Five ways to increase your financial security
The pandemic has undoubtedly changed the way we think and feel about our financial situation, pushing the boundaries of what we think of as “financial security”. However, despite the negative impact of the pandemic on the financial situation of many people, a recent study shows that 52% of Metro Philadelphia residents currently feel financially secure and 68% of residents are confident in their ability to manage their finances. Philadelphians are known for their resilience, and even during the most uncertain times, it inspires confidence throughout the region that residents are, for the most part, on the path to financial recovery.
Philadelphians focus on the long term
According to the survey, Philadelphians say they are very or somewhat knowledgeable about credit (64%), budgeting (64%) and building a credit history (63%), reporting that residents focus on long-term preparation. Understanding these topics is imperative, as credit history and credit ratings are major contributing factors when looking to make major financial investments such as buying or leasing a car or business. a house.
On the other hand, respondents say they are not very or not at all informed about paying for studies (27%), bank loans (26%) and investing money (27%). This highlights an area where financial leaders need to redouble their efforts when it comes to financial education, as going to college without confidence in how to pay for education can put young adults on a downward slope. financially slippery, ultimately putting them in long-term danger. .
How to increase your sense of financial security
Despite the level of financial security and confidence expressed in the area, there is still work to be done as many residents do not share these sentiments. And while it may seem like an uphill battle, financial security is more attainable than you might think.
Here are five ways to achieve financial security for yourself:
- Define what financial security means to you.
Financial security can mean a lot of different things depending on who you ask, so before you write off feeling secure for yourself entirely, figure out what it means to you. Does that mean you have enough money to cover your bills each month? Or that you have enough extra money to spend freely once your bills are paid? Does this mean you have no outstanding debt? Or that you have a structured payment plan to pay off your debt?
- Develop a plan.
Identify areas of your financial situation that need improvement or that would make you feel secure and confident, whether they relate to your saving and spending habits, earning more money, or something else, and strive you to achieve these personal goals. You may find that you are in a better position than your doubts and worries lead you to believe.
- Start small.
If financial security for you means having a healthy emergency savings account for a rainy day, then start small to build that account. Contribute regularly to the account so that it can grow with interest, but be careful not to overwork yourself, as this could cause instability in other areas of your finances.
- Regularly assess your situation.
Now more than ever, lifestyles, incomes and financial responsibilities can change on a whim, so don’t dwell on feelings of financial insecurity you may have had from the past. Set benchmarks over time so you can re-evaluate your situation and set new achievable goals. And don’t be too hard on yourself if you haven’t reached a goal you hoped for, because you can only keep moving forward and doing better tomorrow.
- Invest in yourself.
Take the time now to educate yourself on the topics you are unsure about. If you are unsure of your ability to save or invest, consider consulting a professional who can guide and educate you through the process. Consume educational content in your spare time, such as webinars hosted by financial institutions, blog posts, short videos, and more. Your financial literacy is something that can never be taken away or lost during an economic downturn, so perfect it and use it!
You should not compare your financial situation or your feelings to those of others, because everyone is unique and has a different perception of what security means. Take it day by day and enjoy the sea of digital educational resources available at your fingertips. Before you know it, your financial anxiety will begin to subside and you will feel a sense of pride in your proactivity in achieving financial security.
To view the full research report, visit the PFCU website.