One of the most challenging parts of our life is surviving amid a crisis. Several financial issues are never-ending hot-topic even if you’re a wealthy person who manages numerous businesses. It may sound sensitive to talk about, but hoping that this article will give you a broad understanding of being financially healthy.
Perks of being financially healthy
Financially responsible leads to financial freedom
Lack of debts strongly indicates you are financially healthy. You don’t feel guilty, or you don’t have to hide to the people you owe debts. You can easily breathe, get a comfortable sleep, and feel free to roam around when you don’t have any obligations to pay, even the small ones. Being financially responsible in your spending habits will give you a lot of focus and concentration. In addition to that, you will become more motivated to achieve your dreams.
How to become financially healthy?
Be financial literate
Financial literacy is obviously all about finances. It usually tackles the proper financial management, investments to grow your money, and setting the short and long-term plan for your future. Being a financially literate person means having broad knowledge and skills in terms of spending your money.
Spend time learning about financial literacy. The internet platform nowadays offers various relevant resources such as Investopedia. You can also get inspiration from various financial advocates locally and internationally.
I used to read several books and apply them efficiently. As a result, I became more disciplined when it comes to saving and spending. The best-selling books written by Chinkee Tan and Robert Kiyosaki are my favorite financial speakers. To be honest, their impressive skills really impressed me.
Control your temptations every time
Compulsive and impulsive buying is the worst enemy that can ruin our budget. The sudden emotional urge we feel when we see trendy stuff online. Admit it, we become uncontrollable every time we receive a vast amount of money, especially when we own credit cards. Personally, I don’t use any credit cards because I know the temptations you feel when you go to shopping malls, and also, I don’t want to think that I have debts to pay.
Learn to control your overwhelming emotions. Live in a simple life, avoid buying new things regularly such as clothes, smartphones, accessories, gadgets, or any other unnecessary things you see. But still don’t forget to reward yourself sometimes after a long hard work.
Taking smart decisions
When your monthly salary is automatically deposited into your bank account, remember this golden rule of thumb; pay yourself first. Always prioritize setting aside your savings before spending necessary expenses. Set the amount that will go to your savings every paycheck. For example, let’s say you earn 5k in every payroll cutoff, you set 1000 for your savings, and the rest will go to your expenditures. You must save first before you spend,
Here’s the basic equation for further clarification:
- Savings – Income = Expense
- Income – Expense = Savings
Another savvy option, remember the 50-30-20 budgeting rule. The 50% allocation of your salary should go to the monthly bills you need to pay such as electricity, water, internet, etc. While the 30% must be on foods, goods, or other household necessities. Lastly, 20% of your monthly salary will go to your short or long-term savings and emergency funds.
When it comes to spending, keep in mind to weigh the needs vs. wants. Let’s put in a real scenario when you want to purchase some accessories for yourself. Try to ask yourself first, do you really need it or just want to buy those unnecessary items?
And that’s all, stay tuned for other related financial topics. I hope you learned a lot of information and apply these saving tips to your daily lives. Let’s stay financially healthy during a global crisis.