Are you tired of always feeling like you do not have enough money? Maybe it is time that you assess the way you handle your finances. Sometimes, it is not that you do not have big income but just the way you manage your money. In this article, we will share three important things that you should be doing that will eventually lead you to financial freedom.

  1. Spend wisely

First of all, you need to be mindful of your spending habits. Are you the type who goes directly to the mall when it’s payday and then goes to the office the next day feeling like you barely have enough to survive until next payday? Well, that has to stop NOW! You should learn to spend your money wisely. It is indeed challenging in the beginning but you can do it for the sake of your future. Here are some tips to help you get started:

  • Create and follow a budget plan including your budget for food, leisure, bills and others. You should be reasonable enough and squeeze in money for savings and investment.
  • Pay cash instead of using your credit card. Using credit card will only encourage you to buy more including expensive things that are way beyond your budget. So it is advisable to use cash on your purchases.
  • Avoid shopping. You should become more responsible and practical with your shopping expenses. Before you buy something you should first ask yourself if you truly need it. If not, then maybe you can think about it some more.
  • 2. Allot money for savings

It is advisable to determine how much you can save like 10 or 20 percent of your salary and then make sure to separate this as soon as you receive your salary. Most people have this notion that they will save what’s left from their salary. Well, that’s not very effective because you will probably just spend everything so the ending is that no more money left to save. Therefore, it is best that you have specific percentage to go to your savings and then separate it even before you pay bills and spend the rest.

3. Invest some of your money

If you have extra money, then it is highly recommendable to consider investing. One of the most reliable forms of investment is through stock market. You should consult a professional stock brokerage firm to help you get started. It is best to think long term goals so aside from your savings, you should also consider investing. This way, your money is moving and growing instead of just being dormant in the bank.

Having large income is indeed wonderful but most of the times, the breaking point is the way you spend the money. You can have large income but if you will spend it left and right on things that do not really matter then it’s just a waste. But if you will follow the three key things that we discussed here, you will be able to have financial freedom. You can finally feel more secured about the future.

By Kar

Dr. Kar works in the interface of digital transformation and data science. Professionally a professor in one of the top B-Schools of Asia and an alumni of XLRI, he has extensive experience in teaching, training, consultancy and research in reputed institutes. He is a regular contributor of Business Fundas and a frequent author in research platforms. He is widely cited as a researcher. Note: The articles authored in this blog are his personal views and does not reflect that of his affiliations.