Cultivating healthy financial habits is always smart.
Many people don’t have enough insight into their finances, which can make it challenging to reach financial goals such as saving for retirement or having an emergency fund.
Whether you’re a business owner or an individual, the way you manage your finances matters. Here are five good financial habits to adopt today to get on your way to financial success and freedom.
Save 10% or More of Your Income
Aim to save 10% or more of your income to put towards retirement, in an investment account, or in a savings account for emergencies.
Ideally, you should have about six months’ worth of expenses saved for emergencies, such as a job loss or unexpected bills. Saving 10% or more of your income can help you get on your way to having more financial security and peace of mind.
Know Your Spending Habits
It’s impossible to save enough money without knowing your spending habits. You should know exactly how much money you make, how much you spend, and how much you save. Having this transparency around your finances is essential.
Tracking your spending habits can also help you make and stick to a budget, which can get you that much closer to achieving your financial goals. Part of tracking your spending also means carefully reviewing your credit card and bank statements to monitor for fraud and confirm charges.
Maintain Your Credit
Maintaining your credit is relatively simple, but something not everyone considers. To maintain your credit, always pay your bills on time, pay off your balance completely, and pay down debt, especially high-interest debt, as soon as possible.
You should also check your credit score about once a year to ensure it is accurate and know where you stand credit-wise. If you have poor credit or are trying to improve your credit score, a financial consultant can help you better manage your credit.
Create Financial Goals
Having financial goals will help you stay on track with your finances. You can make goals for how much you want to make, save, and spend, or how much you want to invest in retirement and other accounts.
You may also have goals to save enough for a down payment on a home, retire by a certain age, pay off debt, or start a business. By defining your goals and letting them guide how you manage your finances, you will be on your way to financial freedom and success.
Work With a Tax Professional
Working with a tax professional can help you properly prepare and file your taxes to avoid costly mistakes or fees that could impact you financially. Hiring a professional can especially be beneficial if your income or finances change every year, if you’re a business owner, or if you have multiple sources of income.
Scharf Pera & Co., PLLC works with individuals and businesses to keep their tax bills to an absolute minimum while ensuring they comply with tax laws. Contact us to book an appointment and find out how much you could be saving on your taxes as part of your good financial habits.