Financial habits you need to learn for financial freedom
Have you ever noticed what it takes to become bit rich ? Or paid attention to few habits which can lead to more productive money and productive days ? There are some habits you need to develop for accumulating wealth. You know what, spending as well as saving comes from a mindset. Some people are prone to accumulating wealth while some are prone to accumulating debt.
Figure it out yourself by self analysis of your financial health. Look if you are growing your savings account or debt. If you see your credits and debt growing, you need to look at it seriously.
If you think that you can save money by first making all the expenses and will save whatever will be left , then you are wrong. You will never have enough money to save after making all the expenses. It is wise to save before making any expense. Pay money to the most important human, yourself.
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1.Track your spending
The most important thing before saving money is tracking your spending. It becomes easy to analyze the activities of money when you know your spending. Tracking your spending gives you insights into where you can cut unnecessary expenses. You can decrease your allowance to some of the activities like entertainment, outing, groceries, phone bills.
After tracking your spending, you will be able to see how money is flowing in different directions. You may have subscriptions where you can save money or you might have accumulated those things yo don’t need. End result will be few dollars to save.
2. Plan your finances
It is said that those who plan their financial future are more likely to be financially independent. This is a crucial step in growing your wealth to next step. Planning your finances ahead is equal to planning your future. This way you would know how much you will need when you retire, how much should go in your emergency fund and then investment, saving fund.
You need money for everything. Also, you should be free from the fear of money. Few steps for financial planning includes
- Tracking your spending
- Making monthly budget and sticking to it
- Saving plan
- Debt repayment plan
- Investment plan
Planning should include your bigger as well as smaller saving funds, investment and plan for paying all the debt
3. Set your financial goals
After finance planning comes the fun part of setting your goals. This is fun because it depends on you how much you plan to save and in how much time. It is totally dependent on you and you can manage your time and money wisely. The only problem is slaying those goals.
When you have some goals in your mind , you will start working aggressively for achieving those goals.
- Long term goals ( Retirement fund, investment funds, Real estate )
- mid term goals ( Investment, emergency funds, educational funds, saving for home)
- Short term goals ( Monthly savings, weekly savings, investment , saving for travel)
Having goals at each level will give you time and you will not feel overwhelmed by the sheer pressure of saving money.
4. Learn to save each and every penny
Saving each and every penny is an art which has an important place in the world where there is so much to spend on. When you want to buy something , you become so eager to buy. Your mind become restless if you cannot buy that particular thing.
At that very moment, think about the money you will save by not purchasing that item. Learning to save each and every penny is really an art.
I learnt this after going through some financial crisis when I was in college. I was given a set amount of money and I had to manage everything in that money. That way I learned to manage my money.
5. Start some side hustles to earn extra money
All of us have some kind of passion for some art, craft or anything. Why not put that art or craft to work for financial goals. Never rely on single income instead make use of your hobbies and passion to create something. There are so many things you can do to earn money.You can start selling your creations on Etsy
Some of the popular things that can be sold on Etsy are
- Wall art
- Any hand craft
There are lot more things you can do to earn extra income. You just need to pay attention to your own capabilities.
6. Spend less than you earn
This one is tricky when you have bit tight income. When you want to save money, even little savings matter a lot. So spend few dollars less from whatever you are earning. This will let you save even if you feel that you have very little money to save.
Always be ready to save any unexpected money you get. Don’t think of spending extra money Because you are already managing your household.
7. Learn how to invest is the best financial habit
Investing is a an important part of your finances because this is the only way you can make your money work for you. Saving is necessary but working on your investment is a fruitful step if you wan to grow your finances. Investing requires little bit of courage and you need to have some knowledge of investment.
Always do your research before investing. Be clear about your investment goals. Your investment should be according to your own long term and short term goals.
8. Change your thinking about money
Always have beautiful and positive thoughts of money. Never think about that money is evil. Money is a necessity which is important. Money cannot bring happiness but the lack of money neither. So why not have it. Think about those people who don’t have money. When you have more money, you don’t have to worry about money, you could concentrate on other aspects of life.
If you have money more than what you require, you may help others by providing them. Sharing your resources will definitely gives you a satisfaction and happiness.
9. Automate your savings
When you know how much you spend, can automatically start saving by automation. Have a direct debit set up for your savings. Automation of savings before spending is better for your financial goals. You can never save enough money if you think of saving after all the expenses.
10. Pay off debt and save unexpected money
Paying off debt is a crucial step if you need to build wealth. Most of the time, interest rates are higher on debt as compared with savings. Also, if you will have debt on you, you will not be able to have that inner peace required to live a happy life.Sometimes money comes in as gifts, save it. You can feel like spending unexpected money, but it is better to save it.
11. Think like rich
If you want to have wealth, it is important to have rich thoughts. Rich thoughts will let you to work towards riches. When you have something in your mind, you start acting towards its achievement. For me rich thoughts are paying gratitude for what we have .
If your money is sufficient to meet your basic needs, there is no reason not to think your self rich. It means that you have abundance and abundance thoughts are necessary to achieve more.
One more important thing which you can tell to your self is when you have abundance, you start helping others. If you are not helping others, your wealth is of no use.
These are my favorite habits for growing your money. If you have your favorites, please tell me in comments. I am open to learn more. If you like this post please share it. Good luck to everyone for financially free life.