Financial stability stems from healthy financial habits. Perhaps you believe there is never a good time to start learning more about finances and your own financial health. Although it may seem complicated at first, taking a systematic approach can help you build habits that will benefit you in the long term. 

Here are seven habits you can adopt to lead a financially healthy life in 2021.  

1. Save Money

There are often questions around why you should save that need answering. Do you have enough money for: 

  • Things you need now
  • Things you want in the future

Well, the simplest way to save is by spending less than you earn, which is easier said than done. Here’s how you can begin:  

  • Save at least 10-15% on average in order to maintain your lifestyle, even if you retire. 
  • Set this money aside as soon as you receive your salary. It’s better to not even think of this amount as yours. Whatever purchases or needs you have, you then make with the rest of your salary, which inevitably forces you to prioritize.
  • If there’s an emergency or an unexpected expense that makes you dip into your savings, be sure the next month to return that money, plus the money you were supposed to save anyway, and budget accordingly. 

2. Keep Tabs on Your Spending

Think of your early years of handling money: the time you started your career and kept a close watch on your spending habits. Well, now you’re a few years in and you may have lost the habit. Here’s how you can keep things in check:

1) If you don’t know what is essential and what isn’t, the best way to find out is by starting to track your expenses. This is a lot easier now since Indians are slowly adopting payments made electronically. Of course, don’t get obsessed about it; it’s okay to check your expenses even just once a month. 

2) If you’re having trouble doing this proactively, you can use an app. There are many that can track your expenses and send you transaction messages and emails. 

This will give you a better understanding of where your money is going, so you can keep yourself accountable and figure out what you can save on. It can also help you notice if you’re being lavish in your spending.

3. Set a Plan and Stick to It

The basic point of a budget is planning, not confining. If you want to make the most of your money, which is basically what personal finance is all about, then you need to plan for things:

1) Plan how much you’ll spend each month, based on what money you have after setting aside your savings. Do not exceed this budget.

2) Plan things like large purchases and account for unexpected expenses like a hospital visit or a punctured tyre by adjusting your budget or dipping into your savings.

4. Don’t Be Impulsive on Purchases

This is one of the tougher things to do. Impulsive doesn’t only mean buying the latest smartphone because it was salary day; it means spending excessively when there wasn’t a need to do so. Make small sacrifices for a larger reward:

1) Save where you can. Cook meals at home or eat leftovers, instead of ordering out, or wear clothes for longer; don’t shop for a new jacket when the old one is still good to go. Small choices like this go a long way. 

2) Plan. Plan your big-ticket purchases in advance. Keep a wish list and review it often to see if you really want to splurge on something. 

3) Opt for zero cost. Using “buy now and pay later” solutions or monthly instalments for more expensive purchases help you spread out the cost of your essential usage items and is a good way of sticking to your financial plan.

This money is what you could have otherwise saved. You can only achieve financial stability by reining in your spending. We can all slip from time to time, and that’s okay, but an impulse buy should be the exception, not the rule.  

5. Pay Off Your Debts and Loans

You can’t start fresh when you’re carrying financial luggage that’s holding you back. Like people, not all debts are created equal. A high-interest debt, like a credit card debt, is not the same as low-interest debt, like student loans