When it comes to your money, the best thing you can do for yourself is to get to understand your money.
In order to understand your money, which forms a rather very big part of your life, is to develop some good financial habits to help keep you on track and also help you realize your financial goals.
What are some of the best habits that you can develop? I have listed the top 10 Personal finance habits that you can start immediately
Start with a Budget
The best bet you can be sure of is to know what amount of money get is getting in and out of your accounts in a month. This is very important to achieving your financial success.
This is generally cash flow management and the only way to do this is to get your budget in order also to track your spending.
Create an off with the debt strategy
When it comes to personal finances, you will need to learn the power of NOW. The best time to plan and get out of debt is now and there will never be an easier time.
At the moment it might not seem like it is possible because you might not be making a lot of money than compared to the future but at the moment you have fewer responsibilities and with time, your responsibilities increase such and marriage and children just to mention a few.
To get out of debt you will have to do whatever it takes even if it means getting a second job or living with someone.
Reading personal finance books
Unless you are a book addict like me, it might not seem all glamorous reading but for you to have some basic personal financials skills, you will need to read some finance books.
This habit will make you a better person in the long run and it helps you in your personal development as well.
Take some time to read the books so that you can know the bare minimum.
The process of adulting is not easy, but one thing that no other person will ever teach you is money.
Start saving NOW
One thing that you will need to build as a habit is to pay yourself first. Paying yourself first will enable you to concentrate on building your long term wealth.
First, it means you will need to build an emergency fund. Then second you can start investing. You can start thinking about the down payment for your car, home or a really good investment account with some really good returns.
Pay your Credit cards monthly
Do not wait until a bank sends you a reminder of how your credit card payment is past due. Do it before the 45 days are over or once you get your monthly statement. If you cannot do this, why do you need a credit card then?
Personally, I do not have a credit card and I do not think I will ever get any credit card. I am the kind of a person who will use my debit card or cash and so far, I am doing a good job in controlling my spending.
Start saving for your Retirement
When it comes to retirement saving, start now. Do not wait until you are I your 30s or 40s to start doing this. Take advantage of compound interest that your money can earn you.
If your employer contributes towards retirement, match it up, if they do not, start your own plan. Contribute as much as you can towards the retirement plan.
Stop comparing yourself to your friends
We are all guilty of the comparison habit when it comes to financial success especially with our friends. When it comes to short term wins with your friends, do not be tempted to compare yourself.
You have a lifetime to get your finances in order. Remember, the only person you can compare with best was the person you were yesterday.
One thing I have learned about finances is that you will need to make tough calls on yourself. Give yourself some tough love. It might mean not going on vacation that year so that you can pay off a student loan or getting a roommate to reduce your expenses.
What will get you to the top of your game will be hard work, diligence and being intentional with your finances.
Organize all Areas of your finances
The best person that can be your financial planner is yourself. What do financial planners do? The keep track of money relates issues. The cash flow, insurance, assets and liabilities, taxes and even estate planning.
Start doing these things now. Do not wait.
The best bet you can put on yourself is to know where you are at when it comes to the above matters. Knowledge is potential power and you can be able to prepare for your future. This is action and this is the ultimate form of power.
Though it might look like it is too much work, every three or six months you can consult your financial planner to get to see where you are at and also where you are likely to be headed to.
Check your credit score and rating
The best bet for getting a liability such as a mortgage or a car loan is largely based on your credit score. A credit score is what banks and other lenders use to determine your credit worthiness and also how much you can qualify for.
Get into the habit of regularly checking your score to ensure that it is in order and well updated. In Kenya, the credit reference bureau can help you get to know your credit worthiness via a simple text message.
Set Yourself some Financial Goals
The best time to get a vision for you is NOW. You will need to decide what is important in your life.
The best habit you can create and develop and that will keep you on track is to know what your goals are.
Your financial goals will need to be SMART and these goals need not be for just this year only but also for the years to come.
The most successful people will tell you that the achieving of their goals has made them happier and left little room for regrets
What are your financial habits that you can share with us? What habit so far have you developed and how far has it helped you?
Kindly do share with us.
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