Setting financial goals, just like any other goals, is not only extremely important but also greatly necessary. It will mean the difference between relaxing and enjoying your senior years, or growing old in mountains of debt.To successfully and consistently grow financially,proper financial habits will have to be developed, you will need to assess your patterns, and begin a quest to minimize debts, maximize savings, and gradually increase your financial security. Making these changes can turn out to be an internal psychological battle, and you will have to learn how to discipline yourself for this growth to be effective.
Discussed below are some of the top ten things you ought to do to consistently grow financially in no particular order.
1. Control impulse spending.
One of the biggest drains on finances is impulse spending. It is a highly detrimental financial behavior that is almost entirely based on one's emotional control (or lack thereof). So much money that could be put to better use is wasted away on impulse spending, online shopping, and regular eating outs. So before you take another sip of that $7 latte, or add another pair of heels to your collection, ask yourself whether in two years’ time you will be happy with the choices you made.
2. Improve your credit score.
A big percentage of your biggest expenses are bought on credit, right? It is vital to work on improving your credit score and minimizing on debts right now to avoid a situation in the future when you wish you had done this.
Whether it is student load debt, credit card debt or medical bills, your priority should be finding ways of minimizing, and eventually eliminating them. Your finances can thereafter, start being channeled into savings and investment s for the future.
3. Investments (focus on passive and residual income)
Simply put, let your money work for you. Let's face it; there is only so much time in one day. It, therefore, becomes a bit tricky to accumulate wealth on the side while all of your day is taken up working for others. Focus on building new streams of income through investments, for example, trading in stock, real estate investment or running an online business. Through this, you will find yourself making financial profits which can, in turn, grant you the financial freedom to be your own boss.
4. Have an eye for entrepreneurship
To be financially successful and thereby grow, you will not only look for ways to cut back or manage expenses but also, come up with innovative ideas on how to increase your income. There is a whole world of opportunities available out there on how you could leverage abilities and skills to generate more income. This ultimately will not only enable you to meet expenses but better yet, help you meet your long-term plans and goals.
5. Surround yourself with the right people.
Heard the popular saying ‘you become the average of the five people you spend most of your time with’? Well, I couldn’t agree with it more. Regardless of whether it is in terms of health, happiness, business or social matters, the people that you always hang around strongly, reflect on your personal life or on the financial choices you make. So start identifying experts in different fields especially where you are not an expert. Seek out good financial advisors, business lawyers, accountants, to mention but a few, and keep them in your close circle. You never know when you may need one of them.
6. Keeping oneself informed.
Think of anyone who is financially successful, and perhaps you will associate them with being avid readers. There is a high chance you will find them with several issues of entrepreneurial and money magazines. The secret is simple. Stay informed and up to date with the latest developments in the financial sector and any keep gathering ideas and tips that can inspire you in the business and financial industries. There is so much to be learned from others.
7. Set goals and track your progress
Anyone with dreams and ambitions that they want to accomplish in life needs to set SMART goals (specific, measurable, achievable, realistic and time-bound) and to keep tracking their progress. Doing so will prevent you from squandering time doing unnecessary things that will sidetrack you from reaching your targets. Financially, it will go a long way in managing to spend and saving more. Remember failing to have a financial plan is just the same as having a bad plan.
8. Build up your cash reserves
Let’s face it, we can never be too sure what will happen I the next two weeks, one month or year to come. One, you may lose your job, your family's bread winner may pass away, your house may burn down, or the economy may take a plunge. It is, therefore, wise and important to put aside money for emergency cases. Approximately 4 to 5 months’ salary out of your annual income should be stored away safely for such unexpected eventualities.
9. Automate your money.
In simple terms, this means that as soon as your money gets into your account, it is dispersed to your other accounts; be it savings accounts, retirement investment accounts or to pay off fixed bills, automatically. This will not just help to save up on time but also prevent you from wasting money unnecessarily. The secret is to make it as easy as it is on yourself. Your priorities will remain in check, and there may even be enough left over for investments
10. Set aside money for avoidable expenses.
Begin by making retirement plans, taking up insurances and setting aside money for college tuitions, house mortgages, etc. Because let's be honest, these costs are unavoidable. It is, therefore, more realistic to start planning and setting aside funds for them as early as possible, than getting overwhelmed with them later.
Always remember that, if you are going to grow financially, and build on your savings, your withdrawals will have to be outnumbered by your deposits, not just in quantity but also in magnitude. Transforming your financial position will take up a lot of strategy and effort, but the outcome is sure enough worth it.