6 Helpful Ways to Making Smart financial decisions

6 Helpful Ways to Making Smart financial decisions

You may have heard a financial expert or business guru talk about a money-making mindset. A set of principles that people who are financially successful employ that seems to help them find or create lucrative business opportunities. Many of the world’s most successful businessmen will tell you that the secret to their success isn’t something they learned while pursuing an MBA. It is a series of habits and perspectives that they probably developed years before they made their first million.

The fact is that financial status is as much a result of our mindset and habits as our physical health and personal relationships. That is to say, that if you aren’t happy with where you are right now, you have the power to change it by changing your mind. You don’t need to spend thousands on seminars, financial advisors, or investments to see dramatic changes in your finances. With a few simple shifts in your habits and attitudes, you can begin to make the kind of financial decisions that set you up for long-term success.

Budget

The first thing everybody should do is to create a budget. This seems like a no-brainer but most people avoid confronting the numbers when they make decisions. In the same way, you might avoid going to see a doctor for a yearly exam, people are often reluctant to face facts when it comes to their financial health. They may already sense that something is amiss or fear that it is much worse than it actually is. In any case, running from the truth will only result in trying to diagnose a problem without running the proper tests.

Gather up all of your bills. Include large, long-term debts like mortgages and student loans. Review your transactions for the month. How much did you spend on entertainment? Clothes? Transport? Food? Gifts? Don’t forget to add these amounts. Now compare what you spend to what you make. Remember you should have enough money to save some every month. Most people would recommend that you set at least 10% of your income into a savings account every month.

Automate

Many people have a habit of procrastinating when it comes to money. They hate “giving away” the money they toiled so hard for. Others simply get caught up with their hectic schedules and lose track of their obligations. One simple way to avoid late fees or possibly falling delinquent is to automate as many payments as possible. This includes adding money to your retirement fund and your savings account. By taking the decision making out of your hands you relieve some of the stress associated with managing your money. You can set up a separate account just for automatic bill payments. Once you fund it for the month you have a better idea of what you have left for incidentals.

Insure

Life can be messy and unpredictable. Insurance is a way to protect yourself against the unforeseeable future. Farmers insure themselves against failing crops and natural disasters. We insure our vehicles in case of an accident. However, people often wait until later in life to think about life insurance. IN many ways car insurance seems like planning for the unlikely event of a catastrophe while life insurance feels like planning for the inevitable.

Isn’t your life a valuable asset that deserves protection? Many people avoid thinking about their mortality and thus, avoid talking about life insurance. However, representatives from reputable companies like singapore life insurance are trained to help you find a policy that meets your budget, goals, and lifestyle.

Educate

Business news may not interest you but it’s important to educate yourself about how money works. There are many great resources online that will help you get a better understanding of credit, taxes, investments, budgeting and so much more. Never lose your curiosity and apply the mantra of lifetime learning to your finances as well.

Reconsider

You’ve created a budget and seen that your lifestyle is simply not sustainable. You need to cut back but you’re reluctant to make the necessary changes and unlikely to be able to increase your income enough to save you from financial disaster. You could go back to sticking your head in the sand and wait for your doom, or you could shift your mindset. Whether you call it “keeping up with the Joneses” or FOMO (fear of missing out) many of us live the lives we think we deserve rather than the lives we truly desire.

Do you want to spend more time at home with your family? Perhaps a smaller house is the best option. Trading your trendy car for something more affordable with great gas mileage is an investment in your happiness and possible vacations. Spend less on eating out and discover your passion for cooking. Go through your expenses and decide whether the things you spend money on are things you really want or things that you think you should want.

Dream

Dreaming big means thinking long term. It also means resisting the urge to take short term gains. Developing this type of self-control and discipline will bust many of the bad habits that destroy our best laid financial plans. Impulse buys and gets rich quick schemes to lose its appeal when you are in pursuit of a dream. So, don’t be afraid to dream big and make decisions that will help you reach that goal.

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