Simple Steps to Financial Security

There are few more common worries than financial security. Whether we’re young, old, rich or poor, we all spend a good bit of time thinking about money, often worrying if we’re able to do the things we want and need to do within our budget.

As a rule, most people are able to assemble a good financial plan for each month, covering all of their known expenses. The problem is when they run into unknown financial events like medical bills or repairs to the car or home. When those big sums show up in the mailbox, what can you do?

Unfortunately, many people see their financial situations ruined every day because of these large, unexpected costs. They may cover the costs by running up credit card debt, or they could get behind on their mortgage or rent. They may skip some bills to cover others, damaging their credit and risking discontinuation of services. They may be forced to work additional hours or at another job, consuming already-scarce family time.

Most of those options are very unappealing to the average consumer, so they want to know a better way to be positioned to take care of their financial needs. The best way to address financial stability is to look at it in the short term, the medium term, and the long term. When you frame it up like that, you can see what steps should be done when, and it gives you a plan to move ahead financially.

Short Term

Too many people give financial advice that centers exclusively on paying off debts and building an emergency fund. There’s no doubt that you should do those things, but they are long-term goals that will not get you a new fuel pump or take care of that emergency room bill.

Everybody needs an emergency financial tool in the toolbox. A short-term installment loan can be just that. They have quicker turnaround and manageable repayment plans, with eligibility requirements that put them within the reach of most consumers. Knowing that this option is available–even before you need it–provides peace of mind that can let you focus on longer-term financial steps.

Medium Term

Now let’s talk about an emergency fund. Most experts agree that it’s good to have at least two months’ worth of expenses saved up, and others advocate even more. Until you can get there, though, even $1,000 can go a long way toward protecting you from financial emergencies.

You can save that much faster than you realize when you look at your overall budget and build a savings plan. That means cutting out needless expenses and economizing on the essentials in any way you can, whether it’s changing insurance deductibles or couponing like crazy.

Long Term

This is the stage where we look way down the road at things like mortgages and retirement. Be aggressive with both. Take advantage of your employer’s retirement plan to the greatest possible extent so that you’ll be able to live comfortably when you no longer work.

In terms of mortgages, you should always be on the lookout for opportunities to save. Pay extra when you can, and refinance when your credit allows it. Both options will help you; paying extra will build equity that you can borrow from in an emergency, and refinancing will lower your costs, shorten your term, or both.

Short-term financial emergencies can cause you lots of problems. Minimizing their impact requires that you develop a plan right now for the expenses that could hit tomorrow, then a plan for the years ahead. The better you do with all three areas, the less risk you’ll have of encountering an expense that you don’t think of.

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