Good habits are the guaranty of your healthy lifestyle. And healthy financial habits are the roadmap to your wellbeing and successful lifestyle. Smaller habits impact a lot on life and way of living in which good money habits play a vital role in improving your confidence level. It is proved that making money is easy but managing money and ensuring the economically sustainable lifestyle is one of the most difficult tasks of life for everyone.
Your whole planning for a bright future is valueless, if you have not included the ambitious money goals in your planning list. Including financial management in every decision about your life and future is the key component of a successful strategy.
Financial management is the way of dealing with your income, expenses, liabilities, and saving. Financial management refers to the organizing, directing, and controlling of financial undertakings according to strategic planning, in any business as well as personal life. It is the first step to improve your wealth rank and improving the economical position.
Financial management is the road map of making decisions about your money and increasing the investment to get more benefits. According to financial rules, there are three types of financial management decisions. 1. Capital Budgeting, 2. Capital Structure and Capital Management System. Strong financial management will maximize your wealth rank.
Money Habits Matter
Your all good and bad habits impacted the targets, which you accomplished day to day, it depends upon your planning and strategy of your financial management that your habits are impacting positively or negatively. The healthy financial habits can be a game-changer in your life when you are determined to keep your life in order and make your money work for you, seek to follow these healthy financial practices from TODAY onwards.
12 Healthy financial habits you need to start right now
There are many ways you can improve your economical position and wealth rank, here are 12 important healthy financial habits you need to start now. These are game-changer habits, within one year your economic growth graph will encourage you to follow and promote properly in your life and business.
Following are the some most important twelve (12) healthy financial habits which can be the guaranty of your bright future, are you agree to start now;
- Respect your money
- Keep a money diary
- Use banking alerts
- Set up your savings automatic transfer
- Track your pending
- Prepare budget
- Switch from credit to debit
- Start Investing
- Build up an emergency fund
- Find extra ways to make money
- Say ‘No’ To Yourself
- Be a money goal-setter
Respect Your Money
Lakshmi is the Goddess of prosperity, success, happiness, and wellbeing in Hinduism. She is one of the most prominent worshiped deities in Hinduism. So, therefore the money is also called the Lakshmi because, without Lakshmi (money), life cannot function appropriately.
Respect your money and don’t waste it in your negative habits of fulfilling your desires, because desires are the key reason for suffering a lot in life.
Respect your money doesn’t mean to worship your money but it means understanding the importance of money in your life which includes taking care of your income, expenses, and investments. When you will respect your money, it will return you wellbeing, prosperity, and a healthy lifestyle.
Keep a money diary
I don’t believe in soft money diary except for online financial software, because the soft record can be changed any time also it can be changed many times. I prefer hard copy or finance register or budget book as a money diary and permanent ballpoint for recording the money. Always remember that there is no trust in money only and only an accurate record of money is the perfect evidence and proof of your money.
Record your income (all types of income including minor and major earnings) that comes and sources (where from your income comes) of your income. It is one of the healthy money habits which will support you to prepare your budget. keeping money diary is the healthy money habit that will keep you safe from short of cash or run out of many, buy on impulse. It is the one smartest trick to keep a money diary to find out how you spend your money. Once you start keeping a money diary you can notice you like to keep track of your income. Keep the record of your money and don’t miss recording the date, month, and year of receiving and spending. The money should be updated daily basis, it will support you to verify the warranty and guaranty dates of your electronic items.
Use banking alerts
Most of the people are using net banking in developed countries but few people are the use of net-banking in developing countries, same as most of the peoples don’t use cheque except some important evidence-based transactions. The banking alerts are the right time signal of tracking the debit and credit in your bank account. Follow this healthy money habit and log in to your net banking App now and set up following some important banking alerts.
Sign in alert: Whenever you sign in your net-banking account you receive a text message on your personal cell phone that you are signed in or you are signed out.
Credit & Debit account alert: On your credit and debit alert on your bank account.
Profile password changes: Whenever you change the password of your net banking profile, the bank must alert you about it. This healthy habit will keep you safe from hackers.
