Smart Money Habits for Stellar Health
Christopher Haymon has learned the value of saving and budgeting the hard way. He created Adulting Digest to help others who need help navigating the world of adult finances. Financial Mappers welcome’s Christopher to share his thoughts as our guest author:
Making smart financial decisions is important for building wealth and enjoying long-term financial security. Don’t wait another day to develop your financial plan.
Whatever your current financial position, good planning will help you make progress towards your goals without developing bad debt or missing out on rewarding opportunities. Keeping your finances on track typically boils down to adopting a few smart money habits. Check out the following tips for healthy money management.
Start Investing ASAP
The sooner you start investing, the better. It’s common for people to put off investing until they start making more money or have the time to read every investing book imaginable. But waiting to invest could mean losing out on some significant financial gains. Thanks to compound interest, the amount of time your money sits in investments will likely matter more than how much you contribute over this period.
If you’re already an investor and you want to diversify your portfolio, consider investing in real estate. Real estate investments are an excellent opportunity to generate both short-term income and long-term returns, ultimately building your wealth in various ways. There are many different ways to invest in real estate, from flipping properties to managing rentals. Consider the advantages and disadvantages of each option carefully so you can find a good fit.
Develop a Budget
No matter how much money you have, budgeting is essential for reaching your financial goals. A good budget will help you stay financially disciplined, so you can avoid frivolous spending, be prepared for emergencies, and stay out of debt. Make it as easy as possible to track your budget so you can keep it updated. For example, financial apps like Mint and YNAB are much more convenient than tracking your spending on a computer spreadsheet or adding up numbers in a notebook. Just make sure your wireless plan can handle the extra data usage—overage charges can seriously cut into your budget. Unlimited data cell phone plans from providers like Verizon will help you avoid these fees and use your finance tracking apps to their full potential.
Set Goals and Objectives
Setting financial goals will help you develop a roadmap to success. Without objectives, you may end up saving too little money for retirement or holding onto debt for longer than necessary. As Money Management International suggests, setting financial goals can also keep you motivated and focused, so you’ll work harder to achieve those things you want. Money Management International suggests setting tangible, measurable goals to ensure you end up where you want to be. Some common financial goals include saving for retirement, saving for a down payment on a home, building an emergency fund, paying off debt, and putting away money for your children’s education.
Cut Unnecessary Spending
To make progress towards your financial goals, you may have to make some cuts in your budget. Cut back on unnecessary expenses so you can put your money towards things that matter more. For example, CNBC suggests reducing your spending on eating out, food delivery, entertainment, clothing, and alcohol. Try to limit yourself to essential expenditures like housing, groceries, and health insurance. If you’re not sure which expenses to cut from your budget, track your spending for a couple of months to see exactly where your money is going.
Automate Your Savings
A common, wise piece of financial advice is to pay yourself first. Setting aside a portion of your income in your savings before spending anything will help you prioritize your financial security and avoid spending money on things you don’t really need. If you have trouble remembering to do this when your paycheck comes in, schedule automated transfers to your savings with your bank. This makes it easy to save money without even thinking about it.
Adopting good money habits now will lend you greater peace of mind and secure the future that you want for you and your family. Take steps to keep your finances on track so you can reach for those exciting goals. There’s no better time than the present to learn how to plan for retirement, make smart investment decisions, and manage your current cash flow to enjoy optimal financial health.
Christopher Haymon (Adulting Digest)
Disclaimer: Financial Mappers does not have an Australian Financial Services License, does not offer financial planning advice and does not recommend financial products.