“It’s not your salary that makes you rich, it’s your spending habits,” Charles A. Jaffe.
You have complete freedom to spend the money you’ve earned, but maintaining a healthy balance between income and expenses is the key.
Personal finance is defined as the way you manage your money and make financial plans for the future. Income, expenses, financial decisions, and activities all have a role in one’s financial well-being. There is no way a person can go broke if all these are balanced.
5 key Rules To Have A Financially Healthy Life
Managing money in a way that allows you to save for the future does not imply that you should ignore the present; it simply means that you also have complete control over your finances. Personal finance management entails setting aside money for fun, other purposes, retirement, emergencies, and future savings.
1. Do the calculation
When it comes to personal finance, people tend to ignore the importance and leave them to chance. Spending a little time over the numbers can help anyone from being bankrupt.
2. ‘Don’t go broke trying to look rich’ rule
As one starts making more money there is a tendency to spend more money. Competing with friends or co-workers’ lifestyles and trying to match with their lifestyles is an unhealthy practice that must be avoided.
3. Know your ‘needs’ and ‘wants’
Needs and wants are not the same things. You need food to survive, but want a row of luxury cars in your garage. Think and plan before you spend on your ‘wants’.
4. Save Early
It is never too late to start something new. Saving a small sum of money from a younger age is better than cutting off your expenses along the journey.
5. Emergencies can be casualties.
Emergency expenses are the ones that are out of your daily expenses. An unexpected hospital need, economic depreciation, or anything of that sort may not affect your financial stability if you have got a certain amount saved for emergencies.
At SimpleAccounts, we make sure that you have a healthy financial life with on-time financial reports, automated expense tracker, and more.
