- Date : 31/01/2020
- Read: 4 mins
Some people always seem to have money. It is not just that they have more money, but that they are good at managing their finances.
Feel perpetually broke even though you earn a decent salary? Are you are living from paycheck to paycheck? Do you ever wonder why your colleagues seem to be always financially comfortable, but you can’t seem to live like they do?
Chances are you’re not the best at money management. There are certain habits common to people who always seem to have money. Here’s what you can learn from them.
1. Make a budget and stick to it
Every robust financial plan starts with budgeting. People who are good with money create a budget that takes into account their monthly expenditure such as groceries, rent, utility bills, lifestyle needs, savings, etc. They not only know how to create an effective budget, they also stick to it – no matter what.
2. Don’t spend money you don’t have
While using a credit card is a prudent financial move (it helps build credit score), financially savvy people do not use it if they do not have the means to pay off the entire credit card bill before the due date. They avoid the urge to swipe their card in the hope that money will come in the future.
3. Prioritise your purchases
Financially savvy people know the difference between need and want. They prioritise their spending depending on the situation. They focus on basic needs while saving for the future, creating an emergency fund, doing the shopping, and planning for vacations – in that order. You will never find them blowing money when there are bills to be paid.
4. Avoid impulse shopping
Do not buy things just because you feel like it. People who are good with money always take time to sleep on a purchase decision. Three times out of four, if they wait 24 hours they realise they don’t really need it. This is especially effective when it comes to big, unplanned purchases.
5. Keep track of your spends
People who are smart with money never make purchases and forget about them until a monster credit card bill lands at their doorstep. How do they do this? They keep track of all their expenses. They use expense tracking apps to constantly stay on top of their spending. They keep a record of every expense made via cash, cards, digital wallets, and other means.
6. Expand your financial knowledge
Responsible people are always on a quest to improve their financial literacy. They constantly read about various types of investments, new government schemes, tax-saving hacks, and more. They also take advice from people who are more knowledgeable and experienced in financial matters.
7. Seek out investment opportunities
Smart people are keen on exploring viable investment opportunities. They discuss investment options with their friends and family to learn how they can diversify their portfolio. However, they measure risk and keep their goals in mind before making investment decisions.
8. Set some motivational goals
Whether it’s buying a widescreen TV, or a car, or a house, or spending on an international vacation, financially prudent people set goals. With a vision in place, they constantly work towards meeting their goals. This helps them choose wisely between wasting money in an expensive restaurant and saving for a holiday in Europe.
9. Have an emergency fund
Smart people always have an emergency fund so that they are not pushed into debt just because of unforeseen expenses. They work towards building a healthy fund to fall back on instead of having to rely on credit cards with no means of repaying them on time and having to face a steep interest rate.
10. Keep reviewing your financial standing
People who always have money are never caught off guard. They are at all times aware of their financial status. They periodically review the money in their savings account, fixed deposits, mutual funds, PPF, insurance, etc. This helps them build a strategy to achieve their life goals.
There is no better time than the New Year to develop new habits. Aim to become good at handling money in 2020 by emulating these habits, and become one of those people who always have money! Read these 8 Money tips for women in the New Year.