A habit is something that we do on a daily basis without thinking. While some habits are good, some are bad too. And it is very difficult to end a bad habit which one has accumulated over a period of time. It might seem difficult, but it is not impossible if you are 100% committed to ending it. This is applicable in all aspects of our life from day to day activities to financial habits.
To improve our financial situation, we have to end our old habits and embrace new ones. The new habit will be helpful over the course of time once you start taking control of money and make it work for you.
So, do you have healthy financial habits? Here we have listed few habits of a financially healthy person; go through it and check if you have these.
Keep a Watch on Your Income and Spending
Keeping a track of your income and expenditure is very important and in order to manage your money properly, you need to have a budget. Through a budget, you can allocate money for all your expenses and save some for your future financial goals such as buying a house, car, traveling, etc. A budget can help you in achieving all that.
Your Spending Should be Less Than Your Earning
It is not a prudent practice to live above your means. Due to this bad habit, people trap themselves in a financial mess and a continuous debt cycle. Instead, if you spend less than your earning then there are many things you can do with the remaining amount such as traveling, making an emergency fund, investment, and savings for retirement, etc. Hence, it is always a better lifestyle to live within our means.
Keep Some Money For an Unanticipated Event
People also call it an ‘emergency fund’. In today’s time, nothing is certain and any unforeseen events can occur any time such as job loss, medical emergency, etc. So, it is better to equip yourself with some money for such events. And you don’t have to do it only one time; every month keep some amount into your emergency fund. It is a continuous process.
If you don’t have money for such events and need financial aid then the only choice left for you is a loan. If your credit score is good then it would be very easy to get a loan, otherwise, you can take bad credit loans with guaranteed approval from direct lenders. There are various lenders in the UK who provide such types of loans.
Maintain Transparency With Your Loans
Sometimes taking a loan is the only option left for many people. Though it might look bad it is very necessary to overcome a financial crisis. If you have taken a loan and want to get rid of it soon then planning to finish it off should be your top priority.
Make a list of all your debts and arrange them based on cost and amount. Try to pay off those debts first which bear high-interest rates and the amount is taken is also high. Thus, in a few months, you can come out of debt.
On-Time Bill Payment
It is good practice to pay all your bills on time. Delays in bill payment harm your credit record. Also, paying bills on time can save you some money as you don’t have to pay a late fee charge as a fine. So, if you are lazy and don’t pay your bills on time then you should start doing it soon.
Open a Separate Saving Account
It is a better idea to maintain a separate savings account and checking account. The reason behind it is that you won’t fail to save money every month. If you try to maintain your savings in the same checking account then it will be very difficult to keep a track on spending. Hence, it is better to open a separate savings account and keep the money in that.
Auto Deduction For Savings Account
Though many people open a savings account after some time they forget to put money in that account. It has been found that people who have automated their payment into saving accounts are able to save more than people who don’t. Hence, automation can be very helpful in reaching your financial goals. Once your money is transferred into a savings account, you are unlikely to use it for any redundant purpose.
Overall, it can be said that maintain a healthier financial life is very important in today’s time. A frugal behavior can cost you a lot if you don’t save money for future needs. And if you put these practices in your habit; your financial life can be healthier. A financially healthy life is a beautiful life.