Personal Financial Planning Tips You Need to Know
- Financial Literacy
- By Penny Lane
- Apr 08, 2021
- 0 Comments
You’ve probably heard the saying money can’t buy happiness. Well while that may be true to a certain extent, having financial stability and not having to worry about your finances makes life a lot easier.
As someone approaching her late 20s, there are a lot of things, and okay, financial mistakes I’ve made early in my life that could have spared me from headaches. While I can’t control my background and the economy we’re currently in, I have picked up quite a few personal money management techniques that have helped me take better control of my money.
Early in the lockdown, I impulsively added things to my cart as a way of compensating for being stuck at home. While receiving packages in the mail did make me feel better for a few days, seeing the damage it did to my bank account didn’t. Did I really need a new pair of shoes during a pandemic when I had nowhere to go? Not really. So I learned to find a better outlet for my frustrations like finding new hobbies such as working out (saving money and getting fit – hitting two birds with one stone!)
2. Track my money
As I mentioned earlier, I had a bit of an add-to-cart problem. I wanted to track my spending, trust me I did. But I always found an excuse to put it off. So, I honestly don’t know how much I spend in 2020 alone. I’m guessing it’s a lot more than I’d care to admit. Had I been more diligent with tracking my money, I probably would have seen how much I was spending earlier and found the willpower to stop impulse shopping sooner.
A good financial tip to take note of is to always track your money. This includes how much you make, how much you spend, and how much you save. Set a budget for yourself regarding how much you can realistically spend each month. Segment this based on necessities (food, rent, utilities) and your “fun” money or something to treat yourself with. Just because you’re saving money doesn’t mean you should deprive yourself completely. Set aside a bit of money that you can use to buy whatever you want, completely guilt-free. You can choose to spend this money monthly or perhaps save it for a big-ticket item for some other time in the future.
3. Invest in insurance
When I was younger, I thought insurance was just for old people… or at least people who were married with kids. When I spoke with a friend who was a financial adviser and he crunched the numbers, it quickly dawned onto me how mistaken I was. I learned that insurance could protect me from a number of things: medical emergencies, accidents, or even protecting my savings. When he showed me the spreadsheet containing the different premiums to pay, I realized how much money I would have saved (and earned) if I had just started investing in insurance at a younger age.
My financial habits have gotten a lot better with age, but I still have a few slips here and there (curse you, 11.11 sale!) but hey, I’m only human. I’m glad to say, however, that I’ll be entering my 30s with a comfortable amount of savings in my bank accounts and investments to boot. So a few treats for myself here and there won’t hurt.
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