6 Levels of Finances or money
Finance is the management of money. It includes activities such as investing, borrowing, lending, budgeting saving, and forecasting. There are levels of finances. This much depends on where you are. Do you know all the levels of finances? Do you know what level of finances you are and what is your target? Here we will learn the six levels of finance.
At this stage, you are depending on others to pay bills. This mostly applies to school-going, students. But if you depend too much on people to pay for your bills, you might become a burden to them.
This is a terrible stage. You have to live from hand to mouth. You have a job that can only feed you, family. This applies to people who rely on their jobs to pay all their bills.
To be termed as financially stable, there are a few visible things. 1. Your income is greater than your expenses. 2. When you have cash that can sustain you for at least six months. If you have fulfilled the two conditions, you can comfortably say that you are financially stable.
This is a level or stage where you have too much revenue coming in such that you have extra to set aside. You have extra money that can sustain you for at least two years. Two years living in cash. Who would not love that?
This is a level where your investments are working for you. You do not need to do any work to pay your bills. It simply means that you have the income to sustain yourself and your family for the rest of your life. Cool. Right?
This is a level that you have acquired too much wealth. Your finances are not only circulating to you but also other people. At this level, you can offer grants to people become a donor or you can even sponsor different ideas.
It does not matter where you are right now with your finances. The best thing is to keep making progress to the next level. Keep generating ideas. This way, even people around you benefit a lot.
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