This new year, let’s have the resolution to have a secure grip on our finances. And let us adopt one new money habit today and drop the one that’s been holding us back. To protect the financial future, one needs to identify bad financial habits and understand the ways to avoid those inaccuracies on a regular basis. As poor money management can have deleterious and a long-term concern on the financial shield. It can take years of experience to develop adequate financial habits, but the paybacks of being responsible with your spending are well attributed. When one have a disciple approach towards money, at that time you can keep the family out of debt, and other financial worries.
As quoted, “How I live tomorrow is how I invest today”. So let’s follow 10 dos and don’ts to keep up financial health this year.
Dos
Do research- While planning the finance do comprehensive research to win a chance for a long-term success.
Stick to a budget- One needs to plan the financial future and to achieve that stick to the money plan. Always reminisce, your budget is not based on the open floor notion; it has to be targeted to achieve the pecuniary objective.
Adopt saving mantra-The earlier you start, the less needed out of the pocket to save, and the more prospects you’ll have in terms of compounding and amplifying the money.
Pay off your credit card- Avoid the unnecessary stress of paying off debt by following the cardinal rules of satisfied financial health, so plan the budget and pay off the credit card bill first as prime objective every month.
Establish a rainy day fund- Unfortunately, we can expect to have stressful days in life, so plan ahead for any unforeseen predicaments. Set aside the corpus of six months of daily expenses for an unexpected emergency. If you have large expenses for children or family, you need a colossal safety net, however, if the house is paid off and you’re debt-free, you’ll perhaps be less stressful.
Review your insurance- Merely buying an insurance policy is not an end, but perceptively scheming it and reviewing it in the regular interval is more important. Having a track of investment strategies and calculating the ultimate objective of that plan is imperative to maintain the healthy financial platform.
Diversify your investment-Diversification in the investment portfolio protects from losing all your assets during the market dubious situation, so a well-maintained portfolio is conducive to achieve the financial goal moreover, inducing multiple investment attitudes would create new horizons to accomplish the target faster.
Set up automatic savings- Once we automate the process, we are safer, as it is the easiest way to grow the money. Create a consistent savings’ mechanism with your saving or investment account, as it will safeguard the money and will lead towards the longer-term goals.
Have check on credit score-Overlooking this fact can be prejudicial to your financial health. In the UAE, one can obtain the copy of the report by giving a minimal cost to Al Etihad Credit Bureau, which is the official credit bureau, to have a regular check.
Retirement saving- It is quite critical to plan for retirement and try to designate part of the monthly salary towards that deposit. In the UAE this is yet not a common practice but in a few countries, employer designates a portion of income towards the pension plan. And of course, the way saving works, it’s better to do it earlier.
Don’ts
Don’t chase yield– Have patience whenever you are investing, whether it is stock market or asset-based investment. With the movement in the global financial market, the asset value could fluctuate, however, it’s recommended to keep yourself composed and carry on with the long-term investment strategies.
Don’t spend more than you’re earning– Spending more than your income enables to hoard debt over the period. So, stop spending more by reducing the expenditures and a further count on the income that can pay for the need and want.
Don’t pay high interest– With higher interest rate, you lose more money. So preferably, if the investment returns are lower than the borrowing cost, settle the high-interest loans with the funds available so that the net cost could be brought down at an optimal level.
Don’t spend recklessly- Replace this habit with an honest financial plan, and take the amount from your income, which could spend on yourself for debt freedom. So with the little watch on the spending habit, one can draw more savings this year. Ideally segregating in wants and needs effectively could control monthly spend.
Don’t skip saving– Spending all of your income and overlooking the need to save is careless. It is expected that money is needed in the future for unforeseeable reasons, hence set aside a fixed amount and ensure to regularly deposit to your saving pool to secure the financial future.
Don’t get into debt– Always be realistic. Draw the financial plan and work out what you can afford; this will help to draw a line to avoid debt when you are planning the financial health. Also, keeping a close look at your lifestyle and cash management would avoid the falling into debt trap.
Don’t ignore advice– Keep in mind, your financial advisor is similar to your doctor with whom you can’t afford to say lie and his/her advice is worth earshot. Certainly, the expert guidance can help to boost or mould the current investment strategy fruitfully; also they would keep you updated with new products available in the financial market.
Don’t ignore core responsibility– To have a stable financial life it’s important to prioritize your financial commitments as this will support to form prudent spending choices. This is significant, since the insignificant spending decisions you carry out now, will certainly impact the financial security health into the future.
Don’t exceed credit limit and pay on time- Avoid spending above the given limit and schedule your credit card payment on time to maintain the credit score performance. Also, ensure to keep the repayment of full settlement on the utilized limit, as this would evade falling into the trap of interest or profit repayment of the balance amount, equally this is a major pitfall to accumulate debt.
Don’t forget to revisit your financial plan- A good health, be it physical or financial, it is extremely imperative to monitor it. Even the best financial plan needs to be amended as life progresses. Check in at least every other year to be sure that your goals are still pertinent and that you’re still on track to realise them.
As it’s rightly said, “A Goal without a plan is just a wish”.
Along with our short investment tips, do connect with 4C Mortgage Consultancy certified consultant, and let them help you to plan your investment in Dubai. 4C Mortgage Consultants provide best mortgage consultancy for a resale property, new purchase property, mortgage refinance, off plan purchase, construction mortgage, project finance, commercial mortgage, buyout, equity release, Non-UAE Resident mortgage in Dubai. Follow us on Twitter, Facebook, and LinkedIn and keep yourself updated with more home buying tips.
By Dhiren Gupta
Source: Complete Article Published in Gulf News- Friday