Welcome to the final part of our ongoing series: Improving your Financial Health.
Last week, I wrote about 2 habits: using a budget and reading more.
Today we will look at three other habits: planning for upcoming expenses, saving for emergencies and monitoring your accounts.
Small but consistent steps will not necessarily make any noticeable difference in a few days or weeks, but over months and years the difference will be huge.
Below are habits that you should get into right away! Perhaps you do some already but check it out anyway just to see if there’s something more you can do.
Habit 3: Plan for Upcoming Expenses
Planning for upcoming expenses is a great way to smooth your cash flow and avoid the sinking feeling of when you must pay over a large amount of money.
If you have a budgeting app you can easily create categories for upcoming expenses and allocate money accordingly. There are many budgeting apps, software tools our on the market.
You can however just keep track of things in a journal or spreadsheet.
What you really want to do is to list all upcoming expenses that you know of for the next 3 – 4 months and start planning to pay them.
If you earn a fixed income and the expenses are the same each month then it should be simple as it will form part of your monthly budget.
If you don’t have a fixed income, or the expenses are special things such as a car service, holiday, anniversary, etc. then you will need to decide how much money you need by which date, and then keep track of the savings.
Habit 4: Save for Emergencies
Saving for emergencies is a fantastic habit that everyone should be doing. As I’m sure you know life can sometimes throw curveballs at us which just mess up all our plans.
Perhaps unexpected taxes that suddenly need to be paid, a major car problem or just some home appliance may suddenly stop working.
This fund will help keep your cash flow smooth from month to month and you won’t have the stress of waiting for the next payday.
Habit 5: Monitor your Account
A really great habit to get into is keeping track of all your accounts. And by all I really mean all! From investments to store cards, bank accounts and everything else.
There are a few reasons for this:
👉 Knowing the balances in all your accounts and investments may give you better insight to your overall finances.
👉 Having the information may spark off some ideas or give you motivation to do certain things.
👉 If you have several cards and accounts and you find it too much admin to monitor them all then it is a sure sign that you need to simplify your financial life.
👉 Make a plan to cancel your store cards or close unnecessary accounts.
👉 Keeping track of your accounts can help you identify any fraudulent transactions. We live in a world where identity theft and electronic fraud is an everyday reality.
👉 Keeping an eye on all your accounts will help you notice trends that could lead to better financial decisions.
Implementing these habits may not seem like a big deal, but it’s the small and focused changes in habits that will turn your finances around and improve the overall state of your financial health.
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Happy to discuss how the above applies to you and your business?