You may be sticking to your new year’s resolutions to improve your fitness and diet, but are you paying attention to your financial habits? If you are wondering how to pay off debt and/or want to improve your expenditures and put yourself on the path to financial success, financial fasting can be a good idea for you.
What is financial fasting?
Financial fasting is a temporary ‘financial cleansing’ that helps you get your money back on track. The idea comes from the book, The 21-Day Financial Fast: Your Path to Financial Peace and Freedom. Fast time is more than 3 weeks and,
some key points are that you should :
- Firstly pay only for cash items
- Secondly buy only what you really need
- Thirdly, keep a record of spending money to track your purchases
- Choose a debt-free option
- Learn how to avoid excessive use of college
- Create an emergency bag
Advantages and disadvantages of financial fasting
Here are some of the pros and cons of financial fasting:
Benefits of commercial fasting
- Handling your finances and saving cash
- Reduce your credit card costs and as a result, interest on debt
- Consciousness of your current expenditure habits
- A buyer of financial fasting
The disadvantages of financial fasting include:
- Major debt problems cannot be resolved within 21 days – if you go back to your old ways soon, you will be back in the first place
- It requires a lot of change in the short term, which can set others aside
- It does not focus on good credit card practices, which have the potential to increase your credit score
4 Tips for Fruitful Financial Fasting
Here are a few tips to make your financial success a success:
1. Have a support team
Firstly, it’s important to be around people who support you in your financial goals. So, you might require to generate limitations with that friend who is all the time trying to make sure you skip the gym and instead come up with “pizza and beer”. Tell your friends and family about your financial situation quickly and tell them how they can support you (that is, not invite you to purchase).
2. Dodge the triggers
Secondly, be careful to avoid any triggers that could cause you to spend money pointlessly. For example, if seeing promoters and ads on Instagram makes you want to spend careless disposal, consider deleting the app for a few weeks or setting a time limit to reduce your risk of destruction.
3. Generate a financial plan
Thirdly, compare your take-home income with your fixed and variable monthly expenses. Do you do more than spend money? If not, you may want to adjust your spending habits and focus on your priorities (see below). Creating a budget is not the way to go. There are various budget options, including the 50/30/20 rule, which proposes to put 50% on what you need, 30% on what you want, and 20% to save and repay the loan, as well as the envelope system, which you have to set aside money in various envelopes. By category and also allows you to use only the contents of the entire envelope.
4. Focus on the essentials
Fourthly, no matter what budget you use, you will want to reduce spending on demand over demand. There is a big difference between what is important and what is perceived. Take time to focus on things that you need to spend on, such as food and rent, and things that you can do for a while, such as outdoor food and extra latte foam. Transfer that replica of “The Joy of Cooking An Old colleague” for you to vacation and work on your French publishing skills instead.
“Do you think this is helpful? If so, please share this article on Facebook, LinkedIn, etc. And we warmly welcome your queries, comments, and suggestions. Feel free to contact us. You can join our community and open a help Topic under FINANCIAL PLANNING. It’s totally free! And, please don’t forget to like our Facebook page. Thank you very much! Have a nice day!”