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All of us aim to be financially stable. We try to maintain a budget, make it a goal to maximize our savings, minimize our spending, pay off our debts and dream of the day when we can count ourselves among those who are wealthy and financially stable. But what does financial stability look like? Here are some signs you are financially stable.

1. You can pay in cash.

The first sign that you are financially stable is that you can and are comfortable paying for purchases and bills in cash. You can only pay in cash when you already have a budget set out for it. Or if it is not in the budget, paying in cash means that you have the extra cash to pay for it.

2. You use your credit cards for convenience and rewards–not out of necessity.

When you are financially stable, you will use your credit cards mostly for convenience–when you forgot to bring some extra cash; or for earning points so that you can qualify for a major reward that you can enjoy later on.

3. You pay your credit cards in full, each month.

Being financially stable also means that you are capable of paying your credit card purchases in full, each month. This means that you are only using it for convenience, as in #2 above, and you have the actual money to pay for your purchase in cash.

4. You pay all your bills monthly, in advance–never late.

As a financially stable person, you should be able to pay your bills monthly and in advance, so you don’t incur late fees or having your service cut off. You don’t pay your bills 2-3 months overdue so you don’t experience the inconvenience of having to call customer service to reconnect the service.

5. You’re a natural saver.

Saving should already be a natural habit for you. This means that you are always thoughtful about your spending. You are not inclined to keep up with other wealthier people’s lifestyles. You do not really care what other people say about the things you have or do. Your priority is saving for an even brighter financial future.

6. You comfortably live within your means.

Financially stable people are able to live comfortably and consistently below their means. This means that they have already identified what is valuable and necessary to them and they focus their spending on those things. Being able to live beneath your means also shows that you are always on budget and rarely spend your money on things that do not bring you some kind of satisfaction or reward in return.

7. You don’t feel guilty when you’re out for special occasions.

Just because you opt to save instead of spending does not mean you deprive yourself of the pleasant things in life. Because you are a natural saver, you have accumulated enough extra money that you area able to splurge once in a while on special occasions that reward you with pleasant memories and strengthen your bond with the people who are most important to you.

8. You can afford to buy the things you really want.

Just like splurging on experiences and the people you value, you also reward yourself by buying the things you really want because you can afford to do so and it is a reward to yourself for your hard work. For example, you might have been wanting a very cozy mattress ever since you started following a budgeting system. You do not feel guilty about buying it. It is also in this way that you can feel even more that you have truly succeeded in achieving financial stability.

9. You are generous with money to help others.

A financially stable person does not worry about losing the money they provide to help out other people. When you are financially stable, you will feel even wealthier every time you help out someone in financial need. Being able to do so means that you are financially capable and being able to help out is in itself a kind of blessing.

10. You can survive for months without a paycheck.

One of the goals of putting savings in your monthly budget is to allow you to still be able to keep up with your financial needs even if you lose your job or your paychecks get delayed for a few months. If you can comfortably live on what you have saved for several months while you are still looking for a new job or working on launching your business, then you can check off this item on your financially stable list. This is one of the lessons we have learned in the pandemic.

11. You have a financial plan for the unexpected.

You cannot plan for the unexpected but you can be prepared for it financially. This is where your emergency funds or insurance come in. Emergencies include losing your job (as in #10 above), delayed payments if you are project-based, sudden hospitalization for a family member, etc. This part of your financial plan also includes your insurance policies to help you survive an unexpected financial event. While sudden events may take us by surprise, our financial plan should be there to back us up.

12. You have financial freedom.

Having enough savings and diligently following a budget means that you are able to monitor where your money goes and you have the freedom to choose where the rest of it (the extra that you have accumulated) can be spent on. You are also comfortable in choosing among the options to grow your money even more whether it be maximizing your investment portfolio or going into a business or both.

Generally, you are happy with your financial situation and you do not worry about your financial future because you are totally in control of your finances. You have the freedom to pursue the the job that you want rather than a high-paying one.

If you are far from being financially stable, don’t worry. It it not yet too late to change your future. You have the power within you to redesign your life one step at a time.

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Edited version. First published in Pinoy Smart Living on 07.03.2018.

Feature Photo by Karolina Grabowska from Pexels