From your day-to-day life to your future, life would be much easier when you have good financial skills. Being good with your money is more than just making ends meet. It’s the ability to be financially free now and secure in the future.
You may be struggling with money management issues. Or you are confused why you are still living paycheck to paycheck despite making more than enough money. Fret not, here are a few tips to help you improve your financial habits:
Setting a budget
Many people often don’t have budgeting as a habit because they might think that it is a very tedious and time-consuming process. Other times, they do budget but the habit does not stick. The 50-30-20 Budget Rule makes budgeting simpler and easier. Of your disposable income, you could try budgeting my allocating:
- 50% to your Needs (or Essentials). This pot of money is basically how much money you have to just exist day-to-day.
- 30% to your Savings. So, this pot would be used to clear off any debts, mortgages or put into your savings.
- And 20% to your Wants (or Leisure). From nights out to a shopping spree, this pot of money is for the things that make you happy.
Track your spending
We may not notice it but every-day small purchases can add up quickly and before you know it, you’re over your budget. One way to prevent unexpected spendings is by tracking your spending. You can try setting a limit on your debit cards or using an app to track your every day spending. Here are some budget tracking apps:
- Mint
- YNAB (You Need A Budget)
- PocketGuard
Save up for big purchases
Some big purchases that we want may seem like a need right now, but it might not be in the future. By delaying gratification, this not only helps you become better with money but also gives yourself time to reevaluate if you really need that big purchase. By saving up for it in the future rather than purchasing it with a credit card, you won’t be sacrificing buying your essentials and paying interest on the purchase.
Make sure you’re paying for the best prices
Do not rush into purchasing something as the chances are you could probably find it cheaper elsewhere. By shopping around in similar retailers, you are able to make comparisons and pay for the lowest price. Look for discounts and coupons whenever you can.
Contribute to your savings regularly
Setting a set amount of money to be deposited into your savings account is good for building a healthy financial habit. This ensures that you will be able to afford future financial goals like buying a house and ensure that you have enough money for emergencies.
You may not be used to putting off purchases now or planning your money for your future now. But, the more you incorporate healthy financial habits into your day-to-day, the easier it will be to manage your finances.
