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Essential Financial Planning Habits

They say old habits die hard, so imagining what happens when you cultivate good habits from a very young age for your finances isn’t difficult; it’ll be fantastic for you and the rest of your life as you go along. Here’s a list you can take reference from.

Be realistic with your wallet

It’s always important to have a number in your head; a budget that can help you take care of your finances. This budget helps to cater to your basic daily needs so bear in mind that this budget is always changing, just as our needs and life plans are. This goes hand in hand with your financial plan as we move into different stages of life. Prioritise your goals based on this budget and if that optimistic surplus appears while you’re planing that budget, think about how you can use that money, to make more money. The most important advice I can offer with regard to this though, is to never lie to yourself. You’re making these financial plans for yourself. There is no one to show this off to, so be honest with what you have, and what you don’t have. With diligence comes success, so keep that in mind and you’ll always be on the right track.

Spend less, save more

You laugh, but this is the very basic rule for anyone that’s ever made a lot of money. The rule is simple; spend only what is entirely necessary and save the rest of what you have. The idea behind this is attaining the ability to save money while those savings can one day contribute to the downpayment of your house or car. Another place to consider is into your wallet, and at your credit cards. Pay attention to the rates, and where to get certain discounts at places you’re most likely to purchase essentials that you will need often. Another thing to consider is setting up a savings automatic transfer arrangement with your bank. This is where a portion of your money goes into a separate savings account every month. Remember, it’s the ability to save more than anything. Start the habit, and you’ll go a long way.

Don’t borrow money

The chief of this sin that makes you very quickly an accomplice is your credit card. Being in the comfort of your own home with a credit card paves way for the possibility of one activity; online shopping. We all know that’s a dark, dark hole and just like credit cards, it can be hard to stop until a huge wall of debt greets you at the end of the month. These debts, lead you to borrow money, and more money. It’s very much like quicksand. Always forecast your needs and take a reasonable amount of time to make the changes you need with your finances. Remember this, that with the exception of that HDB flat or desired dream home, you should do everything in your power to avoid borrowing money.

Have a plan

This plan helps you to take a look at how you can follow through to achieve goals such as getting a home, getting married, starting a family and saving for the goals you set. In other words, this plan will make sure that you are well on your way to success. Having such goals and milestones keeps you focused and acts as a catalyst to making sure you do not sway from your plan. It’s an easy plan that not only helps to set your goals, but also a rough overview of your financial situation; what you own, how much you earn and can earn, how much you spend, and how much you can save. While you’re at it, decide where your money goes in portions; entertainment, food and transport, bills, miscellaneous expenses and savings. Stick to it and everything should fall into place. It’s important that you habitually review your plan as our needs and life stages change as time goes by.

A little goes a long way. Creating an extensive list of these habits not only makes good headway for the future, but also gets rid of your bad habits. You’re welcome.