To be able to manage your cash well you need to have financial character. According to psychologist it takes like 21 days for a behavior or habit to become a personal character. Therefore, the habits you form can easily end up control your thoughts in a positive or negative way. It is up to you to decide which habit is good or bad and thus adjust, especially when it comes to financial issues.
It is possible to make a conscious decision to adopt good financial habits just as it is possible to know how to behave when in public. The first thing to do is, have a financial plan. Just as someone once said, “If you are going nowhere, then any road can take you there.”
The best approach when drawing a financial plan is to split it into two; long term and short term goals. In case you want to purchase a house, it would be better to start saving like $ 1,000 every month for deposit rather than saying I will buy a house in 3 years time. In other words, this is called budgeting, and allocating some money towards a project helps you stick to the plan.
As for the short term goals which include things like coming up with an emergency fund or starting a small business to supplement your income, you can plan for them in a period of at least two years. When you budget, it helps you to save and avoid overspending on things that would necessarily be of less priority.
The secret to financial planning is being specific in terms of amount and what you want to achieve. In addition, it is having time lines of when you want to attain your financial goals.
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