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29 July 2020 | 6 min read

10 Good Financial Habits To Follow For Financial Security

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Success comes in many shapes and forms. And unfortunately, it requires a lot of hard work as well. But behind every successful person are good financial habits that have helped keep her on track and financially secure. We all have that friend who seems to have her financial act together more than others. They are the ones who always know how much money to spend, and never seems to be ‘waiting until salary day to get what she wants’ and can easily explain to you what diversification of investments means.

This type of financial mastery doesn’t happen by accident, and these can be counted as impressive financial habits. What’s the trick, though? First, knowing that you are in control of your finances and not the other way around. However, not all is lost because with a little bit of effort and focus, and you can put these habits in place in our own lives. Here are ten patterns a financially smart people always follow for financial security.

They Are Incredibly Self-Aware

Always be self aware

Keeping track of earnings is super important. It can be something as big as their monthly salary or something small as a side hustle done on the Facebook group or through word of mouth? Track spending and expenditure every day is critical both in the long term and short term. A financially smart person knows precisely how much money she earns and its sources. They account for everything and make sure every rupee they earn is working for them. In short, keeping track of your finances is the first for financial independence. Invest in a financial planner to start your journey. Financial habits are essential for growing and diversifying your investments – these habits will help you achieve financial security.

They Plan For Future

Plan for future

A successful person never pays late fees because they are organized and know what is due and when. They know their bills and make sure they are paid on time to prevent late fee charges or fines. They avoid nasty surprises, and though they know that money can sometimes be spent in unexpected expenses, they make sure to plan for them through a different budget.

Similarly, you need to organize yourself as a rule of thumb and be on top of your ‘pay-up’ game. This will smoothen your route to success. You can start a SIP for all your goals.

They Live And Plan Within Their Budget

Budgeting habits

A financially successful person never lives on credit. They don’t purchase above their means and certainly do not live a lavish lifestyle on a low income. They understand the value of money and believe in systematically investing to attain big and small goals without a lot of stress.

Budgeting Is A Way Of Life For Them

Set Goals

Do you know those budget planners that allow just one budget for your whole year? Yes? Throw them out as it is not possible to have the same budget for the entire year. Even if you’re lucky enough to have a consistent income, your expenses change, and most importantly, circumstances change. Be it an electricity bill, a sudden weekend getaway with your gang of friends, going out to dinner with family, or a worldwide pandemic, you need to know how much room you have to spend, and you will not know it unless you have budgeted layer by layer. Budgets that are realistic in terms of spendings {and savings} and account for every known expense are more comfortable to follow and create impactful financial control.

They Pay Debts Quickly

Pay your debt

A successful person knows how much their debts are costing then and pays the most expensive ones off first. Their short-term goal will automatically be to get the ones that cost them the most in interest and finish them off first. They also know the difference between debt with the most owing and debt that is lasting much longer. Pick this habit, so it gives you room to live your dream and not be drowned in stress/debts.

They Prioritize Investments

Prioritize investments

A successful person understands their value, and know the importance of investing in themselves and their knowledge base. While it can be easy to get caught up in sticking to a strict budget and not wasting too much any money on yourself, it is essential to keep yourself motivated. To keep yourself going, it is necessary to reward yourself when you reach your financial goal. Allow money for yourself in your budget – even if it is as simple as a magazine and manicure.

It is essential to feel good and celebrate every little success. It gives you something to look forward to and motivates you to do better as well! You can always increase your rewards with your goals. Hint: Reward vacations are a thing – start your investment journey here.

They Enjoy Their Perks

Enjoy perks

If you’re a financially smart person, then you very well know that you can make your coffee instead of spending INR 300 on a Starbucks coffee every day on your way to work. You also know that you can buy your favourite beauty supplies when they are on sale instead of paying full price and probably use your debit card to fuel up since you have discounts available on it. So don’t shy away from enjoying the perks that are served to you on a platter. Such decisions make you smart, not shabby. Be unapologetic about how to earn your many, even if it means saving it. Most importantly, STOP HAVING FOMO {fear of missing out}.

Their Side-Hustle Game Is Strong

Side hustle

Any financially savvy person has more than one stream of income. In this day and age, where the cost of living is too high for most people, you need to have additional revenue streams just to survive. You can incline towards investments or stocks, and these are two great ways to make more money on the side. If you’re good at something like fitness, baking, dancing, writing, etc. you can start a blog on a social media platform to impart your knowledge and earn some attention as well as money.

You can also pick up a skill from the internet and do a course to become a freelancer. For example, web designing, social media strategy, copywriting, nutrition psychology, etc. Such gigs allow you to build the opportunities that you wouldn’t have had otherwise. It’s a great way to work with companies, network with people worldwide, write or talk about what you love, AND make additional income.

They Save Regularly

Save regularly

You need to have a separate savings account and contribute to it regularly. A successful person knows that they need a backup plan for all scenarios in life. They know that sometimes unexpected things happen that could leave them without a job or income. In such cases, an emergency fund is always handy – whatever the circumstance, they are well prepared to meet it. Similarly, you also need to make smart decisions about how accessible your savings will be at the time of an emergency. You can start a SIP with as little as INR 500 here.

It’s Never Too Early To Plan For Retirement

Plan for retirement

Would you treat your ‘separate savings account’ as your’ retirement account’? You shouldn’t! The savings are for short-term goals, the emergency funds are well, for emergencies, and the retirement account is for you to live it up worry-free after a certain point in life. If you contribute to your retirement fund from an early age, as in during your 20’s and 30’s, you will find it more resourceful.

Do not wait for a long time before starting your retirement fund and learn investment tactics that can stand the test of time. For example, by adding long-term investments into the mix and not relying completely on a ‘Retirement fund,’ you can create substantial savings for the future. Most importantly of all, a successful person doesn’t let money control their happiness! You don’t need a massive figure in her account to feel good about yourself – always keep this in mind.

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