The last time we gave tips to handle finances, it was met with a lot of positive feedback from you guys. Today, we’re giving you more tips on how you can handle your money right! Financial independence from any sort of debt or support is one of the best feelings there is on this green earth. So we want to make sure that we provide information that you can utilize as soon as finish reading this article.
Track Your Spending
We’re serious about this one. You really need to keep actual track of where all your money goes. This means hoarding receipts until the end of the day where you can list them down properly. This also means you need to spend a bit of your day tallying everything that you have spent that day.
Doing this will enable you to see where the leaks in your income pipe are! The introspection that you can achieve when you track your finances is the foundation of even better financial habits. You should start keeping a finance journal. Or you can download an app to make things easier.
Do Regular Lifestyle Checks on Yourself
While this is not the most pleasant task to do, it is truly necessary. If you think that your personal biases might get in the way, enlist a tough love sort of friend or family member to help you out. Always remember that you are doing this because you want to be in a better financial standing. While you may not always like what you hear or own up to regarding your lifestyle, you have to suck it up.
When you realize that there is a huge chunk of your life that is completely wasteful, you can use that knowledge to empower better financial decisions.
Never Neglect Your Sinking Fund
The concept of the sinking fund is that it is the amount of money that you will tap into if you ever find yourself in between jobs. Normally, the sinking fund is around 3-6 months worth of your annual income. This should be neatly tucked away in a bank account that is strictly hands off. Most individuals, who successfully have sinking funds and never used them, now have a neat amount tucked away. The best part: it accrued interest while it was just sitting there!
There is more to life than counting pennies, yes. However, there is no shame in making sure that you have all your ducks in a row—financially speaking, anyway. There have been too many financial horror stories that have been shared online and through family gatherings. It is time to take a better and more active role in managing your finances and not fall into the mistakes that previous generations have made.
Which tips are you looking forward to applying in your personal finances?