When you were little and asked what you wanted to be when you grew up, you probably weren’t thinking too much about how financially stable you would be. Instead, you were likely dreaming of being an artist, an astronaut, an athlete or chef — and hey, who says you can’t go after those dreams now?
As an adult, you get to make decisions that feel right to you and find ways to achieve your dreams while being financially responsible.
When we think of achieving our dreams, the financial side of it isn’t exactly thrilling. However, living within your means can help you along your journey. In this article, we’ll discuss:
- What it means to be financially stable
- Ways of achieving financial stability
- How credit impacts financial growth
- Maintaining financial wellness and good credit
What does it mean to be financially stable
Everyone is different when it comes to how they view their finances. Your circumstances, upbringing, culture and many other factors contribute to what being financially stable might mean to you.
Broadly speaking, being financially stable means you feel good about your financial standing. This could mean you have a rainy-day savings account for emergencies, or that you're able to pay your bills on time. It could also mean that you've earned a decent credit score, which may help you land a credit card or car loan with good terms. For some, it could mean you have few (if any) debts or outstanding balances you owe.
Being financially stable doesn’t necessarily mean you have all the money in the world — rather, you can take care of yourself and your family without feeling a heavy burden or impact on the lifestyle you want.
Ways of achieving financial stability
If you’re not feeling confident about your current financial standing, that’s okay! Your journey may come with its ups and downs. If you're looking to achieve financial stability, start small. You don’t have to meet all your goals at once. Begin by evaluating where you are now and where you would like to be in the future and start taking the steps to get there now.
Enroll in Chase Credit Journey®
One way you can visualize your goals is by enrolling in Credit Journey® and to check your credit score — for free! If you'd like to improve your score, try using the credit planning feature. You can set a credit score goal and receive a personalized action plan provided by Experian™. This plan gives you a list of action items you can start today to improve your credit score over time. Using Credit Journey and its features can facilitate healthy financial habits that can lead to an improved credit score — and a good credit score can often be a sign of financial stability.
Set goals for the future
As you start your journey, be sure to take small steps towards your goal. Set aside a specific amount of funds to save each week. Assess your budget to see where you can cut unnecessary expenditures or look ahead to plan for future life events such as having a wedding or owning a home.
Be consistent with payments
What will be crucial to building financial stability is to also build consistency with your payments. Making your payments on time can be a difference-maker when it comes to having a good credit score and being in good standing with your lenders. Since payment history is a major factor considered when calculating your credit score, improving your payment history will make a significant impact.
Live within your means
Another way you can start achieving financial stability is by living within your means. But what does this even mean? Take it from artist Sue Tsai, who explained it in an episode of the Credit Talk podcast: “Living within your means to me is just basically really having self-awareness of where you are financially. It's being really real with yourself and understanding how much is coming in and how much needs to be going out.”
How this looks can vary from person to person, whether you’re making a consistent salary or you’re an artist working off commissions. “When we talk about art, sometimes it's so much coming in and sometimes it's nothing,” Tsai explained. “And then when you first get that first taste of these big checks, it's like you automatically want to be more frivolous with your spending. And I've definitely learned my lessons there where I still have to maintain something and not just overspend.”
You can keep a watchful eye on your score when you use Credit Journey with score refreshes. Being on top of changes to your credit is an important aspect of living within your means. “That's been like the key thing, managing my expenses...Another thing that I do is that I have alerts for all my credit card charges, which is really important,” says Tsai.
With Credit Journey, you won’t be alerted of all credit card transactions, but you can enroll in identity monitoring and credit monitoring alerts so you can keep abreast of any suspicious financial activity.
How credit impacts financial growth
A good credit score can give you the opportunity to achieve financial growth. It may grant you access to higher credit limits, loans with better annual percentage rates (APRs) and more purchasing power. All of these factors contribute to your financial growth, not just the funds you have or the money you make.
Maintaining financial wellness and good credit
You’re about to set off on your dreams — whether that’s opening a restaurant or becoming a singer, teacher or artist. Whatever your dream is, make it even better by preparing ahead of time. This way, you can maintain your financial standing if times get tough or income becomes unpredictable.
You may go through periods where you earn a lot, and other times when money is tight. Keeping a healthy balance and finding options that work best for you can help you maintain good credit and financial stability. By living within your means and staying savvy about your spending, you’ll build a solid foundation as you go after your dreams.