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Financial Habits | XL Financial Blog

Good Financial Habits

Posted on 10. Jun, 2013 by in Financial Planning

Give Yourself A Worry Free Financial Makeover

How do you know that you do not have good financial habits?  Some may answer that they never seem to have enough money to buy what they want.  Others may say that their credit rating is sub-par.  Yet a third group will say that if they are losing sleep over money, then it is time for a financial makeover.

Assess Your Situation

Some are afraid to take a good look at their finances.  Most however, are just too bored by the idea.  Who wants to sit down and work with numbers for an hour or more?  On the other hand, most people also tend to overestimate their spending power.  This leads to a general trend of spending too much.

Watching your finances on paper may not be all that exciting, however, it is a lot better than getting into big financial problems later, such as not being able to pay bills, or not being approved on a home loan.  This personal financial assessment can pay huge dividends down the road.

Create a Budget

Start by writing down a rough budget.  It should be simple and contain your income and expenditures for each month.  There is no need to track every soft drink you buy, just put together something that is easy to refer to on a daily basis.  Having a planned budget that you keep track of daily will make it much easier to see the big picture.  This is the first step to developing good financial habits and controlling your finances.

Make A Plan and Invest in Your Future

A budget can uncover problem areas.  It will help you focus on the key decisions: do you need to make more money?  Do you need to change the way you spend?  Set goals of how you would like your life to change a year from now.  You can choose to improve your credit rating, or perhaps save money for a trip.  At that point, design a plan to make it happen.

As you begin to see how good financial habits can improve your quality of life, it will become easier to budget and plan, and to do so effectively.

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