The New Year brings hope to a better tomorrow. If you feel unhappy with how you did financially last year, 2021 is your chance to turn it around. Here are 5 bad money habits you should seriously drop in order to improve your finances this year.
1. Not Budgeting
As daunting as it seems, creating a budget every month allows you to allocate your money wisely. Having a budget will enable you to understand your spending habits.
2. Not Paying Yourself First
Paying yourself first simply means putting a portion of your income saved before the monthly expenses. Prioritize this habit so you can have buffer money ready in case of emergencies. Another way you can pay yourself first is by choosing to invest. Investing your money allows you to build wealth over the long term.
Read next – How to Invest in Mutual Funds for Beginners
3. Not setting Money Goals for yourself
Goals act as a compass that will directly guide where exactly you want to be financially. If you don’t set smart money goals every quarter, every month or every week, you will never know where you are standing financially.
4. Not Living Within your Means (or below if you can)
A big problem for many people is the constant habit of trying to impress others. Make sure you only spend on things you can actually afford so you don’t go in debt at the end of the day.
5. Not Investing Earlier
As soon as you’ve saved 3-6 months worth of your monthly expenses, build your investment fund! Investing is the best way you can make your money work for. Reach your financial goals faster by choosing to invest.
Read next – How to Overcome Your Fears of Investing