Personal finance management isn’t as complex as they make it to be. It all boils down to practising some good financial habits and you’re sorted.
So, how good are you when it comes to managing your finances? We hope that you have quite a lot of good personal finance habits. Anyway, here’s a list of good personal finance habits that each of us must follow.
1) Budgeting – Have you been tracking your expenses? Where’s all you money going?
2) Paying your bills – be it your Credit Card dues, Loan EMIs, phone bills, electricity and water bills, etc. – on time every month.
3) Keeping an eye on your Credit Score and credit history.
4) Spending within your means.
5) Investing for your short-term and long-term goals.
6) Having an emergency/rainy-day fund in place.
7) Planning in advance for your golden years (a.k.a. retirement).
8) Getting rid of your debts as soon as possible.
9) Investing in multiple assets. There are multiple options from Mutual Funds to Fixed Deposits to gold/real estate. So, don’t put all your eggs in just one basket.
10) Doing proper research before making investments. You could, of course, get the help of a financial advisor if it’s all Greek to you. Don’t be shy!
11) Reviewing your investments at least once a year.
12) Investing in adequate Life and Health Insurance covers.
13) Distinguishing between your needs and wants, and spending accordingly.
14) Forget the Joneses! Stop trying to keep up or outdo your neighbours, colleagues and friends.
15) Borrow money only if you really need it. Too many loans aren’t really healthy for your financial health.
16) Don’t get fooled by those dubious get-rich-quick schemes.
17) Using your Credit Card wisely. Stick to the 30% credit utilisation limit always.
18) Learn about taxation in India. This will help you save money on tax.
19) Declaring your taxes and filing your returns on time.
20) Keeping your wallet next-to-empty when you go shopping. This doesn’t need further explanation, does it?
21) Staying away from impulse buying. Always make a shopping list and stick to it.
22) Don’t just pay the minimum due on your Credit Card. You’ll be shelling out a lot on interest if you do.
23) Use your Credit Card to buy stuff only if you are certain that you can pay it off in full at the end of the month.
24) Always comparison shop for everything, even financial products.
25) Get acquainted with technology because everything finance-related is going digital.
So, how many of the above-mentioned personal finance habits apply to you?
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