Resource: Financial Ingredients List – PDF
How can you tell if you’re financially stable? What does it mean to be financially stable? Most people have these questions when figuring out their finances. Making financial decisions is tough for a lot of people because there’s uncertainty about what decision is the correct decision to make, and then it’s easy to second guess yourself once you’ve actually made the decision. But with a basic understanding of a few financial principles, and a priority list, you can understand what financial stability is and make the right financial decisions at the right time. Watch the video above or keep reading to get a recipe for financial decision-making that will help you make better financial decisions because you’ll know what ingredients to add and when to add them.
The core of financial stability is that you’re confident and comfortable with your financial situation. What that looks like can include a lot of aspects:
Financial stability gives you freedom. You don’t have to be rich to be financially stable. You have to understand money and have the discipline and the right mindset about money to be able to achieve the financial stability the balance and security you want.
Now that we understand financial stability meaning, let’s take a look at how to achieve it. There are many ways to find financial stability in your life, but people often go about them in the wrong order.
Picture yourself making pancakes 100% from scratch for the very first time. You start with an empty bowl, pancake mix has not been invented yet. All the ingredients for the pancakes are in one of three places: your refrigerator, your cupboard, or your pantry. How well do you think you would fare in creating beautiful golden-brown, tender melt-in-your-mouth pancakes on your very first try if you had no recipe? Now picture yourself making those pancakes one more time but this time, there’s just one difference…you have the recipe! Do you think that your chances of success are better now?
Similarly, many people have all the financial ingredients they need but no recipe! Here’s our recipe for financial stability that will help you make better financial decisions because you’ll know what ingredients to add and when to add them.
So to list every ingredient in its proper order, it looks like this:
The world gets the recipe exactly backward because many people believe that by investing they can make enough money to pay off their debt. Then, once their debt is paid off, they’ll be able to save something…and finally, they’ll get around to protection when they can “afford it.”Sadly sometimes, it will get too late to ever have good protection.
Trying to do things backward like that is dangerous because if your investment gets wiped out, you still have the debt…and no savings. If you don’t do well enough to pay off your debts, the interest on your debt is compounding against you, and if you don’t make enough in your investments to make debt payments, you definitely don’t have anything coming from your investments that can be saved.
Instead, use all the same ingredients, but put them together in the right order, and boom, you have a recipe that works really well. You can download a free “recipe” to these financial ingredients right here: https://s3-us-west-2.amazonaws.com/annamcfie/YouTube/Graphic+For+Financial+decision+making+video.pdf
Having each of the financial ingredients listed in order of priority will help you achieve financial stability and make good financial decisions.
There are other videos on the channel that focus on each area of importance: life insurance, asset protection, how to save money, managing and paying off debt, etc. Check out those videos too. And if you need guidance or help, we’re just a phone call away at 702-660-7000.