5 Best Ways to Take Care of Your Financial Well Being

Financial well-being does not only include the money in hand or bank; it is far broader than that. A person’s financial well-being is determined by his/her control over every day, as well as monthly expenditure, and also their ability to absorb a sudden financial crisis. Not just that, the progress towards financial goals and the overall freedom to make choices that contribute towards a happy life – are all determinants of financial health.

Here are 5 best financial planning tips to take care of your monetary well-being smartly:

1. Value money and adopt better money habits:

   It is important to understand the value of money and spend it wisely. And for this, you must have an accurate knowledge of your finances. So, do a small monthly exercise and list all your income and expenditure, and then assess where you stand. If your expenditure is more than income – it is a red flag, and you must take immediate steps to lower. This is possible when you adopt better money habits - such as make a note of your daily expenses, avoid loans, limit unnecessary costs, keep a good credit score, raise your net worth, and keep a hawk’s eye on bank balance, etc.
   

2. Save more spend less:

   This advice never gets old for any era - saving is the ultimate key for aspired financial freedom. You must shrink your expenses and save more than you spend always. To say your monthly income is ₹60,000, your aim should be to save at least 20% of initially and increase this monthly, until all your expenses in total are lower than your savings. Also, compare your spending month-to-month to stay put towards the saving goal. A piece of advice here would be to always ask two questions before any purchase – Do I need it? Is it worth it? Always looks at the broader picture; however, this does not imply that you to stop living your present, but the goal is - intelligent spending.
   

3. Set your financial goal:

   They say vision is everything, and it is so true in case of financial planning. As a responsible person, you must set your fiscal goal as early as possible; no age is the right age for this. Your financial goal could be retirement at 60, higher education funds, buy a house/car, pay off all debts, be an entrepreneur, or any other. Estimate how much you would need to save to reach your financial goal in your estimated time. It is important to check your progress timely and take the necessary steps in case of deviations.
   

4. Form an emergency fund:

   The future is uncertain and could have you confronting such demanding situations that can make a hole in the pocket if you do not have sound financial planning. Emergencies can take a toll on the future well-being, if you do not plant young and save for uncertainties such as sudden medical expenses, loss of income, reduction in income sources, etc. It is important to set rules for your emergency fund and use it only when a situation adheres to them. And in this world of technology, you could use automatic savings/recurring transfers to help create that emergency fund. Also, always direct all your additional money to this fund instead of splurging.
   

5. Make wise investments:

   It is important to set aside money for the future, but it is essential to understand that the money should grow and become ready for the times to come. Wealth kept idle is not a sign of a visionary individual; you need to make wiser choices and invest money in areas such as insurance - which are fruitful, help the funds grow while simultaneously provide for your future well-being. 
   

Future financial health is as vital as the current. For a secured economic future, you must sow the seeds now. It is never too late to begin!

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