5 habits to become financially secure
Ever looked at a friend who has everything together and thought ‘what’s their secret?’ Here are 5 habits you
can implement to help achieve financial security.
Believe it or not, being secure financially doesn’t involve magic or an outrageous stroke of luck.
Avoid get-rich-quick schemes which are ramport as people try to expose those that are vunerable.
More often than not being financially secure results from good habits and discipline, such as keeping track of your finances, cutting back on
expenses, and planning ahead.
Here are five habits you can develop that will help you become the awe of your friends and family.
Habit one: Set goals
It’s time to take control of your financial security and a great place to start is to identify short, medium, and long-term financial goals.
These might be saving for a family holiday, making additional contributions to your superannuation, paying off
expensive credit card debt, or just keep it simple and save a set amount each pay-day.
You should write these down and have them somewhere that you can see on a daily basis to remind you if you go off track.
Habit two: Create a budget
Creating a budget is an incredibly important step to achieving your goals as you work towards your financially
Rest assured it’s easier than you think using a good budgeting tool. And there are plenty of helpful apps and
websites out there to choose from. We tested a few and liked the simplicity of ASIC’s MoneySmart Budget planner.
- Calculate your household’s monthly income: Look at your payslips or bank statements to see how much
is going into your account on an average month.
- Tally your monthly expenses: Check your bank statements, bills, and receipts to see how much you’re
spending. Don’t forget to factor in the big-ticket items you purchase less often.
- Remember your goals: Make an allowance to put some of your income aside to achieve your goals. Can
you afford to save 20% of your income or do you start a bit lower and automatically save 10% each pay?
- Crunch the numbers: You’ll now have a summary of how much you’re saving, or losing, each month.
Don’t forget to save a copy.
- Find saving measures: Boost your savings, identify, and cut back on unnecessary expenses. That might include takeaway coffee, restaurants, or subscription services you rarely use.
The first few months of sticking to your budget will be the toughest, so start by setting a realistic budget.
Sticking to consistent saving will mean that you can build up an amount that can be used for a significant goal,
like paying off a car loan, or saving a deposit for your first home.
Habit three: Optimise your bank accounts
Give your saving efforts a big boost with the checklist below:
- Streamline banking – Get paid into an account that’s not accessible by debit card. Pay off your monthly
essentials first, such as rent and utilities, then transfer your budgeted savings into a separate account.
Finally, only put as much as you’ll need in a spending account. That’s this month’s budget.
- Bank fees – How much are fees eating into your savings and spending accounts? If you don’t know, find
out, then shop around for a better deal.
- Credit cards – Tackle your outstanding credit card balance, check to see if you own any credit cards you
no longer need. The sooner you can stop using them and pay off the balance the sooner you will have
extra money to put towards your goals. Remember late payment fees and interest can really put a dent
into your savings.
Habit four: Track your spending
You need to keep your eye on the ball at all times. That’s because it’s one thing to create a budget and set
financial goals, but entirely another to stick to them.
So set aside 15-30 minutes each week or fortnight to make sure you’re keeping on track. This regular review is
also a good opportunity to identify any expenses you don’t really need. Your streamlined bank accounts should
make this very simple to track your progress.
With the ease of tap and go, we can easily forget where our money is going and how much we are truly spending.
Notice the spring in your step if you’ve stuck to your budget and saved towards your goals. Remember how good
Habit five: Plan for the unexpected
Your income is fundamental to achieving your financial goals, so for financial security, you should be confident
that you have adequate protection in place.
Ask yourself how quickly you would burn through your savings if you were unable to work for three to five
months? Or even longer?
By having different types of insurance you can help protect yourself and your family when you need it the most.
Taking out the right cover for you means that you can be confident that if something unexpected did occur, your
efforts to become financially secure are protected.
If you’d like to explore some options to help meet your financial goals or review your current financial measures
that in place, reach out and get in contact with us by emailing email@example.com or calling us.
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The material shown in this article is for general information purposes only. It is not intended to be, nor should it be read as specific personal investment or risk advice.
Before acting on any of the information contained in this article you should obtain special advice from a specialist investment or risk professional, which is appropriate to your specific investment or risk needs, objectives, and financial situation.
Whilst all care is taken in the preparation of this material, no warranty is given with respect to the information provided, and accordingly, no responsibility for errors or omissions, including responsibility to any person by reason of negligence is accepted by RP Wealth Management.
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