7 Signs You're Financially Secure
1. You Know Things Don't Buy Happiness
You enjoy what you have! You know that things do not buy you happiness. You are content with the items in your life and don't seek to clutter it with useless gadgets and gizmos. You can cruise through life without thinking to yourself "if I just had this one item, I would be happier."
2. You Don't Owe Anyone Money
You are independent! You don't owe anyone money. You don't have to avoid your friends, family members, or financial institutions because of late payments or insufficient funds. You feel healthy knowing that you are sustaining yourself. Even if you aren't the wealthiest person in the world, you are at peace.
3. You Aren't Scared of an Emergency
You know that if the roof falls in (literally or figuratively), that you will be ok! You may not have as much as you hoped for, but you aren't shuddering at the thought of something going wrong. You are comfortable knowing emergencies happen and that you can provide a solution.
4. You Sleep Well At Night
You get your zzz's in! You aren't losing sleep thinking about upcoming bills or late payments. You are getting your rest and can operate at full speed. Bonus points for those whose spouse also sleeps well! You know your family is living in financial harmony.
5. You Like Saving Your Money
You enjoy seeing your bank account increase! You genuinely enjoy putting your money away for your future and aren't "upset" about not being able to spend it immediately. You know you are reaping a bigger reward in the future. You get comfort from increasing your net worth.
6. You Don't Need to Impress Anyone
You are at peace with yourself! You don't need to flash around your money to impress your family, friends, or coworkers. You are good knowing your net worth without rubbing it in someone else's face. You also know that those that are doing that are not at peace with their financial situation. You stay in your lane.
7. You Seek Out Advice
You know you aren't alone! You seek advice from other people, books, and resources that help you increase your knowledge of money and your net worth. You understand the power of connection and that by connecting with others to reach their goals, it will ultimately help yours.
What am I trying to say?
Financial security has a lot less to do with a dollar amount than it has to do with your mindset. What your definition of financial security may not be someone else's definition. True financial security is when you are at peace with your lifestyle and are not scared of the uncertainties of the future. If you simply can't seem to get to that place follow the following order of operations:
1. Start an Emergency Fund. Start funding it with at least $25 a month until you have at least three months of expenses saved. Make this your priority.
2. Identify your debt. Physically list it and the dollar amount associated with it. Focus on paying off one debt at a time, and I advise to start with the smallest amount to get you motivated to pay off the larger ones. This should be your only financial goal until everything is paid off.
3. Once that is done, focus on investments available to you such as your company's 401k or a Roth IRA. Use the money you would have typically used to save your emergency fund or pay off your debt to fund these accounts.
4. Live Happily.