The new year is a time for a fresh financial start. But you see, nothing changes in your personal finance if you still stick to habits that limit financial growth.
Bad financial habits can wreck even the highest salary earner, leaving him or her with an empathy wallet at the end of a fiscal year.
Therefore to avoid repeating the same mistake in this new year, you need to start by recognizing the bad financial habits to leave behind.
Here are 5 financial habits to leave behind in 2022
1. Not Having Savings Goals
Having an idea of what you want to achieve for the month, or year will help keep you focused on growing financially.
Setting a financial goal will give you an understanding of why you need to save, and how much you need to save.
When there is no reason to save, then reckless spending will be your forte. You can only break out of a carefree spending habit by setting savings goals.
Remember, your goal should contain the reason for saving, the amount, the target deadline, and the strategy to implement. It could be short-term or long-term.
Once you are done listing your financial goals for the year, you can begin to make necessary budgets.
Your budget entails the amount of money at your disposal. Your goals should be factored into your budget alongside your wants and needs.
With your budget, you can confidently set aside a specific amount of money every month to meet those goals, needs, and wants respectively.
2. Not Sticking To A Budget Plan
It is one thing to plan a budget and another to follow through with it. When you do not follow through with a budget plan, you are liable to fall into negative spending habits without a budget.
Sticking to a Budget Plan will help you track expenses and know where you are spending your money. You can make use of a shopping list whenever you go shopping so you don’t end up window shopping.
There are lots of budgeting plans you could follow; the 50/30/20 rule, the envelope method, and others. Find the one that appeals to you and follow through with it.
3. Not Automating Your Payments
Automatic bill payments are scheduled payments for utility bills from a financial institution. Autopay will help you streamline your finances and avoid debt.
If you are not automating your payments, you are likely to miss your financial goals like paying for rent, electricity, and other needs, and direct your money to unnecessary wants.
4. Taking Payday Loans
You should never take out a payday loan to meet up with your expenses. This is a bad debt and will sooner or later crumble your personal finance.
Whatever need or want your income cannot cover should be put on hold, until you can squeeze out a space for it in your budget.
5. Not Having Emergency Savings
Emergency savings funds are separate savings used to cover unforeseen expenses. Having emergency savings would help you keep away from taking loans during an emergency.
Conclusion
Whether you are an entrepreneur or a salary earner, taking responsibility for your finances will help you grow your finances tremendously. These steps discussed above will help you keep your finances in check this fiscal year.
