Smoking, drinking, partying, clicking selfies and even working way too much in excess can be called a bad habit. Healthy habits create a healthy life. There is a popular saying that goes, “man is a creature of habit”. Once you get a grip on your habits, you are most sorted in life. Neither will you suffer on account of health nor on finances. You can then enjoy eating out at your favorite joint once you are no longer a prisoner of that addiction.
Managing finance needs a careful hand just as managing one’s life, it can be a precarious situation if one’s finances are out of one’s control. Can you imagine? Some of those scenarios can be described as under:
Spending more than you have
Spending more than you earn is a bad habit. This happens when you are digging from your contingency savings, using credit cards, borrowing from others etc. It gets you into a new loop of debt. And, just in case you don’t meet the payment deadlines you are in for more trouble when interest gets adds on to your borrowings. As much as possible, try and keep your expense in control. The total expenses shouldn’t cross your income. It is important to follow a budget every month and sticking to it strictly. If you need to use a credit card, use it for an investment such as a PC, fridge, television rather than using it for partying out.
Saving what is left after spending
The most unwise thing to do is to save what is left after spending. It should be the other way round. One must save first and then manage expenses from the rest. Although not so easy but discipline you on spending what is left, after saving. This helps you to save regularly. You can decide on how much you want to save per month and then set that amount aside first thing. It doesn’t matter whether the amount is big or small. Begin with an amount of saving that keeps you stress-free. Staying committed to a saving, in the long run, pays handsome returns.
Delaying financial investments for tomorrow (which invariably never comes)
One often tends to delay a decision to invest in a long-term investment, such as insurance or a mutual fund. The sooner you start saving and investing the better, the more time you let go you lose on interest, offers, and low rates. Most of the long-term investments benefit most when you start as early as possible from the time you start earning.
Borrowing money to lead a luxurious life
Borrowing money, say in form of loans, to pay for your extravagances can become a disaster trap. Once you artificially increase your standard of living, you invariably fall into the trap of living in a fallacy. You live a false life, and then increase more debt to maintain that false life. When you don’t have a said income, why taking up a loan for a foreign holiday? Just to keep up to that level, you will keep moving in the same loop and increasing more and more debt. So, when you’ll actually need money for a genuine expense, you will have no money.
Not managing your credit score
An independent body called CIBIL maintains a credit score for all citizens on the basis of their performance in loan payback and the kind of debt handling ability they have. Your ideal credit score should be above 750. Your delay in payment of your credit card dues and your Loan EMI’s can will have a negative effect on your credit score, so you need to watch against that. A low credit score may also lead to rejection of your future loan applications. So be punctual about all your time bound payments to maintain a healthy credit score.
So spend wisely…Save carefully….Invest smartly. Be Wise, Get Rich.