How Does One Achieve Financial Security?

We are all aware of the difficult times people are facing because of the recent credit crisis and the consequential economic recession. Perhaps you, too, are concerned about the financial security of you and your family. Ensuring one's financial security has become the objective that almost all of us are directing our energies towards.

You would be well advised to do the same.

What exactly is financial security? How does one achieve it?

There are three important aspects to weigh when you are assessing your financial security.

i) What you own namely your ASSETS;

ii) What you earn namely your INCOME and

iii) What you spend namely your EXPENDITURE.

In order to understand your financial position, you have to clearly understand your position as far as your assets, income and expenditure are concerned. Let us look at each of these three aspects to see how they affect your financial security and what you can do in these three areas in order to increase your financial security.

ASSETS, what you own, form the foundation on which your financial security is based.

Obviously, the more unencumbered property, valuables and other wealth you possess, the greater is the level of financial security that you enjoy. This is a good time to enhance the volume of your assets by investing in an area such as real estate where prices are currently low and opportunities abound.

INCOME, the second aspect of financial security, refers to the money you earn from a job or business, or money earned as interest on capital or any other source of steady revenue.

This is an aspect that is particularly relevant in today's economic climate, where job security has become a matter of concern for many, especially in industries that have been hard hit by the recession.

If you feel that there is no guarantee that you will still have your job in a few months' time, you would be wise to look for alternate sources of income, such as a home- based business, or network marketing, which can and has proven to be profitable for many.

EXPENDITURE, the one area where only you have control and can make a lot of difference. Remember the saying " A PENNY SAVED IS A PENNY EARNED" ? This is particularly true in these trying and uncertain times.

To improve your financial security, spending less and saving more is the 1st step to take.

Spend selectively. Make every dime count. Opt for value-for-money alternatives each time, all the time.

When your income, assets and expenditure are well- balanced and in harmony with each other, your financial position is secure. This is the ideal situation to strive for.

Source: How Does One Achieve Financial Security?