Understanding Financial Stability
Mel from brokeGIRLrich / February 23, 2018
At times, achieving financial independence might seem too tough or absolutely unreachable. However, after exploring several personal finance blogs for close to five years and writing my own, I’ve learned that it’s anything but. Even though I see progress in my own life, I understand why financial independence can still feel daunting for many.
If you’re among the ones finding it too hard to believe, relax! I’ve created a concept of financial stability and interestingly, it’s not as complex as it may sound. It’s something I came up with, so let’s dive right in.
Picture this; there’s space between “hardly surviving” and “completely financially independent”. I like to call this comfortable financial zone “the phase where little things don’t bother me.”
According to my idea, we go through four financial stages:
1. The Tough Phase: It’s where you begin your journey towards understanding your economics. You could be an 18-year-old figuring things out, or a 35-year-old struggling with debt. At this stage, money translates into stress, with no emergency savings and retirement funds looking like a far-off dream. The positive side is that it teaches you bare-bones survival skills.
2. The Relief Phase: This is about looking at financial independence while wondering how to get there – a feeling I’m familiar with.
3. The Peace Phase: I don’t know much about financial independence or ‘the comfortable zone’, but I assume finances aren’t a major worry there.
4. The Forgiving Phase: This is where I encourage everyone to aspire: the stage where ‘little things don’t bother me.’ Here, money stops being a constant cause of stress and becomes just another aspect of life you have to navigate.
Moving from the Tough Phase to the Forgiving Phase doesn’t happen overnight – it’s a gradual transition. Little by little, you build an emergency savings fund, get ahead on your bills, and begin making long-term financial plans (like saving for annual car insurance). Stress reduces bit by bit.
Eventually, you’ll find yourself in a position where money rarely gives you a headache. There will always be challenges, but solid financial habits will keep you standing.
Recently, I’ve enjoyed some great moments in this Forgiving Phase. For instance, I was able to take care of a sinus infection immediately without worrying about the bill. I rented a car for a day full of errands without fuss, bought work essentials and waited for reimbursement later without any stress, and got a new pair of work pants without it toppling my monthly budget.
So, if financial independence still feels too far, remember – you could be just a few years away from reaching the Forgiving Phase, provided you start making small changes now.