Financial stability is something we all desire, yet in today’s economy, it might actually seem more difficult to achieve. With increasing costs of living and fluctuating job markets, the unexpected might happen and could even put your financial stability in danger. It could be debt, retirement worries or simple bills… There is a universe of things that might put your financial stability in a bad way.
Here are 10 ways that your personal financial security might be challenged these days.
Featured Image Credit: Pexels.
Job Insecurity
Employees don’t enjoy the same job security today as they did in the past. Companies are laying off many workers, automating many jobs, and moving jobs overseas. This means that your current job might be at risk if you don’t keep up and work hard. Even if your job is safe today, it might not always be. Unforeseen circumstances can force companies to make changes that affect you. When job security is unstable, your ability to provide for your family becomes unpredictable.
Rising Cost of Living
Everything – rent, groceries and so much more – is costing more, so if your income isn’t growing at a similar pace it can become difficult to make ends meet. You might stop saving for the future and end up dipping into savings just to pay essential bills — which can make it ever harder to become financially secure over time.
High Levels of Debt
Be careful what and how much debt you take on. Too much debt can be a burden. It doesn’t matter if that debt is from student loans, credit cards or a mortgage. If you cannot afford to pay debt off regularly and on time, that daily or monthly reminder will cut deep into your income. If you’re just making minimum payments, then interest accumulates quickly — so you never feel like you’re getting anywhere. That’s a terrible thing, since it makes it harder to save money or invest in your future.
Market Volatility
Investing in the stock market can be a good way to get a high return on your money. However, if you’re just throwing money into the market without knowing what you’re doing, your money could easily disappear. The market is volatile, and in a down year you could lose a lot of what you invest. If you’re planning on using this money for retirement or anything else long term, market volatility can be a big threat to your livelihood. It’s best to get professional advice tailored to your situation and goals. Always diversify your investments.
Health Care Costs
Medical bills can be a huge financial strain – especially when you have no insurance. Catch a bad illness or break a bone, and you can be facing expenses with a seriously high price tag. Without a foundation to fall back on, finances are going to suffer as you try to crawl your way back into the light. Invest in good health insurance to safeguard yourself.
Lack of Emergency Savings
When you don’t have an adequate safety net to protect against a personal calamity, you run the risk of being taken by surprise when your car breaks down, you lose your job or face a medical emergency that you don’t have enough savings to cover. The bill can keep mounting, creating a downward spiral of mounting credit card debt that is that much harder to recover from.
Retirement Uncertainty
Saving for retirement is more crucial than ever, yet many have no sense if they are saving enough or not. With pensions a thing of the past and the future of Social Security still uncertain, more pressure is being placed on the average individual to save for their own retirements. If you do not save enough or if your investments do not do well, you could find yourself stuck in the later years of life — without enough income to comfortably enjoy your retirement.
Dependence on a Single Income Stream
It is not advisable to put all your eggs in one basket. If you lose your job or find yourself without an income for some reason, your life comes to standstill and you’re left with no money at all. Having more than one source of income will help. If you have a side job or are making a profit off your investments, you will have a cushion to rely on.
Unstable Housing Market
If you own a home, falling property values cost you equity in the single biggest asset you hold. If you rent, climbing rents make stable affordable housing out of reach. Even if you’re buying, selling or renting, you have no better way to see into tomorrow than everyone else busting their budgets to compete for housing in a tight market.
Political Instability
We live in a volatile political environment. Political events, whether global or domestic, can have an impact on the financial markets, your job and the economy, often within the same general time frames. For example, a new policy or law, or the likelihood that one may be implemented, can spark strong reactions in the stock market; political events can cause fluctuations in one industry over another.
Disclaimer – This list is solely the author’s opinion based on research and publicly available information.
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