Essentials Habits Must Follow In Finance



What word would you think of first if I asked you: how do you manage your finance ? Sure there are many that go through your mind, but the important thing is to know if you are really aware of how you handle that part of your life.

Personally, I consider that “financial habits” should be taught at an early age , since they play a decisive role in our lives and if we learn them from a young age, when we are adults they can save us a lot of headaches.

That is why I set out to research how to acquire good financial habits that we were never taught, but are necessary to change, improve and achieve financial success.  

Surely you are tired of hearing that it is important to budget, but trust me, a budget acts as a protector against the temptation to spend your money.

Change  that bad habit of not having control over your finance! Without the help of a budget, your mind will be on autopilot and you won’t know where your money is going each month.

LEARN TO BUDGET, BUT NOW!

If you’ve never set an income and expense budget , now is the time to start! Budgeting may sound boring, but don’t think of it that way, because it’s a habit that will provide you with two immediate benefits:

You become aware of where you spend the money.

You will begin to avoid unnecessary expenses.

TOOLS TO RECORD YOUR EXPENSES

Fortunately there are many options that allow you to control your expenses, you can choose to:

Mobile apps

  • Spreadsheet in Excel
  • A simple notebook

Never forget to pay your taxes

Unfortunately many people do not understand the importance of complying with tax obligations and in the end they end up paying the consequences.

In the end, the only owner of the money you earn is you, but don’t forget, there are also obligations to fulfill.

ORDER AND SUPERVISION MAKE THE DIFFERENCE

One of the mistakes people make is delegating all responsibility to accountants.

To help your accountant to present your statements correctly, I recommend that you be extremely orderly and organized, for that there are tools such as billing providers and accounting software that allow you to keep an excellent control of your invoices issued and received.

HOW DOES BEING IN DEBT AFFECT ME?

Debts have a psychological effect that works against the debtor, so not having them is the best, not only for your pocket, but also for your health.

It is very simple, if you followed the advice in step one and you already know that you are in debt, it is definitely a habit to change, and to achieve it pay attention to the following:

SET ASIDE AN AMOUNT FOR PAYMENT AND IDENTIFY YOUR SPENDING LIMIT

What you must do to eliminate your debts is to carry out a strategy where you establish a correct distribution of your income, that is, identify what your basic needs are and determine your ability to pay.

Then list the number of financial commitments you have, as well as the amount of each one to allocate a specific, constant and safe sum.

Remember that like any strategy you must define a clear period of duration and respect what is established in the plan.

IDENTIFY YOUR SPENDING LIMIT

This part is linked to point two, establishing a budget. One of the causes of getting into debt is not knowing when to stop, that is, not knowing what our payment limit is.

HOW TO BE PREPARED FOR THE FUTURE

Earning a lot of money does not mean being finance free. History is full of cases of people who earn millions a year and lose everything from one day to the next.

Why? Simple: the lack of planning and determination of objectives. Planning is the basis for every work, project and even life to go as desired.

LEARN TO PLAN  

Planning makes you prepare for:

  • An emergency
  • Your retirement
  • Your children’s education
  • Protect your heritage

To avoid having finance problems in the future, you must create a strategy that combines all the previous habits; plan thinking about possible inconveniences, allocate a part of savings to capitalize and invest when necessary, in addition to avoiding debt.

A determining aspect is that you think ahead, having vision is important if you want to be successful. 

Being financially free implies totally changing your financial habits and for this reason it is a process that can take years or even a lifetime. However, personally I learned that the most difficult thing is to take the first step, then you just have to be constant, orderly and disciplined.