- 1 #1 – Set Clear Financial Goals
- 2 #2. Pay yourself first
- 3 #3. Track your net worth
- 4 What are your assets?
- 5 What are your liabilities?
- 6 How often do you need to track your net worth?
- 7 #4 – mange your money
- 8 #5 – Immediately Open Bills
- 9 #6 – Take minute for money on daily basis
- 10 #7 – Prioritize Debt Repayments
- 11 #8 – Save & Invest 15% of Your Income
- 12 #9 – built a Monthly Budget
For financial success in life, you have to improve your finance
How to Improve Your Finances
Money might not be the most important thing in life, but it most certainly makes the world go round. And, although it’s not the be-all and end-all for happiness, it’s something that most people closely tied to their overall quality of life And, if your finances have been a source of contention for you, then you’re not alone.
Most people struggle, financially speaking. As an emotionally- subject, money is an important part of any person’s standard-of-living. When you have money, you’re free to do things that most people simply can’t do. But, money delves deeper than that. For most people, having more money means having more time, freedom, and less cares in the world.
Whatever emotional-shape money takes on for you, it’s clear, regardless, that our financial worlds can often be in a state of disarray. For one reason or another, we feel like we have no control over money. We feel imprisoned by debt and shackled by obligation. And, usually, most people have little to no money left over the closer they get to the end of the month.
Needless to say, then, that most people are looking for ways to improve their finances. But with so much going on all the time, we tend to get sidetracked and forget about the important little steps that can help give us a sound financial life. So, if you’re amongst the millions out there that are looking for ways to improve their financial picture, here are some sure-fire pointers that will help.
#1 – Set Clear Financial Goals
One of the best ways that you can improve your finances is to set clearly-defined financial goals. This doesn’t mean some abstract target in your mind. Your goals can’t just be to have or make more money; they have to be real and achievable. You should set your goals for the long term and the short term.
Your long-term financial goals should be your big-picture ideal. 5 or 10 years from now, where do you picture yourself? Once you have the long-term goals defined, go about setting the short term ones as well. What are your financial goals 1 year from now? Write them out with real rupee amounts that have set dates.
Don’t just say you’ll make more money by the end of the year. How much more money will you make? Set a figure. Do you want to get out of debt? Exactly how much debt do you plan on paying off, and exactly by when? Maybe your goal is to eliminate Rs 10,00,000 of debt in the next year. Define that and set a date that you can move towards.
Setting financial goals that are real and on paper creates a visceral transformation in your mind. When you can see your goals outlined there in front of you, you’ll do much more to achieve them. The unconscious mind has a funny way of moving you towards what you ask it for, as long you know what that is. When it’s abstract, it’s easier to get distracted and put it off. Make it real and measurable.
#2. Pay yourself first
We mentioned before the importance of saving money. The percentage of the money you are able to set aside every month plays a key role in your financial freedom journey.
This means that once you get your paycheck, you need to set aside a percentage and move it to your investment or savings account. You need to do this before you do anything else! This comes before paying the bills and your food.
By learning to live with what’s left, you’ll be able to avoid temptations and build wealth.
#3. Track your net worth
Now that you know how much you need to be financially free, you need to figure out how much you actually have right now.
Your net worth is a sign of your financial wealth and in simple words, it’s everything you own (your assets) minus what you owe in debts (your liabilities).
How do you calculate your net worth and how do you track it?
Your net worth is:
Net Worth = Assets – Liabilities
What are your assets?
- Cash in the bank account
- Investment account value
- Investment property value
- Personal home value (many people don’t include this in their net worth as you are not really making any money from your home, but you are still saving rent and its potentially building your equity, potentially so as far as I am concerned, it’s in!)
What are your liabilities?
- Student loans
- Car loans
- Any other loan
- Credit card balance
be aware of your net worth will give you an idea of your current financial position and help you to calculate your future goals.
How often do you need to track your net worth?
I measure it wil useful to calculate my net worth every month. I want to make sure my net worth goes up while I am still working, and by making sure my expenses are less than what I earn, I can always increase my savings.
You can use a simple spreadsheet to calculate your net worth every month
#4 – mange your money
Expense tracking is one of those habits. Often, we lose sight of our spending simply because we fail to track the money going out every single day.
When we lose sight of our expenses, it’s easier to overspend. However, when you can see every last red cent that goes out, right there in front of you, it’s harder to lose sight of that. If you’ve never tracked expenses, this one habit can literally transform your financial life.
