As the saying goes, "A penny saved is a penny earned". Frugality is smart and it's important to utilize any creative financial sense you have. It does not matter if you are an individual responsible for managing money for your family or a small business owner trying to follow proper money management principles. As you get ready to welcome 2022, here are five unconventional habits you could consider incorporating in your new year resolution as plans for next year and beyond, that can help you boost your financial savvy:
Financial habit #1 Regularly review and update your financial plan
When we are young, frugality and financial savvy often develop naturally. As we get older, many people make simple mistakes that can cost them a lot of money in the long run. Often, these people fail to recognize and correct the mistakes, thereby causing permanent damage to their financial well-being. As time passes, you may find yourself believing that good financial sense is just a "given". However, it is always a good idea to periodically take stock of your financial situation. You can always decide that it's time to update your plan when you start feeling overwhelmed by the number of bills and accounts you have. I suggest that you start looking at your financial situation with a fresh pair of eyes. You can also use this opportunity to take a good look at all of your bills and accounts and decide what works for you and what doesn't. You'll find that if you're missing something important, or if you've made a serious error, it's usually not too late to do something about it. This also helps you prioritize and make corrections.
Financial habit #2 Set financial goals that are meaningful
One financial habit that can help you stay on track is to set financial goals that are meaningful to you. Having goals gives you a specific target to aim for, and helps keep you motivated. When you first set up your investment plan, it may help to think about the following questions: "What's my long-term goal?" "Where do I want to be at the end of this year? At the end of my investment plan?" "At what age will I have achieved my goal? What will I be able to do with the money then?" "What's important to me now?" For me, it's important to keep the following goals in mind: With my portfolio of investments, where do I want to be in five years? Ten years?
Financial habit #3 Create a budget and use it to guide your spending
If you want to get your finances in order, one of the most important things you can do is create a budget and use it to guide your spending. A budget will help you keep track of your income and expenses, and it will help you stay on track with your financial goals and spend your money wisely. First, make a list of all the important expenses you have, personal or business-related and anything else you can think of. Then, make a list of how much you have to spend on each of those categories and the specific amount that is allotted for each category. Next, work out a way to keep track of your expenses and make sure you have enough money in each category. It's up to you to determine how much you can spend on different items, but you can't go over your budget for other categories.
Financial habit #4 Find other sources of income to improve your income
If you want to improve your income, you should find other sources of income including passive income. Passive income is money that you make without having to work for it. There are many ways to make passive income, including investing in stocks or real estate. Another good way to make passive income is getting paid by websites. Sites like Freelancer.com , Adsense , and Google Adsense pay you to write content, including blog posts and articles. For a business owner, this may mean investing in other related areas.
Financial habit #5 Reinforce and Self Reflect
Finally, use the power of daily affirmations. Here are a few things you can tell yourself every day:
· I have sound financial sense.
· I am blessed with the ability to make sound financial decisions.
· I define the direction my money takes so I can achieve the best financial results.
· I know how to manage my money.
· I understand that the financial decisions I make could determine my success in life, so I act wisely.
· I rely on my instincts to make such important decisions after I carefully consider the advice of professionals. When it comes to saving, I spend time studying my options.
Sometimes going through the following Self-Reflection questions might help as well:
1. Do I allow unsuccessful financial decisions to discourage me from making future decisions?
2. Can I manage my finances without succumbing to the stress that sometimes goes along with the responsibility?
3. What factors do I use to determine the best options for investment?
These five unconventional habits can help you boost your financial savvy: regular review and update your financial plan, set financial goals that are meaningful to you, create a budget and use it to guide your spending, find other sources of income to improve your income and use the power of daily affirmations.