Friday, 30 December 2011

Finance tips & money spending habits for New Year

The year 2011 is almost over and a New Year is coming with all its hopes and expectations. This time we can take some decisions about our money spending habits and financial planning tips which are helpful to secure our financial future. If you follow these decisions strictly you can meet your financial goals easily. So think a lot about these tips and take a positive turn in your financial life to improve your economic status in this New Year, 2012 onwards.

Spend as per your income: This is the first thing we must keep strictly. Whatever may be our needs try to satisfy your financial needs within your income. Yes human wants are unlimited and each and every human being is compelled to satisfy all their financial needs with the limited resources he has. So do not overspend and destroy your financial life with debt and loss. Fix a priority for your needs and satisfy the most needed items first with your limited income. When you divide your counted bread, divide it properly and wisely. When you need bread, do not go for cake, satisfy with bread. You can go for bread occasionally, only if you can afford it easily.

Differentiate necessity and luxury: Try to break your high spending habit. You must give priority for your necessities than your luxuries. Avoid all unwanted luxurious items to cut your budget. Do not go blindly after high brand names. Grow a habit of cheapest items without compromise quality. Brand names offer quality products, but remember that some non popular brands also offer high quality products. Make a market study before buy items. Fix priorities for your necessities and give only second or third choice for luxuries. I do not mean that you become a miser, only say that avoid your unwanted luxuries which increases your budget very high.

Stay away from credit cards: Credit cards are convenient to use. Purchasing items with credit card is very easy. But do not overspend while using credit card. Here also you should control your purchases as per your income, unless you will fall prey of the trap of credit cards. Use credit card for convenience, not as device for spending more. Pay credit card bills fully on or before the due date.

Avoid unnecessary loans: Now it is a fashion to buy things on loan or instalments. But each and every loan or higherpurchase attracts interest and a part of your limited income is for paying interest on such loans. So avoid loan and habit of taking loan up to a certain extend. At the same time, pay off all your debts starting from high interest loans first. Do not allow interest to eat out a major part of your income.

Start savings: Grow your saving habit from the margin money you earned by keeping all the above habits. Start a small monthly saving in the form or recurring deposit in banks or post offices, Systematic investment plan or any other form of investments which helps to grow your money to satisfy your future financial goals.

The abovementioned simple financial tips help you to satisfy your financial goals up to a certain extent in the coming New Year and this will keep up your financial discipline and spending habit which is useful for your whole life.

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