Finance is among such topics which are discussed by many but understood by only a few. Every person wants to be in a position where they can attain the financial freedom or in other words financial stability. The financial stability is not something which can be measured by the income, bank balance or property. A person with comparatively lower income or bank balance can also be financially stable. Here we have got some parameters by which you can measure your financial stability. Let’s take a test and find out how far our finance is stable.
- You are Happy with Your Financial Condition
The first sign of being financially stable is that you are satisfied with your financial condition. When your financial condition brings you joy instead of panic or fear, you must understand that you finance in under your control. Panic on finance comes only when you are uncertain if the money which you have is pretty enough to run the month until the next cash flow.
- You Don’t Need to Argue With Your Spouse about the Monthly Budget
Both the spouses in a family have a common goal to run the family smoothly. But while chasing the same goal if you regularly or semi-regularly land on an argument, then it indicates that your financial conditions are not stable. If you and your partner both are comfortable with the money which you have then you have attained the financial freedom.
- Credit Cards are Used Rarely
Having a credit card is common for every wallet. One can measure his financial stability with the intensity of using the credit card. It is the best situation when you don’t need to use a credit card. But if you use, you use it very rarely and pay them off in the next month itself. If you are also practicing the same then you are likely in a sound financial place.
- You are Ready for Financial Emergencies
A financial emergency can come in different ways such as medical emergency, urgent travel, job loss, vehicle repair and so on. Such situation can start a panic if you are not financially fit. If you can handle those situations without going into a debt, then this is the time when you can feel that your finance is just enough to be called financially stable.
- Upcoming Festivals No More Bring Worries
I have come across many people who need to take a personal loan in order to celebrate a festival. They take a personal loan for buying an anniversary gift, birthday gift etc. If you are also worried about your spouse’s upcoming birthday, then you are to go some more to attain financial stability. When you will be able to celebrate festivals without compromising in the monthly budget, you should understand that you have got financial freedom.
- You Can Save Money Without A Stress
Savings are of two kinds in general- A forceful saving and a habitual saving. The financial condition when you are struggling to meet both ends, you do a forceful saving. But along with time when your financial condition will be improved, you won’t need to struggle for savings. When you are in a financial condition which is stable, money saving will turn to a habit.
- The Utility Bill Payment doesn’t require a Financial Planning
When you are in a good financial condition, your utility bills such such as electricity, water, LPG won’t seem big to you. You can easily pay these bills and never delay the payment.
- Retirement And Kids College Expenses Are Covered
The adequate savings for retirement and higher education should be some of the prominent financial goals of a person. Every person must save for these two goals before he enjoys his money. The day when you will feel that you have saved enough to fulfill these two goals, you should understand that the financial stability has been attained by you.
- Your Debt-To-Income Ratio is Below 30%
This is one the parameter which can be measured in mathematical terms. The lower debt-to-income ratio means the higher financial soundness. Every person must try to eliminate debts as early as possible. No or low debt not only ensures financial stability, they provide peace of mind to know that you are not under any debt.
- You Are Selective About Purchasing
Whenever it comes to purchasing an asset, you chose an appreciating as opposed to depreciating assets. Depreciating assets as car costly dresses are no more your priority. You better like to invest in wealth building purchases such as gold, property, shares etc.
These 10 parameters are just to check how far you need to in order to attain a stable Personal Finance. Budget Plan is one of the most important factors which acts as a ladder to reach that summit. Only attaining a financial freedom is not what one should aim to, being consistent with the finance is also a considerable success of any individual.