Do you feel like your finances took a hit during the pandemic and you still haven’t been able to get back on track? A new year is the perfect time to refocus on getting your finances in order and adopt healthy habits that will help you get — and stay — out of financial trouble.
This does not constitute advice and advice should be sought in all instances before acting on it.
Building new habits into your life can be tough, but it’s important to remember why you’re making these changes. If you set realistic and measurable goals it will be easier to achieve them. And breaking up your bigger goals into smaller actions, as well as taking it one step at a time, will help you get there. If you need rewards, you can allow yourself them as motivation to hit your goals and soon enough, your new habits will become second nature.
To help kick-start this process, we’ve put together a few habits for you to implement this year.
Prioritise yourself
Prioritising yourself means that before paying any bills, you save and invest a portion of your salary first. A good rule of thumb is to put aside around 10% (if feasible) and ensure you know the difference between necessary expenses and luxuries. No matter how much you are able to save, remember that every little bit helps. Once you’ve paid yourself, then you can use the rest of your money to pay bills and buy other things you need.
Spend less than you earn
This might seem like a bit of a no-brainer, but a lot of people don’t live within their means. If you spend more than you earn, you end up building up debt. If, for example, that debt takes the form of credit card debt, it is possible you could forgo paying the full balance each month which will rack up interest and fees the longer you can’t pay. Before you charge, ask yourself if the purchase is really necessary.
Keep a clear head
Oftentimes, people let emotions dictate the financial decisions they make in life. It’s easy to turn to shopping when you’re bored or disappointed, or even happy. While it’s crucial you understand and have an outlet for your emotions, you shouldn’t let them have an impact on your bank account. Find other ways to cope and ensure you are taking your time making financial decisions based on logic and necessity, rather than whatever fleeting emotion you’re experiencing.
Get your debt under control
It may come as a surprise, but not all debt is considered “bad.” For example, while a mortgage or a business loan certainly qualifies as debt, both can be viewed as stepping stones designed to get you to the next phase of life as a homeowner or business owner, respectively. Debt accrued to pay for superfluous spending is another story. It’s usually considered best practice to pay a credit card debt in full each month. If you are not making all your debt payments on time and in full each month, it could quickly spiral out of control and your credit could take a hit. So, make sure you prioritise getting your debt under control.
Build better financial habits with a professional by your side
Making sure you make the right financial decisions now can bring you peace of mind for the future. If you need help building or improving your financial habits this year, get in contact with us.
Dental & Medical Financial Services works with you to create a financial plan that works for you and your family.