Big purchases happen: You must pay attention to the extra zeros on your spending for this you have to be updated about every transaction of your account. But you must be well aware of your transaction when your other family member has to access to your account. You must on big purchases alert on your account.
Also, you must activate an alert for ATM withdrawal exceeds a certain amount, Account drops below a specific amount and Any debit card purchase occurs.
Set up your savings automatic transfer
It is a standing banking agreement with you whereby transactions are made automatically and frequently under defined conditions between your two or more accounts. It is the best habit to commit to building your emergency fund or retirement fund.
Set up your savings automatic transfer is also called the paying yourself first. You have to set an appropriate amount of your every income to transfer in your savings account. I am recommending that don’t activate the debit card and the net banking on your savings account it will minimize the opportunity of debiting money from your savings account. Modern technology is very much supportive, and you can easier set up your automatic saving transfers on every income.
It one of the smart money habits which can help you to manage your retirement investments and reduce the risk of wasting those funds without looking ahead.
Your automatic saving transfer habit will decrease the mental efforts and save your time of calculating the saving and depositing in your savings account.
Remember the banking rules and don’t withdrawal more than the daily, and monthly limit and decrease the paying unnecessary bank charges and tax. Small things matter a lot in your life so follow the rules strictly.
Track your spending
If you are thinking about winning from the money you have to adopt some healthy money habits and change your actions with money. The regularly tracking your spending will provide you an accurate picture of your expenses, it will show that when and where your money is going on.
To identify your expenses before paying off is the first step to your success, so, therefore, prepare the exact list of your spending according to previous experiences and future forecasts. The spending list must include your household, travel, health, insurance, social gatherings, and entertainment expenses. Re-visit your list and don’t miss any minor od smaller item. If you are not recording your spendings it means you are living in a dream world, there is no need to insert money in wallets, but it never goes empty. But remember that the real world is very cruel if you have not money no one will accept your hand so, therefore, the healthy money management habits are very important you need to start now.
Truly saying that my wife is too conscious about this and she is recording daily expenses for many years, it is really helpful for me to manage our expenses. This record always helps me to prepare the budget of the year and prepare my income tax return file yearly.
The planning of expenses against your income for a specific time is called the budget. It is the most powerful tool of a successful life which provides you the grounds of prioritizing your expenses and achieve your financial goals.
If you’re looking to create a personal budget spreadsheet let us start with these simple budgeting steps.
First of all, put your identified income with an income source for creating your personal budget. Don’t overestimate your income put an accurate figure of your income from every source and calculate the total income of the month. Keep in mind the, the income figure must be taken after debiting the automatic saving transfers, don’t add your saving in the budget sheet. And then insert the expenses list (which you have already prepared in the above step “track your spending”) in the column of expenses.
Always keep in mind the inflection rate, emergency, unforeseen expenses, taxes, and bank charges each and everything must be included in the budget sheet.
The best and healthy money habit is to save small money from every bill but never pay over the budget bill of your expenses. Smaller amounts of savings will fill your wallet slowly. The most important point is don’t miss reviewing your budget on a regular basis.
Cut up your credit cards
Reduce the use of credit cards is one of the best habits if you are prone to overspending. Credit cards allow you to spend no matter your account of empty, but you cannot use a debit card with your empty account. The debit cards have a reasonable limit on how much you will spend until your wallet is finished. It means your spending is controlled in debit cards and out of control in credit cards. So, it is a healthy money habit to switch from credit card to debit card.
The credit card is beneficial for using during emergencies but again the credit is not good money habit. If you would like to run away from credit stop using credit cards. The credit card is easy to access purchasing or getting money sometimes is like a wonderful idea, but it may increase your credit level and spending more on unplanned purchases!
When you will cut up your credit cards you will easily stop spending money you if you don’t have, eliminate unnecessary expenses, and stop buying things you don’t need. Remember that live a life without credit means lower debt, lower consumption, and less ‘things.’ Simple lifestyle is also a smart money habit if you agree then follow this healthy money habit right now.
