2020: to some, it is a fresh start, to others, a new year of possibilities. However, 2020 is an overhaul in life, a new decade, urging you to start afresh. If there is one thing which we millennials could possibly restart, that is our budget. We have quenched our desires and emptied our pockets in the process, so maybe, 2020 is the year when we pull up our financial socks and get back in the game. For Gen Z, probably it is the best time to move a little over the diet detoxes and make room for another detox. We are talking about Financial Detox: a practice that is much needed. After all, while your bodies may be lean and thin, your bank account needn’t be so.
So, what is financial detox? More importantly, how can that be incorporated in our life so affected by consumerism and capitalism, in a gradual manner? That is exactly what we are attempting to tell you here.
Count your Assets
In simple words; calculate your income wisely. Include every income that you get, salary with its fixed and variable components, and other professional work for which you may get paid, over and above the salary. More than the income tax department, it is you who needs to be aware of how much are your funds.
Asses your Liabilities
While counting your assets is important, it is equally important to know about your debts. We live in the day and age when we want everything too soon, too early. Hence, the credit cards and loans have been high on demand. While it is not wrong to have credits more than cash, it is advisable to take stock of your liabilities and know where your limit of balancing the same lies.
Save to evade that Stress
Remember when your parents constantly told you to save? They were right. Spend, as long as you know where to invest and save. Make a portfolio that is equally traditional and modern. Also, maintain a healthy balance of fixed and current savings, so that you have cash or bank in hand for emergencies, as well as investments for future contingencies.
Control that Urge
Every time you wish to spend on that fancy watch or that luxury phone, exercise your control and introspect on whether or not you need an upgrade. We often have our hands full but spend just out of enticement. Avoid that and you will save a lot of money.
Cut those Expenditures
List down all your monthly expenditures and ponder where is that wasteful portion that you can actually cut down upon. There is a simple test; when you feel confident pouring over an item, it is necessary, the one where you feel the slightest amount of guilt and moves on to convince oneself, that is the one that needs to be curbed. Cab or train, cappuccino or green tea, it’s all in your hands, as to where can you cut down and where you cannot. Choose wisely.
Organise, Organise, and Organise Some More
A clutter-free life is a productive life. Our finances are no different. The moment you declutter your money and have it all sorted clearly in front of you, that is the instant when you actually can balance your budget accurately and in a stress-free manner.
Bank on your Bank
Opening a bank account is a fairly easy process. If you have one account for all your transactions and auto-debits, make sure you open another one to put in some savings. No matter how big or small the amount, transfer it to your safe account and exercise enough restraint to not spend it.
Monitor your Progress
Last but not the least, after following all the aforementioned steps diligently, monitor your progress on fixed intervals. This will ensure that you are on the right track and that you don’t waver from your resolve of saving and not spending over a certain threshold.
Detox is always difficult. However, it always ends in pleasant results. Let 2020 be the year when you bring on a financial detox in your life. It’s worth it.