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August 17, 2021

Five ways you can achieve financial security

Plus insights into how the pandemic has impacted Philadelphians' financial security

Personal Finance COVID-19

Content sponsored by Limited - Philadelphia Federal Credit Union Sponsorship Badge

Limited - 2021 Financial Security Check-In Philadelphia Federal Credit Union/for PhillyVoice

The pandemic has undoubtedly changed how we think and feel about our financial situations, pushing the boundaries as to what we consider “financial security.” However, despite the pandemic’s negative impact on many people’s financial situations, a recent survey shows that 52% of Philadelphia Metro Area residents currently feel financially secure, and 68% of residents feel confident in their ability to manage their finances. Philadelphians are known for their resilience, and even during the most uncertain of times, this instills confidence throughout the region that residents are, for the most part, on the road to financial recovery.

Limited -  PFCU Survey - Sentiment towards managing finances

Philadelphians are focused on the long term

According to the survey, Philadelphians say they are very or quite knowledgeable about credit (64%), budgeting (64%), and building a credit history (63%), signaling that residents are focused on preparing for the long term. Having a firm grasp on these topics is imperative, as one’s credit history and credit scores are major contributing factors when looking to make significant financial investments such as buying or renting a car or house.

On the flip side, respondents say that they are not very or not at all knowledgeable about paying for education (27%), bank loans (26%), and investing money (27%). This highlights an area where financial leaders need to double down on financial education efforts, as attending a higher education institution without feeling confident in how to pay for education can start young adults on a slippery slope financially, ultimately putting them at risk in the long term.

Limited - PFCU Survey - Levels of Knowledge

How to increase your sense of financial security

Despite the region’s expressed level of financial security and confidence, there is still work to be done, as there are many residents who do not share these sentiments. And while this may seem like an uphill battle, achieving financial security is more attainable than one might think.

Here are five ways you can achieve financial security for yourself:

  1. Define what financial security means to you. Financial security can mean many different things depending on who you ask, so before writing off the feeling of security for yourself entirely, determine what it means to you. Does it mean you have enough money to cover your bills every month? Or that you have enough ancillary money to spend freely after your bills are taken care of? Does it mean that you don’t have any outstanding debt? Or that you have a structured payment plan to pay off your debt?
  2. Map out a plan. Identify areas of your financial situation that either need improvement or would make you feel secure and confident—whether related to saving and spending habits, making more money, or something else entirely—and work towards achieving those personal goals. You may find that you are in a better position than your doubts and worries have led you to believe.
  3. Start small. If to you, financial security means you have a healthy emergency savings account for a rainy day, then start small in building that account up. Contribute to the account regularly so it can grow with interest, but be careful to not overextend yourself, as this could spark instability in other areas of your finances.
  4. Evaluate your situation on a routine basis. Now more than ever, lifestyles, incomes, and financial responsibilities can change on a whim, so don’t get hung up on feelings of financial insecurity you may have from the past. Set benchmarks for yourself over time so you can reevaluate your situation and set new, attainable goals. And don’t be too hard on yourself if you didn’t achieve a goal you were hoping to, as you can only continue to move forward and do better tomorrow.
  5. Invest in yourself. Take the time now to learn about topics you feel uncertain about. If you’re not confident in your ability to save or invest, consider consulting with a professional who can guide you and help educate you along the way. Consume educational content in your free time such as webinars hosted by financial institutions, blog posts, short-form videos, and more. Your financial literacy is something that can never be taken away from you or lost amid times of economic downturn, so hone it and use it!

You mustn’t compare your financial situation or sentiments to those of others, as everyone is unique and has a different perception of what security means. Take it day by day, and take advantage of the sea of digital educational resources that are available at your fingertips. Before you know it, your money anxiety will start to fade, and you will feel a sense of pride in your proactivity to achieve financial security.

To view the full research report, visit PFCU’s website.