Stability, especially financial stability is something everyone aspires for before one thinks of creating substantial wealth. So, we look for ways to earn or generate income that lets us maintain a comfortable lifestyle without having to worry about the next paycheck.

Financial steadiness is having enough money to be self-sufficient and debt-free with an established plan to accomplish ones financial goals like owning a house, or car, traveling globally, saving to send the children abroad, wedding expenses, and retirement.
 
Unfortunately, people struggle to achieve financial stability despite not facing many financial emergencies. Overspending and increasing debt often keep people from succeeding. It is especially true when natural calamities like a hurricane, an earthquake, or a pandemic can disrupt every plan one has and jeopardize savings.
 
In the US, the concept of F.I.R.E. - Financial Independence and Early Retirement is very popular. However, a survey revealed that 80 percent of Indian investors are unsure about retirement planning. Millennials aspire to be financially independent and retire in their 30s or 40s so that they can live fulfilling lives. This trend is catching up in India too.
 
If you are keen on achieving financial balance, then here are 7 habits that will help you achieve it:
 
Set Objectives
 
Achieving financial independence is a goal, but it is vague, and it means different things to different people. An investor must set specific, achievable, measurable, genuine, and time-bound goals. Being as detailed as possible can make achieving goals simpler.
 
Put down answers to these three questions – What is your lifestyle like? Do you have enough to support your lifestyle? At what age do you need the money? Once investors have answers to these questions, they can set up smaller milestones at regular intervals and track them. For instance, an investor may want a corpus of 45 crores over a span of 30 years. Here the goal has a specific time limit and a measurable factor – the corpus amount.
 
Debt-free
 
Debts can take away the focus from wealth creation efforts. It may be concerning if credit card purchases and high-interest consumer loans make up 30% of the credit limit. Paying off the credit card balance every month is essential. Though other loans, such as student loans and home loans, are low interest, it is vital to pay them too. Timely payments can improve an investor's credit rating. Remaining debt-free is the next step.
 
Save first and spend later
 
Delayed gratification is an investor's friend. It means postponing a purchase or consumption for later. Like Warren Buffet says, don't save what is left after spending; spend what is left after saving. Save at least 30% from the salary and then expend on household and personal expenses. For instance, if one earns an income of Rs 1,00,000 per month, then one should save Rs 30,000 and then use the rest for expenses. As one's income improves, one can increase the amount saved.
 
Make a budget and track expenses
 
Create a monthly budget and follow it diligently. It is one of the best ways to ensure one pays all the bills and savings are on track. Noting down expenses will help one understand the amount of money needed to cover them. In addition, it is an ideal way to identify the costs not required to reduce wastage. Spending on necessities only and saving a large portion should be a mantra one can follow to achieve financial stability.
 
Make your savings earn for you
 
What can one do with the savings? Make it work, of course. Investing your savings in a suitable asset so it can generate money is essential. Money begets money! One can invest in mutual funds, direct equity investments, or other financial instruments based on one's risk appetite, risk tolerance, financial goals, and time horizon.
 
If one is risk averse, then FDs, RDs, or liquid funds can be assets in which one can invest. But if one does not mind taking risks, then equity investments for the long term are a good bet.
 
Diversify your portfolio and rebalance from time to time
 
Do not put all the eggs in one basket. This phrase is the best way to understand why diversifying the portfolio is necessary. Diversify your investments in asset classes like equity, debt, real estate, commodities, fixed deposits, etc., geographies and sectors as each segment and asset has different returns and risks. Don't forget to review the portfolio regularly and track investment performance. One can replace an underperforming investment with a performing asset. Doing so will allow investors to check if they are moving towards their financial goals.
 
Buy insurance and create an emergency fund: Life insurance is a must as it offers a safety net to one's family if the breadwinner passes away. But, life insurance and investments are not the same, so one should not mix the two. Health insurance is vital to remain stress-free about medical and hospitalization expenses. Problems and unforeseen events can happen anytime. So, one must have an emergency fund of 6-12 months of living expenses.
 
Following these seven habits diligently can help one become financially stable. Not only can one achieve financial freedom, but one can also work to retire early and pursue whatever they are passionate about.