A habit is the pattern of behaviour that a person acquires until it transforms into automatic actions. Financial habits, small or big, play a vital role in structuring the wealth of a person. If the monetary patterns of a person are not helping him save money, then it is the time to change them. Adopt practices that can make the future and life free from economic worries. Here are five financial habits that can change the life of a person.
Top habits to succeed financially in life
Save money for future needs.
In an ideal world, a person would have discovered to save money at an early stage, and be generous to his future selves. Someone would have told the person about the importance of investing the money during his first job as a paper route or babysitter. But, like him, most people learned about the payment of bills after earning cash for the first time. As the earning increases, the financial responsibilities of a person grow.
Instead of making investments, and creating a healthy savings account, one increases his financial obligations that very less money is there to save. It’s vital to learn how to prioritise savings and keep the money for oneself before doing any expense. Try to keep a small portion of the earning for a particular objective like education, retirement. Doing it does not require any significant changes in life. If saving seems overwhelming, start with fewer amounts.
The banks provide compound interest on the savings, so every bit is helpful. Suppose, with all calculations of expenses and income, a hundred dollars per month will be the savings amount. It can convert to approximately 1380,000 dollars with an interest of eight per cent over thirty years.
The above calculation does not include money earned from the interest, and it estimated the saving with a hundred dollar bill. Earning from the interest on savings increases with an increase in investment. So, begin with a little saving and with more practice and control on expenses, increase the investment.
Keep a Budget
According to a survey by ‘The Millionaire Next Door’, most affluent people keep budgets. So, track every inch of money, including earning, expenses, investments, and others. Use a spreadsheet to do budgeting. Make entry of every money spent each day. Financial accounting is essential as it makes one aware of how and where the money is getting exhausted. Until there is no knowledge of expenditure, it is impossible to save it.
When a person is fully aware of his expenses, then only he can control them. Many people cannot earn extra money, so the best solution for them is to cut their expenses. Develop a habit of using the credit card for only essential purchases. With tools like County About, Every-dollar, Tiller Money, YNAB, Personal Capital, and Mint, budgeting has become easy. These tools have features that help to control expenditure and debts to save money faster.
YNAB cost 6.99 dollars a month and is free for thirty-four days. Mint is a free to use tool with no hidden charges. Personal Capital offers chargeable services to advisors at 0.89% with at least 100,000 dollars minimum balance. More information about the tools is on Google. The basic idea of budgeting is to know where the money is getting spent. It does not aim at restricting oneself and not enjoying life. With the clarity of savings for children’s education, marriages, retirement and other purposes, it becomes easy to spend money on leisure.
Use Credit Cards Wisely
First of all, avoid using cash. Start using a credit card because the users of these cards get points and rewards. One may say that the credit card company charges fees for transactions. It is, no doubt, true, but by using the card, one can get back a significant section of fees, in the form of rewards and cash back.
However, by using cash, one gets back nothing. Though there are many reasons that the reader may give, for not using credit cards but here, the point is about their advantages. Credit cards have many perks and benefits. They provide cashback, rental car insurance, price protection, extended warranties, and many more. These cards also offer travel insurance.
The travel benefits of the credit card include trip accident cover, delay benefits, lost or delayed baggage insurance. These benefits can save a person from a lot of expenses, and provide hassle-free travelling. The credit cards are like an emergency fund backup plan. Though a person should have an emergency fund for at least six months, a credit card is also a good option. It ensures access to more funds.
Credit cards give a credit score to its user, which is very helpful when applying for loans. If a person wants to buy a home, a good credit score can save him thousands of dollars on the mortgage loan. A lower interest rate on auto loans, student loans, and personal loans can be given to people with a better credit score. Lastly, a tip for credit card users is on-time payments of the purchases.
There is nothing like practical goals to track oneself. A person should remember the purpose of his working. To clear it more, consider the following example, suppose a person wants to learn Spanish from South America. He needs six months for learning the language. He would take the following steps to achieve his goal.
Write your goals on paper. Not just the title, write in detail about the objective. Suppose you want to acquire knowledge regarding the culture of Guatemala and wish to be fluent in Spanish by the time you’re back home.Categorize your this goal into sub-sections, and actions needed. This may include the following:
- Cost of the stay in Guatemala for six months.
- Cost of food in Guatemala.
- Finding out the time taken to save that much money, and calculating saving for each month.
- Learning fundamental of Spanish while saving money.
- Ensure that the passport is ready, and check for the eligibility of travel rewards credit card.
- Learn about travel advisories on the State Department website.
- Plan the items that a person will take with himself.
- Make a list of the places to visit and modes of travel.
- Give a copy of the itinerary to the friends and family.
- Cost of calls to family and friends.
Do not stop even if the steps are taking more time than calculated. Though the above example is about a small investment for studies, yet goal-setting is crucial for finances, and time. Setting the goal is vital for any process, including savings and investment. It involves, dividing the goals into small targets, and action to achieve them.
March at your own pace.
A person can think of wealth as a means of starring in his reality show or having huge followers on Instagram. Tom Corley, a financial planner, found that wealth is not what people usually think. He researched for around five years on the rich people and how they made money. He founded that most of them lived below their means.
Living below their means are people who can have cars, big houses and other stuff but they choose to invest. They are less likely to make a random purchase because they know the idea of opportunity cost. If they are looking to buy new shoes and found the perfect match for two hundred dollars, they won’t but it. They will keep searching for it unless they found the similar for a hundred dollars.
Tim Corley, in his book, ‘Rich Habits’, described the term ‘saver investors’. They are people with modest income but know how to prioritise their money to have a faithful saving. They have saved around 20 percent or more for their retirement. They are prepared for any emergency. They are away from the new trends in clothing, latest cars, or comparing themselves with anybody.
For them, financial security is above all leisure. When a person walks at his own pace, he can make unbiased decisions. His decisions are based on the facts that are best for him. He is confident about them and does not care for what others are doing.
Part-time jobs in Australia
The importance of having a part-time job is additional income. Part-time jobs in Australia include a retail job that requires a person to sell products to customers. Products can be clothing to electronics. A retail store can be a chain of stores, departmental store or small store.
One can look for jobs in hospitality like cinemas, restaurants, bars, sporting venues. Another option is working for supermarkets like petrol stations, call centres. International students can find part-time jobs in their field of speciality. A media student can find part-time opportunities in television, radio, and over the top media services.
Everyone wants a secure future and be provided with marketing assignment help whenever needed. Both of them are possible by properly planning on investments and expenditures. Organizing finances wisely can bring a positive change in life. As said by Tom Corley, one should try to become a saver investor to enjoy a healthy financial life.