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Forming healthy financial habits takes time and effort.
It can take weeks, if not months, for a new habit to form and for a behaviour to become automatic.
Here's a reminder of the main points:
Live within your means
Keep track of your monthly income and expenses and find ways to free up funds to cover your outgoings if you need to. Set a budget for how you will spend the money you earn.
Spend wisely
Get into the habit of dividing up your expenses into needs, wants and savings or debts. If it's appropriate, aim to spend 50% of your income after tax on needs, 30% on wants and 20% on savings and debts each month.
Free up funds
If you're not saving as much as you'd like, or find it hard to cover your costs each month, look for ways to reduce your outgoings. Also, think about how you might increase your household income.
Build emergency savings
Aim to build up enough savings to cover at least 3 months of essential outgoings, in case of emergency.
Avoid excessive borrowing and manage your existing debt
Aim to borrow only what you can reasonably afford to pay back. Take steps to manage debt that you have already, for example, cut back to free up capital, approaching your lender for support, or consolidating debts.
Save for the future
Start saving for your retirement as early as you can. The younger you start, the bigger your retirement fund. Remember that compound interest quickly multiplies, earning you additional interest on what you've previously earned.
Protect what matters
If you can, take an insurance to protect you from risk that you would not be able to cover yourself, like losing your household's main income through illness or injury.
Beware of scams and fraud
Online financial fraud is on the rise, so take steps to avoid becoming a victim of cybercrime. Remember the saying if something sounds too good to be true then it probably is.
Excessive borrowing is any amount of debt that you can't comfortably manage. There are several signs to look out for.
Disclaimer
This publication has been issued by The Hongkong and Shanghai Banking Corporation Limited (HSBC), India, Incorporated in Hong Kong SAR with limited liability, for the information of its customers only. This publication does not constitute investment advice or an offer to sell, or a solicitation of an offer to purchase or subscribe to any investment. The information herein is derived from sources believed to be reliable and the concerned Information Provider(s) have duly authorised HSBC to use such information provided by them. Whilst every care has been taken in compiling the information, HSBC and the concerned Information Provider(s) do not guarantee, or make any representation or warranty and accept no responsibility or liability as to its accuracy or completeness and shall not be liable for damages arising out of any person's reliance upon this information or any action taken or not taken as a result of any material contained in the publication. Expressions of opinion are those of HSBC and the Information Provider(s) only and are subject to change without notice. HSBC has not independently verified any information provided by the Information Provider (s) or that has been derived from the sources believed to be reliable by HSBC. Opinions expressed herein do not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this publication. This document is for circulation in India only. No part of this publication may be reproduced or stored in a retrieval system without the prior written permission of HSBC. Any liability is accordingly expressly disclaimed by HSBC, its officers, directors and employees.
