities

You probably can’t afford everything you want. (If you could, would you be reading this?)

The essentials you need to live your life are non-negotiable. But if you don’t have a clear picture of what this does and doesn’t include, uncertainty will loom.

Accomplishing this can be as simple as writing them down. And after you highlight the “must-haves” in your life, you will find it becomes much easier to cut back on the “nice-to-haves” that are draining you financially.

For example, homeownership is a milestone that feels out-of-reach for many due to down payment requirements.

Make it a habit to find areas where you can reduce spending, like late-night take-outs and online shopping splurges, and stash it instead.

Track Your Expenses

Once you pinpoint your priorities, don’t stop there. Zero in on what they look like in action so you can monitor your progress by tracking your expenses. This will help you commit to saving for your most important financial goals.

You can use financial software, apps, and tools to track your expenses, but you don’t have to — especially if you find it to makes the task more overwhelming.

A simple spreadsheet will do the trick, either on your computer or done by hand. In fact, any method you use is acceptable as long as you use it faithfully.

Tracking expenses is crucial for everyone. Even if you decide to become a coach, it’s important to keep a record of all your business-related expenses, including equipment purchases, office supplies, software subscriptions, and any other costs associated with running your coaching business.

Stress arises from the unknown and not knowing how you spend your money each month is no exception. Having a clear understanding of how you’re spending your money will keep you on track to achieve your financial goals.

Establish a Strong Emergency Fund

Challenges in life have a way of showing up when least expected.

Job losses, unexpected medical bills, major household repairs — these are just a few of the events that can deplete your savings and disturb your financial peace of mind.

Here lies the importance of having an emergency fund you can count on.

Most financial experts say that one non-negotiable component of financial wellness is having an emergency fund equal to three to six months of living expenses.

That may sound like a huge mountain to climb right now, but take it one step at a time.

Figure out what you can afford to contribute to your fund each month and forecast how long it will take you to get there. You can even automate your savings with popular apps like Acorns.

Even if it’s not immediate, knowing that you have an emergency fund in the works will help provide a greater sense of financial security.

Protect Your Paycheck

How devastating would it be for you financially if you were to go without your next paycheck? The Federal Reserve reports that 39% of Americans don’t have enough money on hand to cover an unexpected $400 expense.

Losing your job and source of income is among the most stress-inducing fears you can have.

Getting downsized or having your company go out of business aren’t the only ways you can lose your paycheck.

A major injury or illness can also be the catalyst for not being able to work.

And contrary to popular belief, it can happen to you. According to the Council for Disability Awareness, approximately one in four of 20 year-olds today will suffer a disabling event before they retire. 

So, how can you protect the paycheck you rely on to meet your financial obligations? If your employer offers disability insurance as a benefit, enroll when you’re eligible.

If they don’t, purchase a long-term disability policy as soon as you can.

The peace of mind knowing that your paycheck will continue if you can’t work is beyond compare.

Set Your Sights On Something Fun

As a kid, vegetables come before dessert. As an adult, your financial needs come before your financial wants.

You have to establish your emergency savings fund and other must-haves before you can start saving for the fun stuff. But it’s well worth the wait.

Whether you wish to visit an exciting destination, buy a special gift for a loved one, or upgrade your means of transportation, it’s important to give yourself something to look forward to.

Putting a reasonable amount of money aside each paycheck for something fun can be fulfilling when you look at your statements each month.

Of course, paying the bills, saving for retirement, providing for your family, and other necessities still come first.

It doesn’t hurt to set your sights on something fun as long it’s realistic and responsible though.