Three ideas for better financial habits in 2021

How to Track Spending

Before working out any resolutions, determine where you stand. Where is your money going at the moment? Begin by creating a system for noting down all monthly purchases — this could be a handwritten list, an Excel spreadsheet or a special app (there are plenty of budgeting products in App Store and Google Play, free and paid).

Knowing how your money is spent, you can start planning. Do not judge yourself. If your financial habits need work, it is never too late to start improving them. Budgeting is like dieting — you cannot determine the best course of action without knowing the starting point.

Resolution 1. Save More

The pandemic has forced millions of Indians to become more frugal. Having a safety net is great advice for any period. Even a small amount put away every month is important. If the idea of saving does not sound appealing, reframe your thinking.

You are not depriving yourself of anything. Instead, you are paying your future self. The easiest way is to set up automatic transfers into a savings account. This way, you will not be tempted to spend the amount instead of saving it.

You will be surprised at the effects of such small changes. For instance, who likes paying their holiday spending bill? If you start planning today, you can figure out your budget in advance. For example, if $25 is transferred to the savings account monthly, multiply it by the remaining number of months. You will have a tidy amount set aside for your holidays, and even more, high interest if the account has a high-interest rate.

Earn or Save?

Some people might tell you that you should earn more rather than save. The wisest strategies include work in both directions. It is not necessary to change your current job. Consider taking up one of the remote forms of money-making, such as forex trading.

Over the past few years, India has seen a surge in currency exchange, and further growth is projected. Thanks to brokers like Forextime.com, you can make money from the comfort of your home, or even on the go. All you need is the right software, knowledge of the markets and some initial capital for a Forextime live account.

Education and software are completely free. For some Indians, Forex is a steady source of income. Making a profit is feasible if you study your chosen assets, avoid impulsive trading and hedge the risks.

Resolution 2. Pay Down Debt

If you have any type of debt, be it credit cards, consumer loans, or tax payments, paying it off is paramount. One of the methods is prioritizing obligations by interest. Deal with the highest-interest debt first to save more in the long run. Alternatively, you could move in the opposite direction, starting with the smallest amounts.

Resolution 3. Spend Less

Finally, work on your spending. Assess your present expenses to see if there are any unnecessary costs you could eliminate. Do you really need to order restaurant delivery so often? Do you watch all the channels you are subscribed to? What about gym membership? Identify any subscriptions and services that do not bring value and cut them off.

Holders of multiple credit cards benefit from debt consolidation. You may be able to transfer all balances to one card with low or no introductory interest (usually, it rises after the first year of use). Alternatively, refinance via a low-interest loan.

Final Words

It is never too late to change your habits. Make new financial resolutions and stick to them throughout the year. You will be pleased by the changes in your life. Becoming more financially responsible and stable is not so daunting. Just take your time to figure out the problems, do some planning and keep your eye on the prize. If you need an additional source of income, there are many opportunities, from freelancing to trading.

Siliconindia Magazine