Some may have heard of the terms, some may not, and some may have even generated their own types of income without realizing what type of incomes are they making day in day out. But before we go in more detail about those 3 types of income, we first look into the ideal steps or culture that we need to discipline ourselves in other to achieve our financial goals.
1. Set specific financial goals.
It is always important to establish a goal that keeps you in the proper mindset. An objective will help you remain focused. Doing anything arbitrarily will usually result in failure, because it is so easy to bail out on a mission with no objectives. Set a goal, whether it is a hefty savings or finally purchasing that car you have always wanted, goal setting gets things done.
2. Track everything you spend.
Every ringgit affects your overall financial life. It is important that we keep track of all the money we spend, regardless of how small a particular purchase is, because this will show us trends in our spending habits. This will also allow you to know yourself better. Do you spend more on useless or practical things?
3. Create a budget.
By having a budget, not only will you able to keep track of your expenses, you also get to manage every ringgit that comes in. By establishing a budget and patterning your spending with that budget, you will have plenty of opportunities to save money as well as eliminate unnecessary expenses.
4. Always examine your bills carefully.
Whenever you pay for something, whether it is your phone bill or your restaurant bill or credit card statement, always examine these documents carefully. There may be charges you did not make and you can shave off the total. This may seem like a really small thing to do, but by employing such a keen attention to detail, especially on your finances, helps you develop a level of discipline when it comes to spending and saving.
5. Have an emergency fund.
Set aside some money for unforeseen events separate from your savings. An emergency fund is like having your own personal insurance policy. If ever you find yourself in an emergency situation that requires money, then your savings and your salary are not going to suffer, thereby allowing you to still fulfill your usual financial obligations normally.
6. Prioritise paying your debt.
Your debts are going to get bigger and bigger as time goes by if they go unaddressed. Be sure to try to pay for your debts as often as you can. Make payments whenever you can, even if you still cannot afford to pay the entire amount of money that you owe. Once those debts are settled, you can truly be free financially.
7. Plan your retirement early.
Aside from savings an emergency fund, setting some money aside for retirement is also a smart way to use your money. The naked truth is that none of us can work forever, and at some point we are going to find ourselves in a position wherein we can no longer earn. A retirement fund is a great way to support you during that time.
8. Control your spending.
When discussing matters involving money, this is a subject that cannot be avoided. No matter how much money you make, or how wisely you invest your money, not being able to control your spending will render all that futile. Be sure to know when to spend, how much to spend, and why you spend in order for you to always properly gauge the worth of your spending choices.
9. Try to earn more.
The more money you have arguably gives you freedom. Whether you may agree with the thought or not, earning more money is always helpful. Be it with a part-time job, or taking a better paying job, making investments or even asking for a raise, there are always avenues for you to earn more. Look for those avenues.
10. Know more.
Managing personal finances is a skill, and skills can be learned. Be sure to read as many books, blogs and articles as you can to improve the way you handle your personal finances.
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