Good personal financial management is the key to maintaining financial freedom. No matter how big your income is, it is still too easy to blow through all of them without sufficient control, good budgeting, and a clear view of your expenses.
What’s difficult about implementing good financial management isn’t the technical side; you can always review your expenses and find ways to save. The real challenge is doing good financial management as a second nature.
Forget about making big changes. Getting used to budgeting and organizing your personal finance are easier to do when you start with the little things. Here are the 12 financial habits to start with in 2019.
1. Keep Track of Everything
Keeping track of your income and expenses is key. Forget about trying to remember everything. Download a money management app and start scanning receipts, adding every income and expense, and consolidating your accounts at the end of each month.
2. Cover the Basics
Some expenses are predictable. Your credit card bills, the mortgage loan, and even energy bills and petrol for your car are the kind of regular expenses you can plan for. Leave nothing to chance; allocate your income to make sure you have the basic expenses covered.
3. And Plan for the Rest
Other expenses are trickier because they are one-time expenses. What you want to avoid is making spontaneous decisions when it comes to spending money, especially when you are on a tight budget. Rather than spending the money immediately, save first and plan for the expenses better.
4. Always Do Your Research
Leveraging loans is one of the things you can do to take your personal finance to the next level. Whether it is a short-term loan from the likes of Emu.co.uk for filling a gap in your monthly budget or a mortgage loan that allows you to buy your first house, it is always necessary to compare deals and do your research.
5. Know the Costs
An important part of that research about financing options is understanding the cost of using the loans. There are reasons why you cannot pay off your credit card bills by sticking with the minimum payment amount; the costs of using the credit card will be too high when you do.
6. Be Wise with Credit Cards
Speaking of credit cards, many financial experts now advise against owning and using them. That is not the ideal solution to potential credit card issues. You can still benefit from the deals, loyalty programs, and special offers from your credit card. Just make sure you only use credit cards when you can repay them in full at the end of the billing cycle.
7. Read More
The bills you receive, the loan agreement you are about to sign, and other finance-related documents are required to provide sufficient information to you as the recipient. While reading detailed terms and conditions isn’t fun, it is a necessary habit to get into if you want to protect your financial future.
8. Save Early
Another great habit to get into is saving a portion of your income early. Instead of waiting until the end of the month before depositing the money you have left into the savings account, set aside 10% (or more, depending on your financial state) and save the amount as soon as you receive your income.
9. Invest Earlier
As you develop your savings account and accumulate wealth, you want to start looking into investment instruments. It is never too late to start, but it’s never too early either. The sooner you start building your portfolio, the sooner you can secure a better financial future.
10. Take Advantage of Different Investments
When you do enter the investment landscape, tip #4 applies to the investment instruments you want to use too. Learn as much about them as possible, and make sure you create a portfolio that works for the objectives you want to achieve. Speaking of objectives….
11. Be Flexible with Your Financial Goals
Having clear objectives in mind is important as you try to get your personal finance in order. When you have goals to achieve, you can be more specific with how to best achieve them. That said, the objectives can be flexible, and you can make changes to your plan along the way.
12. Stay in Control
One such occasion when changes are necessary is when you get promoted or a pay raise. Normally, the income raise means you can spend more on additional expenses. However, doing so with all of the raise means missing out on the ability to aim higher with your financial goals.
It is indeed tempting to up your lifestyle as you earn more. Staying in control means being selective with the upgrades and extra expenses you go for. Combined with the other 11 financial habits you can develop this year, 2019 will be a great year for your personal finance.