Research shows that a person’s spending habits have a direct correlation to his or her personality. That means that depending on what they spend their money on or how much they do so, it speaks a lot about that person’s self-control and how money-oriented they are.
In today’s world where purchasing things online is a norm, people’s spending habits play an important role in ensuring they are financially secure. Here are some dos and don’ts of financial planning so we can learn to better secure our finances.
Do plan your small and big money goals
Just as you need to make a checklist before you go grocery shopping, you need to list down your money goals to plan your finances as well. Be clear about how financially secure you want to be, match it with your current spending habits and some things you want to spend on in the future. For instance, right now you may have a set fund for daily commuting, but if you plan to get a motorcycle or a car in the future, you can consider them too in that goals list.
When you have your goals clearly outlined, it will be much easier to plan out the right steps to achieve them.
Don’t prioritize the wrong things to spend your money on
Remember, the biggest battle in your mind when you spend your money is to determine whether you’re satisfying a want or a need. When it comes to your finances, be realistic about the things you want and need. Buying rice for your meals? A need. Purchasing the latest Android phone to flex to your friends? A want and a waste of your money.
Set your priorities straight and include this priorities list when you are outlining your money goals.
Do keep track of your expenses
Do you know how some people track their online items after it’s been paid and shipped out on their online shopping app? Do the same thing with your expenses. If it helps, keep your digital and physical receipts and keep track of them in an excel sheet or a notebook. Keep them updated daily and review them at the end of the week and month.
Don’t spend your money impulsively
Let’s face it - temptations are everywhere. When department stores have the 9.9, 10.10, 11.11 and 12.12 sales campaigns, you will find yourself perusing through online and physical stores and feel like buying everything you see. Ignore those evil voices in your head and don’t buy things impulsively just ‘because they were on sale’.
Other times, you may be facing immense emotional or mental pressure from events that happen in your life that you feel the need to compensate that by buying things impulsively. Remember, plan and be reasonable about the things you want to buy and keep track of your spending.
Do prepare an emergency fund
Let’s say that you’ve become more responsible with your spending. You’ve become used to sticking to a certain spending habit and spending within your means, then suddenly something bad happens. It could be a car accident or a fire that affected your home, you’ll need to spend a lot of money all at once but it will affect your regular expenses. What do you do now?
This is why you need to have a separate emergency fund prepared. You can start preparing for it by distributing your income into your expenses, savings and emergency funds. At least whenever something unforeseen happens, the emergency funds can cover for those and your quality of life won’t be badly affected.
Don’t be shy and ask for help
While it is true that grown adults will want to take matters into their own hands, it is not wrong to look for help when you are in need of it. If your cat is sick, you will find a vet, yes? If you’re unsure about your finances and how to manage them, consult a verified professional to help you plan your finances. Not only will they be able to suggest the best ways for you to achieve your financial goals, they can also be objective and unbiased to structure your money plans.
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