To do this, simply open a spreadsheet, download an app, or simply buy a small notepad that you can note in every single day. Then, all you necessity to do is jot down the expense with some complete information. Include the amount, description, date/time, why you spent the money, and categorize the expense. BY THIS MEAN YOU HAVE TO LIST EVERY SINGLE thing WHICH YOU PURCHASED IN A DAY DO IT FOR 90 days you will found your financial life transform
Simple daily habits that include lattes, cigarettes, and pricey lunches eating out, can add up over time. When you track expenses, you can see the cost of your bad habits much easier.
#5 – Immediately Open Bills
One way to get better your finances over time is to open all of your bills immediately when you receive them. This also goes hand-in-hand with tracking all expenses. When you receive your bills, listed and understand them. Don’t ignore them. Again, I know that it’s easier to ignore bills when you don’t look at them and track them, so don’t fall into that trap.
instantly opening your bills also has other Impacts as well. It impacts your spending habits. When you don”t make a priority your bill and ignore them your impulse spending increases.
You’re far more likely to engage in impulse buying when you ignore the bills sitting on your table at home.
When bills and other observation pile up at your home or office, it also helps to further cloud your unconscious mind. While the conscious mind may be able to ignore it, it sits in the unconscious mind, stirring and building fears, anxieties, and worries. If you don’t tackle it, this can help to further distract you from pursuing your goals.
#6 – Take minute for money on daily basis
Every single morning, you need a money minute. What’s a money minute? It’s a time where you log in to your bank accounts and review the transactions from the prior day and engage in some lightweight financial planning. You want to ensure that you know what money is going out of your account and why. And, if you’re tracking your expenses, you can double check this with ease.
Your daily money minute helps to further bring things into the conscious realm of your mind, and not hide from the costs that you’re incurring on a daily basis. Take this time to briefly analyze your goals and objectives. Where can you be putting the money that will help to get you ahead over the long term? Are there any expenses you can help to avoid in the future? Ask your self some question and observe your financial picture on daily basis is all part of money minute maybe 5 minutes, 15 minutes, 30 minutes, or even an hour This all depends on your committed for your objective.
#7 – Prioritize Debt Repayments
One of the biggest deterrents to making headway, financially speaking, is the overwhelming debt that most people face.
When you’re faced with huge debt, it’s hard to focus on anything else. How can we be hope to get ahead when all we can see is mounting debt in front of our eyes?
When we’re facing enormous debt, it’s also easier to avoid looking at bank account statements. But, the sooner that debt is repaid, the better you’ll feel. And, like everything else, debt repayment builds momentum. Once you get in the habit of paying off debt, your overall spending will fall in line with it.
To prioritize your debt, pick the highest interest credit card that you have, and double the minimum payments until it’s paid off. Then, switch to the next highest interest credit card. If your goal is to get out of debt, not only do you have to make a plan for repayment, but you also have to monitor your spending habits.
Usually, when most people receive cash from something like a mortgage refinance, inheritance, or other sources, they pay off their debt only to accumulate it back up again. So, you have to be wary. If you want to live a debt-free lifestyle, do things like tracking your expenses and taking a daily money minute. Monitor where you are, financially, and where you’re going at all times.
#8 – Save & Invest 15% of Your Income
So, it’s safe to say that saving and investing is quite possibly the furthest thing from peoples’ minds, and rightfully so. However, so much can be said about modifying one’s lifestyle in order to support saving and investing income. At first, it might seem downright impossible. However, over time, like any other habit, this one takes root and gets stronger and stronger.
And, in order to get ahead, saving and investing has to become a priority. Tucking away at least 15% of your income is a necessity. If you can’t manage that, then you’re not digging deep enough. Building a savings habit is difficult, but possible. As the money accumulates over time, you build momentum.
#9 – built a Monthly Budget
Today, creating a budget isn’t very difficult. In fact, there are plenty of tools at our disposal. From smartphone apps to desktop-based solutions, and even pencil-and-paper ones. Once you find your favorite tool, simply build yourself a budget that you can stick to. Follow along with the other ways mentioned here to improve your finances, and over time, it will come together.
Read also – Best-tips-to-make-your-budget-a-success
However, that being said, sticking to a monthly budget can be difficult, especially when certain habits are ingrained. If you know that you have some bad habits that are costing you a pretty penny, prioritize the elimination of those habits. Keep in mind that if a goal means something profound enough to you, you’ll do whatever it takes to reach it, which includes eliminating any and all financially-draining habits.
Read also – 25 habits of debt-free peoplesshare this post :