Defining (and Reaching) Financial Security

Most of us have at least a vague goal of reaching “financial security” at some stage of our lives. But what is financial security, exactly?

We have to know that before we can get there. In fact, defining it is part of the process of becoming financially secure.

Start by thinking about what a financially secure future would look like for you. What would that future include?

It might include things like:

  • Having a paid-for house
  • Having adequate insurance
  • Having a well-funded emergency fund
  • Being out of debt
  • Having a steady income
  • Being worry-free when it comes to money
  • Etc.

Once you have things clearly defined, it’s easier to prioritize each aspect of financial security. You can then break them down further into the step-by-step actions you’ll need to become financially secure.

Big goals are most easily achievable when they’re taken in small, day-to-day steps.

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8 comments

  • Enjoy your post.To me,financial security is very similar to finiancial freedom.To get finiancial freedom,most of my income must be passive income.So I always try to get passive income as possible as I can.

  • Yep, babysteps! Eventually we’ll all get there! :)

  • Financial security is Financial Freedom… Being free to pay bills, enjoy good times, travel, and to give. This is what financial security means to me and that’s part of what my journey entails on my lifestyle development blog.

    Great thought provoking post.. Keep up the good work.

  • Dear Jackie:

    Defining goals is key, otherwise you will never know if you have reached them. Moreover, it is crucial to make them important and personalized to yourself. Many people define their goals in terms of other people, which eventually will make them very frustrated.

    But then once again, it comes down to your values and what makes you happy – another piece of the puzzle missing (hopefully not)

    Simple things are not that simple :)

    Thanks for a reminder to set and define my own personal goals!

    Best,
    Tomas

  • Great post. I think sometimes we get so mired down in day to day activities that we forget to set goals for ourselves. I am currently working towards 3 goals on my financial security checklist and while there are setbacks, I can see improvement every day. It is a great feeling to know you are working towards the bigger picture but having a sense of accomplishment by completing smaller goals is motivation to continue to work on it all.

  • Darni & Jason, I feel the same way about financial security being very similar to financial freedom.

    MoneyReasons, yup!

    Tomas, you’re right, defining goals is paramount, especially doing so in a detailed manner that fits with your life, values, and dreams.

    Kate, oh I like the idea of a financial security checklist! (And especially visualizing myself checking things off on it…)

  • My first goal was to get out of debt, which is fairly easy to define.

    Then, I kind of went into a funk cuz I didn’t know how to effectively use the extra income I then had in my life. It took awhile before I got on track

    You must plan this stuff out and hold yourself to it to be most effective.

  • David, it’s funny how sometimes it takes a while to figure out what to do with extra income isn’t it? Glad you got back on track.