10 Productive Habits to Enjoy Financial Freedom

Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones. – Benjamin Franklin

Is your daily habit of managing your finance helping you to grow your wealth or depleting your financial resources? Here are ten ways to get away from debt, protect your nest egg, and be financially independent.   

1.      Savings: Did your parents teach you about savings while you were young? If you have consistently followed the habit of savings, the magical power of compound interest will make your savings to grow substantially over time. Following this habit persistently is vital because the source of your wealth is from your savings.    

2.      Think: Every time when you want to spend money, think, and ask yourself this question, “Is this a want or a need?” Be wise to resist spending unnecessarily.   

3.      Investment: It is not wise to keep your money in the bank; the inflation rate is much higher than the rate of interest that you can earn from your bank. You can keep your emergency fund in a bank but invest the extra cash for a higher rate of return. Do it regularly and take advantage of the average cost of investing.  (dollar-cost averaging – DCA)

4.      Budget: Do you have the habit of doing a budget and stick to it?  How about preparing your monthly cash flow forecast to see that you have sufficient funds to cover an exceptional expense item in a particular month? Read “Why you need to do a personal cash flow forecast” to find out more.

5.      Live within your means: The habit of not spending more than what you have requires self-discipline. It is the only way to stay out of debt and avoid bankruptcy.    

There is no dignity quite so impressive, and no independence quite so important, as living within your means. – Calvin Coolidge

6.      A simple life: In line with living within your means, a simple life is developing the habit of not getting more material things in life.  Live with what you need and not what you want. 

Wealth consists not in having great possessions, but in having few wants. - Epictetus

7.      Learn: Get into the habit of learning more about personal finance and the latest business news to see what is trending globally. Stay abreast of the latest development in those sectors that you hold investment.      

An investment in knowledge pays the best interest. – Benjamin Franklin 

8.      Insurance: It is important to review regularly your insurance policies to ensure adequacy in the sum insured and  the scope of coverage to meet your requirements  

9.      Health and fitness: The habit of following a balanced diet and doing daily exercise is to maintain optimum health. You will avoid incurring medical expenses.  

10.  Giving back: When you have a roof over your head and are not missing your three meals daily you are better off than many others who are destitute in this world. Be charitable and donate regularly to relieve the sufferings of those in need.

Do you have other good habits relating to personal finance? Please share your story.