Get start investing as soon as possible, inverting in early and young age is one of the healthy money habits to get good returns on your invested money. There are some common goals of investment such as retirement plan, children’s education, children’s marriage, emergency funds, etc but it also depends upon your society.
If you have a clear and sustainable saving strategy, then you can invest easily because your investment strategy directly depends upon saving goals. But the investment never means the millions of dollars, you can start your investment with very little money. So, therefore, don’t want to come huge money, you can start to invest once you have a little money to play with.
There are many ways to start an investment, here is some important and healthy money habit to increase your investment and getting more income.
Letus start saving to try the cookie jar approach from your home at an early age, aware your kids about this smart money habit. If you have saved a few dollars you must start investing in the stock market, you can start trading, and you can purchase saving certificates and prize bonds. You should dip your toe in the real estate market or put your dollars in low-profit investment markets. You have to purchase life risk cover insurance, children’s education, and marriage plan from reputable insurance corporations.
Build up an emergency fund
An emergency fund is a cash that you have saved for the purpose of cope with any emergency situation in your life, it may be a natural disaster, health problem, a manmade disaster, or as like COVID-19 pandemic a global health disaster.
Remember that all type of saving is not your emergency fund because you can invest you saving in different ways as discussed in the above investment section but an emergency fund cannot be invested in other businesses and plan. It is the money which is only for use in emergencies. The emergency fund can be created by selling some unnecessary items which are available in your house and you have not to need to use that. For example, I purchased a baby cradle, when my daughter was born but now is useless for us no one can use it in my house so I can sell out it and put that money in an emergency fund.
Whenever you would like to make your financial goals and wants to change your economic condition. You have to build an emergency fund, that must be to pay at least 5 months of expenses.
Find extra ways to make money
Never depend upon only one source of your income, it may affect many ways side business or side income is just like oxygen for your financial conditions. Find out the ways to make some extra money can be the game-changer of your life. If you are doing a job than you must invest some money and start the side business, it will make a big difference in your financial plans. There are many ways to make some extra money by doing the extra job, online work, trade-in old phones, electronics for cash, drive for Careem or Uber, Freelancer work as like fiverr, amazon store, or amazon supply, youtube, blogging, find out seasonal work, and the online surveys, etc.
Say ‘No’ To Yourself
Always remember that challenging the ego and succeeding in it requires persistence and saying yourself no is like ego and a big challenge you to adopt this super money habit. But parallel to this it is also proved that you can sell something to yourself easily to sell it to others. You are well aware of your dreams, vision, desires, and strategies of the future so therefore you can be able to yourself no easily. Let us learn to say no to yourself and start it now to say a BIG NO to yourself;
- am not going shopping this Sunday…!
- have not a credit card in my wallet …!
- will never take any loan …!
- am not buying a car on loan …!
- will not be buying extra shoes this month ….!
- Am going to stop hoteling …!
To be a money goal-setter
No matter, how many strong goals you have set for your successful career. But you will not succeed in your life if you have not included the money goal in your strategy of the successful management plan. The financial analysis is like a dream and economic analysis is the reality so try to be a money goal setter and make your life sustainable, self-reliant, and bright future.
The money goal setting is planning for the future generation, to be a goal setter and teach your kids about the power of money and make them a perfect money manager. Start this healthy financial habit right now, and carefully decide that how, when, and where can you put your money in saving, investment, and an emergency fund in the way as your goal is suggesting you. Your financial goal must be SMART (sustainable, measurable, achievable, realistic, and timebound).
Money is not everything but without money, you can get anything except few natural relations and natural free goods. Money is the power, which can play an important role in your lifestyle. It proves you many opportunities and gives the freedom of choices.
So, what do you think about adopting healthy financial habits? If you are agreeing to get more choices in your life, then don’t waste time and follow these smart financial habits right now and get economic freedom in your life.
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Always remember, Only GOD is perfect nothing else. Don’t wait for perfect, take the hand and make it perfect for your relationship. (Lifestyle Guru)
Last Updated: August 15, 2020