Important money habits are built over time, so managing your time effectively will improve the state of your finances. Ask yourself, What are your financial goals? What do you need to change or improve on to manage your finances better? Just like with any other goal, by consciously building these healthy financial habits, you’re bound to get your desired results.
Create an additional source of income
An additional source is an integral step in escaping the rat-race (living paycheck to paycheck). The pandemic might have given you free time into figuring out how to generate extra income. Your next step is to come up with a plan and put your plan in motion.
From starting a side hustle to building a diversified investment portfolio, multiple income streams will always lead to healthier finances, especially when combined with smart and healthy spending habits.
Build a buffer
Now is a good time as any to practice frugality. Avoid impulse buying, create a budget that works for you, and stick to it. By implementing a budget, you can avoid money pits and save up spare cash for emergencies.
Those that had a previously established emergency fund when the pandemic hit can testify to how having one softened the blow on their finances. Try as much as possible to replenish what has left the fund, and if you don’t have an emergency fund, now is the time to start building one in a savings account with high interest.
Get rid of bad debt
Being debt-free is a lifetime commitment that requires you to always live below your means. However, some extenuating circumstances can land you in a pile of debt. The best thing to do? Start prioritizing paying them off! Pay off your high-interest debt first and try as much as possible not to incur any more debt.
Track your spending by creating and following a budget. This will help manage what you have more effectively. Once your overall spending falls in line, you’d be able to find the balance between paying off debt and working towards financial stability.
Invest
Most people have bad savings and investing habits that inadvertently reflect on the state of their finances. A healthy financial life requires you to allocate 20% of your earnings to your savings and investments.
Take advantage of the opportunities Fintechs in Nigeria, like Overwood, offer to make investing easier. Start your investment journey with OVERWOOD www.overwood.ng.
If you’re finding it difficult to save and invest diligently, modify your lifestyle to support investment and savings automation. This is one of the best ways to simplify and improve your financial health.
Educate yourself
The more you improve on your financial knowledge, the better you become at managing your finances. Reading a personal finance book is a great way to start, and the knowledge you’ll gain will prove invaluable.
You can also take courses focused on an area of financial development you’re interested in, and talk to professionals in the finance industry. Spending time to learn more about your personal finance can be enlightening, and when this knowledge is strategically implemented, the effect will be transparent.
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