Good financial habits are easy to cultivate provided you start early. Here are some pointers that can help you reflect on your lifestyle and gauge its impact on your financial life.
While there are obvious factors to determining your financial future, it’s often the subtle things that sculpt our ways with money; the things that we sometimes don’t even consider to be things. Yes, if you wish to have a clear road map of your financial journey ahead, make sure you know what to do, but also expand your awareness of what you’re doing as well.
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Wonder what those commonly-overlooked factors could be? Let’s start!
Factor 1 – Entertainment
Each of us is entitled to live life on our own terms as long as it doesn’t cause harm to anyone else. However, the world runs on money, and hence, your finances are directly impacted by the choices you make. While the more obvious factors such as investments and other things are commonly talked about, not many take time to analyse how money is flowing towards your entertainment expenses.
For instance, let’s say you love to party and make sure to make every weekend count by painting the town red (be sure to follow COVID-19 protocol!). While there’s nothing wrong in that, it can be really hard to shelf up some money for a rainy day because going out has become an expensive affair in most cities.
Developing a sense of awareness about how your money is being spent can be a big plus, especially if you start young. We’re not saying you need to account for every cookie you eat; just try and be aware that the cookie costs you something.
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Factor 2 – Consumption
Habits can either be as common as a cup of coffee or as unique as, well, each of us! It’s hard to write a blanket list for everybody, so habits are best analysed on your own. For instance, a habitual coffee drinker may spend much more money on his or her choice of beverage than someone who isn’t too dependent on caffeine to get them through the day.
Similarly, smokers spend a good amount of money on cigarettes and drinkers spend more than they can remember (hah!) at pubs. To figure out how you’re spending your money on each of your habits, you can first identify them and list them down. Even rough estimates can be helpful here. The point is to be aware; not to be paranoid.
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Factor 3 – Fitness
Yep, this one’s a big factor. Not only does your fitness level influence your health-related expenses, it also shapes your food choices. All these can have a big impact on your finances. Of course, if you’re a gym goer, that’s an added expense for you when you compare yourself to someone who doesn’t work out, but in the long run, you’re investing in good health, so cutting back here is not necessarily the way to go. When it comes to food choices, maintaining a sustainable diet is good for your health as well as your pocket.