Getting finances together is a recurring resolution on almost everyone’s list but often pushed at the end of the list. The Coronavirus pandemic has made all of us extra cautious about managing our finances and is not considered optional anymore. Whatever your financial habits were before the crisis, it’s never too late to start fresh. With discipline and deliberate action, you can build a few good money habits into your day that will positively impact your financial life.
Start investing and pay yourself
A beneficial practise of financially successful people is that they pay first. It is recommended to put aside some money at the beginning of the month, although more of a mind trick helps save more. Just like paying yourself, you also need to start investing for future needs, especially retirement. The easiest way is to create a retirement fund that has defined long-term monetary goals for growth and saving. Investing in tax-friendly financial facilities such as NPS, ELSS, and so on is crucial than ever before.
Build your emergency fund
Another great habit to develop is starting an emergency fund. Maintaining an emergency fund or keeping aside emergency cash should be one of the primary things to do. This is more crucial than saving for retirement. A simple way to build an emergency fund is by using apps like Money Club to save, invest, and borrow money more efficiently.
Pay off your credit card debt
It is always recommended to pay off any debts as early as possible. This will need some amount of effort and self-control, but it is worth it. Start paying extra on your debt to get your credit card debt paid off if you’re in an unhealthy habit of clearing the minimum on your credit card balance.
Start a budget and stick to it
If you don’t already have one, you need a budget. Creating and sticking to one could be the single best thing that you do for your finances in the new year. Budgets force you to take a hard look at the money you bring in, the money you shell out, and the money you may owe. If you have never followed a budget before, the thought of starting one can be daunting.
Pay off your student loans
Student loan debt is one of the nation’s largest consumer debts, and if you have it, you know just how painful it can be. Making a plan to pay off your student loans is all about getting organized. Knowing who you owe, how much you owe, and how you will afford to pay off your loans should be your priority.
Open a retirement account
When you are young, saving for your retirement probably sounds like the least exciting thing you can do with your money. The truth is, the sooner that you start, the more secure you will be when your retirement comes. Investing in your retirement means that you are investing in your future.
Spend less money
One of the best ways to do that in 2021 is to spend less of it consciously. While it is easier said than done, spending less money in 2021 is doable with a few tweaks to your spending habits.
Get a higher paying job
A higher-paying job can help you feel more financially secure, save more money, and pay off your debts faster. While every community’s job market is different, finding a better-paying job could be easier than you think. Many companies like to promote from within, and there may be a higher-paying job available that you qualify for.
Define your long-term financial goals
Sometimes, you get so caught up in your present financial situation that you forget to plan for the future. Long-term financial goals vary depending on the person and the state of their finances. These goals could include:
- Saving for retirement.
- A down payment on your future home.
- Even saving for that trip that you have always wanted to take.
Track your expenses
If you aren’t tracking your expenses, make 2021 the year that you start. It is one of the easiest resolutions that you can make. Make sure after making purchases; you record the spending. Knowing how much you spend each month allows you to make a more accurate budget and plan for the future.
The time frame to form a financial habit will vary for every individual, and a lot depends on the specific financial goal. Developing healthy financial habits isn’t just about checking your account balance and saving more than you spend.
Aatish Sinha works with the Content Marketing team at Money Club, a digital chit fund platform that makes saving, borrowing, and investing your money more efficiently. He writes on topics to help his readers understand processes so they can make better financial decisions. He’s the go-to person that his family, friends, and colleagues turn to for all their money matters.