Top 3 Healthy Financial Habits That You Must Practice
Many professionals are unsatisfied with their lives because they feel like they are going nowhere, despite the years of working hard and earning money. This is likely because the majority of the population still lacks financial literacy.
Remember that not all successful entrepreneurs were born rich. Most of them have just mastered the art and science of handling their finances. It is something they did not learn overnight but also not something they started in healthy financial habits to reach that level of wealthiness.
Even if you inherited billions from your parents, you would still run out of money if you don’t know how to handle it well. In this article, we will share three healthy financial habits that you must start practicing before you get stuck worrying about money.
1. Live a Life You Can Afford
Do you have multiple designer bags or numerous cars but still pay for an apartment rent? If so, you might need to rethink your decisions in life, especially when it comes to your spending habit. Why would you want to impress people who have less money than you? Instead, redirect your focus to things that you need more right now.
In fact, a car can cost as much as a small house that you can live in for the rest of your life. Purchasing small, expensive things can give you the ability to invest in things that you most need at the moment. But don’t take it wrong, as there is nothing wrong with purchasing expensive possessions such as a car or jewelry if they are considered an investment or something that can help you in your job or business.
Ultimately, you should always review your cards or give up your credit card if you must. Then, check where most of your money is going, reassess your habit, and restart a more practical lifestyle.
2. Allocate Your Expenses
One of the simplest tips to save money is to allocate your expenses first. Once you receive your monthly income, immediately keep an amount for your electricity, water, Internet bills, insurance, or house helpers. After subtracting all the expenses, set aside a portion to add to your savings account.
Do this every month or more frequently if possible. If you start to earn more, increase the amount of money that you are saving from time to time. Starting with small savings doesn’t matter; what’s important is that you have savings that you can also invest in the future.
Speaking of investment, there are many ways you can invest now. If you were able to keep some money, start putting other portions of your savings in cooperatives or investment entities. Keeping all your money in your trusted bank is safe, though it won’t give you that much profit.
3. Save for Emergency Funds
Have you ever met someone who has travel funds but has no emergency fund? Many people today make the mistake of saving more money for leisure instead of on more important things. Establishing an emergency fund isn’t about expecting bad things to happen but it’s about accepting that bad things can happen, and they are unexpected and inevitable––this is exactly what your emergency savings are for!
Our financial advisors also keep on reminding people to have an emergency fund. Emergencies are usually in the form of accidents and hospital bills are expected to drain all types of savings and will force you to sell even your properties. This is because you won’t be prepared for it and you won’t have a dedicated saving for such an occasion.
Investing may sound like a great idea to you, but it will be hard to follow through if you don’t have money. By considering the tips we’ve shared above, you’ll be able to better control your finances. Instead of spending your money on wants and only spending it on your needs, you can start saving more and be ready for any emergencies!
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