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Tips for Developing Healthy Financial Habits

Moneymagpie Team 25th Apr 2023 No Comments

Reading Time: 3 minutes

Everybody has a specific relationship with money, whether they earn a lot or not as much as they would have wanted. To develop healthy habits with your finances, you do not have to be a professional accountant or financier. It is all about developing the right approach to spending and handling your money. In this article, you will discover some accessible and useful tips on how to adopt healthy financial habits.

Keep Track of All Your Finances

While it is common to monitor big spending, people often lose track of all the smaller expenses. Buying a coffee or a snack, paying for a subscription to a streaming service, and even spending money on transportation – all of these expenses might seem small, but they add up. If you see how much money you spend on small daily purchases, you will realize that you might pay hundreds of euros a month.

Monitoring both your expenses and earnings is a very useful habit that will allow you to see how much money you actually have left after paying for the bare necessities and how much funds you have each month for savings. Controlling your spending allows cutting some unnecessary expenses and allocate these funds toward your goals instead.

Focus on Eliminating Debts

One of the things that hold all financial objectives back is being in debt. With unpaid debts, it is extremely difficult to plan for your future and set various financial goals. To be able to save up properly and achieve any financial objectives, it is crucial to work towards getting rid of all debts first. Prioritize cutting off this kind of expense, and you will be able to manage your money much easier afterward.

Invest Money Instead of Saving All the Funds

While saving money towards different goals is important, it is also recommended to use some of your earnings for investing. Learning how to make your money work for you instead of lying in a bank is an incredibly important skill. People invest money online to make an additional profit and use this money for both reinvesting and allocating it to savings.

Many beginners do not know where to invest money online and are reluctant to try, as investing sounds challenging. Luckily, alternative investment platforms such as Quanloop are available for everyone today. Quanloop does not require a significant first investment, and users can start small with just one euro. Thanks to three different investment plans, it is very simple to begin your investing journey.

Make Financial Goals for the Future

Living at the moment is great, but in our economy, it is also essential to plan for the future. One of the most popular saving goals is retirement. Most people tend to set aside some money sometimes to have savings when they retire. However, you need to save up for such ambitious goals regularly and have a specific amount in mind to have enough by the time you retire. Most people forget about things like inflation as well, which is crucial, as one hundred thousand euros today will not be the same in a few decades.

Careful planning is important for both big goals like retirement or buying a house and smaller objectives like going on holiday each year or purchasing a new TV. It is essential to create a list of all your money-related goals to see how much funds you need for each of them. Here are some goals you can put on the list:

  • Retirement
  • Vacations
  • Buying real estate
  • Buying a car
  • Wedding
  • Study, etc.

In addition, it is advised to arrange them by the order of importance. If you make less money in a month or have unpredictable expenses, you can allocate funds to the more important objectives.

Do Not Skip Emergency Planning

Having your emergency savings always ready is a must. Nobody is immune to all kinds of unpredictable circumstances, such as getting into an accident, having a fire in your flat, facing natural disasters, etc. There should always be a certain amount of money set aside for such situations, and it is crucial to not spend it on other things.

Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.

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Jasmine Birtles

Your money-making expert. Financial journalist, TV and radio personality.

Jasmine Birtles

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