We live in a world where debt is seen as the new cool. We incur so much debt daily, such as car loans, study loans, and mortgage loans, that our income becomes inadequate to service our accumulated debt. However, to live a debt-free life and attain total financial liberty all we need is to formulate a good financial habit.
Unfortunately, many fail at this task. With over a decade of practical finance experience, Nick Wilson, CEO of Advance SOS, shares what he described as the seven habits and practical solutions to reach total financial freedom. Advance SOS is your most reliable app for getting fast cash loans on the same day even with bad credit.
Define Your Financial Goals
When you have your goals written, they are half accomplished. To have an idea of what you want your financial worth to be like, you need to write your goals down, vividly, and very specific.
By being goal specific, you accumulate specific data about your finances, such as your current income, lifestyle, debt level, and current investments, and get a better insight as to how much you can accumulate over a specific period.
Assess Your Finances
When you have a vivid picture of your financial goals in mind, you cultivate the habit of constantly evaluating your financial situation to identify impediments to your financial growth. How much are you earning, and how much are you spending over a period of time?
Are there avoidable expenses you need to get rid of to give room for future investment? Are there similar recurring expenditures that could work as mutual substitutes or as an opportunity cost for your financial goals? Questions like these will help you further amend your financial goals and cultivate effective planning.
Always Have a Budget
A budget prevents you from spending what you don’t have. Having a budget helps you allocate your income to cover all your financial goals adequately. It suppresses your intuitive spending and increases your saving power. However, sticking to your budget is as important as having one.
Your budget keeps your expenses and goals organized. It remains the fastest way of catering to all necessities and meeting your savings goals. When you stick to your budget, you get to harness sufficient savings that can finance your long-term investment goals.
Reduce Credit Card Usage and Stay Off Debt
It’s easier to slide into excessive credit card use to fix up your urgent needs quickly. However, a good budget plan caters to almost all aspects of your financial life. With a good budget plan, all you need is to live within your means. Also, credit cards are not excess cash lying around. You will pay for it in full and with interest.
If you use your credit card to finance your long-term goals, you should avoid it. Furthermore, always pay off your credit card when due and avoid missing payment dates. This will keep you from falling behind on payments and accruing interest, which will increase the size of your debt.
Saving provides you with the refined financial muscle to invest in your long-term goal. Cultivate the habit of saving first before spending, or create an equal percentage breakdown of your income to cater adequately for savings. Traditionally, twenty percent of your income appears to be the adequate savings rate, but we recommend saving as much as you can if you have the means to do so.
Also, your savings must increase as your income increases, and, if possible, create an automatic savings plan with your bank. This ensures that a specific amount is set aside and locked in your savings account on each payday. Other key saving alternatives are exploring retirement saving schemes, matching contribution benefits, etc.
Make it a habit to invest in things that have prospects. However, educate yourself about the areas you want to invest in before you put in your money. Knowing too little about where your money is going is the same as throwing it away. Learn new things such as how to calculate compound interest and how to study the stock market.
Furthermore, gambling is not an investment. Do not draw out your savings to delve into investment schemes with gambling attributes. For starters, you may consider creating an online brokerage account with some of the best online brokers in the market to maximize your return on investments.
Seek Professional Help Where Necessary
The internet seems filled with useful information, but consulting a professional can bring real and fast results to your financial situation. By getting an expert opinion that fits perfectly into the context of your finances, you get a better understanding of the unnecessary items you have embedded in your budget plan, how to handle taxes better and how to invest in the right things.
It is also very important that you never stop learning. Keep up with business news, and you will be surprised at the emerging new opportunities you just might be exposed to. Also, improve in other investment areas that most appeal to you, such as development in the stock market or cryptocurrency markets.
Inculcating these seven habits allows you to improve your finances and puts you on the fast track to financial liberty. However, the golden habit upon which every other habit stands remains the same: living within your means. Don’t buy what you don’t need and always explore the option of cheaper alternatives. Also, learn how to properly maintain belongings at your disposal to avoid changing them too often, thereby increasing expenses. Most importantly, save every little chance that you have.
Author: Amanda Girard leads the copywriting of the best articles in AdvanceSOS. Her invaluable input translates into works posted throughout our website and other channels. She has continued to write the most comprehensive yet exciting pieces for us since our founding in 2019 and remains a valuable person in the company.