Simple things like unplanned trips to restaurants, unmonitored use of credit cards, or giving in to purchases because of influences are some examples of financial distractions that many people can relate to. They are the factors that may impact decisions as to whether a purchase should be made or not.
Financial distractions will keep you from achieving the goals that you aimed for. It can get in the way of your quest for financial freedom, especially if you fail to implement strategies to defer them. If you want to stay committed to saving for your dream home, opening savings account for your travel goals, starting a business, and other financial goals you have set at the start of the year, take note of the eight good spending habits to keep you focused.
8 effective spending habits to keep you focused on your goals
1. Automate your savings.
Is saving money a challenge? Simplify it by setting up automatic transfers to your personal savings account. Pay yourself first ensure that a part of your income will go into your savings or emergency fund.
2. Keep track of your accounts and credit card spending.
Make sure that you are aware of your account balances. The accounts you maintain may impact your financial status, especially if you won’t do balance checks from time to time. Keep in mind that there are balances that you need to maintain to prevent charges.
When issuing cheques, make sure that your account will be adequately funded to avoid bounced cheques. Aside from preventing penalties, this will also help you maintain an excellent financial record which you’ll find helpful when applying for loans. You also need to monitor your credit card spending to avoid high-interest rates due to unpaid balances. Make sure that the amount you’ll spend will not be more than your actual earnings.
3. Plan your shopping trips.
Make it a habit to plan out your shopping trips. Heading to the store now and then for a few items may make it difficult for you to control your spending. Make a list of the essentials to buy and identify how much you could spend on shopping for a certain period. This will help you stay in control of your expenses, avoid impulse buys, and prevent purchases that you don’t really need.
4. Pay your bills on time.
Consider your bills as obligations that you need to settle before they go past their due dates. If not, the fees and penalty charges that they may incur will derail you from your financial goals. Pay your bills on time to keep your financial life in control. This will also keep you from paying unnecessary charges and using money that you could have allocated to your savings.
5. Understand your needs and wants.
Be clear in identifying what your needs and wants are. Understand the differences between the two so you can assess your priorities and focus more on what really matters. One way to do this is by creating and sticking to a budget. This will help you establish financial discipline so you will have enough money to spend on your needs and prevent unnecessary expenses at the same time.
6. Use unexpected earnings wisely.
Use additional income from salary raises, bonuses, and side hustles as an opportunity to save. The initial amount you planned to save should grow as you earn more money. If your salary is higher now, your savings allocation should also increase. But remember, it’s not wrong to enjoy your extra earnings, so you may choose to allocate a certain amount to your savings goals and the remaining part for your personal use.
7. Allocate funds to insurance and investments.
Investment and life insurance are two things you should consider to help secure your financial goals. One of the top reasons to consider the two is their role in keeping you and your loved ones secured and assured of a bright future. No matter what uncertainties may arise, you can make your money work for you smartly. Aside from having the funds you need for emergencies, you can also potentially enjoy higher gains from your investments.
Sun Life offers VUL products such as Sun MaxiLink Bright and Sun FlexiLink. Both are affordable investment-linked insurance plans that combine the benefits of a life insurance plan and investment so you can have peace of mind while your money grows.
8. Monitor your progress.
You’ll appreciate your efforts to stick with your financial goals better if you will monitor how you are doing and how near or far you are from your goals. Have you paid the debts that you planned to get rid of? Is the
money that you want to use for traveling or buying a property almost complete? Keep track of your progress. The results of what you do will keep you motivated and even inspire you to ramp up your efforts.
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It’s not too late to pursue the financial goals you’ve set during the start of the year. You may encounter obstructions that will cause you to struggle to make them happen, but you can foster the discipline to overcome them, especially with bright spending habits.
Be wiser this year by jumpstarting your good spending habits so you can make your financial goals come true. Sun Life as your partner for life can guide you through your quest for financial freedom. Talk to one of our financial advisors today.