One major lesson that I can safely say most of us have learnt from 2020 is the importance of having financial security. No one expected that we would be living in the midst of a global pandemic. We did not predict that we have to endure lockdown/quarantine or that we would lose our jobs or experience salary reductions. Therefore, I think it is important to take steps to get our finances in order, right now.
9 Financial Habits To Adopt
- Set financial goals.
- Keep track of your income and expenses.
- Create a budget that works for you.
- Pay all your fixed expenses on time.
- Put away your savings before covering your variables expenses.
- Be mindful of your debts. Keep track of who you owe, how much you owe, interest rates and ways available to reduce your debt.
- Automate your savings.
- Create an emergency fund.
- Educate yourself about finance.
15 Money Saving Tricks
- Set a savings goal. How much do you want to save and for what?
- Automate what you can by sending money immediately to your various savings accounts when you get paid.
- Cancel automatic subscriptions and memberships that you do not use or choose a cost-effective plan.
- Prepare for grocery shopping in advance with a list and spending goal.
- Cook more food instead of buying food.
- Mindfully take advantage of sales and discounts. Do not go shopping simply because there is a sale.
- Forsake the brand names and go with the generic brands.
- Look for quality over quantity when shopping for clothes and other items. It will come out better in the long run.
- Spend bonuses or unexpected money wisely.
- DIY what you can.
- Take advantage of the library and read books for free.
- Keep track of your spending so that you do not go over your budget.
- Shop online mindfully. Consider waiting a few days after adding items to your cart before going through with the purchase.
- Consider a staycation instead of a vacation. This can be just as fun and relaxing as travelling abroad but less expensive. You also get to explore and learn about your country.
- Cut back on frivolous spending. Why not make coffee instead of buying?
7 Budgeting Tips For Beginners
- Plan your budget with your significant other or an accountability partner.
- Learn about the different budgeting systems and tools to find one that works for you.
- Start with your fixed expenses and make your debts a top priority.
- Define your savings goal.
- Create a cushion in your budget for unexpected occurrences.
- Track your progress but do not be to hard on yourself if it is not going as planned. Budgeting is trial and error.
- Remember that every month is different so adjust your budget to suit.
4 Must Have Savings Accounts
- Emergency Fund. This is absolutely essential since it creates a buffer in the event of job loss, injury or some other form of emergency. Note this is to be used for emergencies only and should cover at least three months of basic living costs. It should be available for use when needed but not easily accessible.
- Retirement Fund. This needs to be started as early as possible and placed in a high-yield account where it can incur compound interest. This should not be touched until it has matured. Consider it unavailable until retirement.
- Long-term Savings Account. This is for investments five to ten years in the future such as buying a home, planning for a wedding or some other life-changing event. This account should be accessible without penalty when needed but not readily available.
- Short-term Savings Account. This should be readily available and used for things you want under a year such as vacation or a laptop. Consider using multiple accounts for your different saving goals for easier tracking.
Securing our financial future can seem challenging but with the right information and help from experts, it is possible.
Thank you for reading. Kindly leave a like and comment your tips.
Love generously, Inspire daily, Learn constantly.