Just like any other goal many people definitely has a goal to be financially stable. There are many instances that people failed to accomplish financial objective.
I’ve been researching on this topic from many days and sorted some important things that one should have to practice as a habit to be financially stable. Though to be financially fit it need lot of patience and diligence.
Here are 13 essential simple habits which one must practice day to day life to stay financially success.
1. Always be in Budget
Making a budget means to make a plan for the usage of the available fund for the future. Making an appropriate budget and sticking to it is the essential thing for fetching financial stability.
A good budget makes managing money effectively and reaching financial goals more of a certainty.
2. Evaluate your Expenditure
It’s very important to track all your expanses for a certain period and comparing it with budgetary figures. Merely preparing a budget will not be useful until and unless figure out difference. Tracking expenditure makes a person to understand the level of adherence to budget. A budget should usually prepare at the starting of the month/quarter/half yearly and track actual expenditure at the end of the month. Whenever one finds variations in it, it must be focused and vowed not to repeat.
3. Control your Impulse Spending
Impulse spending means getting thrill to buy an item that you want, without any delay. But this is definitely not something you needed, or even something you intended to buy. This is one of the biggest problem of us on restaurants, stores and online purchases. Giving in to impulse buying is not only drain your wallet in the short term, but the habit prevents you from developing good financial practices in the long term.
4. Make Savings
This should be your top priority, especially if you don’t have a solid emergency fund yet. Money in savings provides a safety net for unexpected expenses.
Saving money forces us to spend less than we make. And when the time comes for a major purchase, you’ll be glad you’ve been saving up. The old & famous proverb says ‘Save for a rainy day’ conveys the same. A persons financial fitness depends on his level of savings in every transaction.
5. Emergency Fund
An emergency fund is money saved for any unexpected expenses. The actual amount varies from person to person, but it should contain minimum of at least 3 months living expenses. An emergency may be in any form such as medical emergency, job loss, home repair, events, urgent travel etc.
Every person must have this fund especially for everyone who has a family. The persons who don’t have such funds are forced to take loans which are costly, this disturbs their future financial life.
6. Diversify the Source of Income
If you really wants financial independence than it should be on the top of your list. Income must be increased with the passing time. If you are a full time employee then you can start a side income by doing business or part time job. A person with business also can diversify his income by growing his business by adding more products, branches etc. A passive income is a compulsory for the financial growth. Now a days there are multiple ways to get passive income.
7. Invest for Future
Investment is very much important to secure future life. To grow financially solid, a person has to invest money. If a person doesn’t investing his money, it simply means forgoing opportunities available to increase his wealth. Sometimes, there are chances to lose money, but one should think wisely before taking a investment plan. There are many ways to invest money such as stocks, bonds, joint venture, business etc. these helps to build your wealth over time.
8. Keep Your Family Secured
If you are head of a family then you become responsible for the well being of the your parents, spouse, children and/or dependents. You should take proper family health & life insurance to cover all members. Initially, it burdensome to pay all those premiums but remember that it saves you from massive expenditures in future.
9. Diversify Your Investment
One should diversify their investment as like income to balance risk attached to that investment options. When you invest in different platforms, you can be guaranteed that all of your investment will not go in vain. But in order to diversify correctly, you need to know what kinds of investments to buy, how much money to put into each one, and how to diversify within a particular investment category.
10. Eliminate and Avoid Debt
The most important consideration when buying on credit or taking out a loan is whether the debt incurred is good debt or bad debt. One can say home loan, education loan etc as good debts in another hand a credit for travel, fun or shopping are considered as bad debt. If you had availed both good and bad debt, than first try to eliminate bad debt because limits chances to get funded.
To eliminate debt list all your debt portfolio and start removing it by larger to small, this could take several years, but it’s a very rewarding process and very necessary.
11. Pay bills immediately
One good habit is to pay your bills as soon as they come in. Also, as much as possible, try to get pay your bill through automatic deduction. Even if one bill skipped from mind, you have pay your hard earned in fines. Add due dates to calendar in order to get remainder.
12. Stay Healthy
I strongly believe that our physical & mental health decides our financial wellness. You may not able to apply your plans/reach your targets until and unless you stay fit both physically and mentally. Taking a good care of health is a way to being not only physically healthy but financially healthy too. Living balanced lifestyle will protects you from threats that spoil your financial freedom.
13. Be an active learner
Keep yourself always ready to know new things. This habit makes you updated in personal finance plans, government schemes, tax saving methods and investment options.
The process of financial planning must start as soon as one starts earning.. When you understand the importance of financial planning and plan accordingly, you will certainly attain your financial goals without any hardness.
