5 Best Financial Habits to Have

Raj Shamani
3 min readSep 7, 2023
Image by Freepik

Financial literacy is something we are not taught in schools. We develop these habits over time, maybe by learning from parents or friends. If you want to build wealth and increase the revenue of income, you need to have a few financial habits. On my podcast, time and again, people who had started with nothing but just through explicit planning have had a substantial net worth. Real estate tycoon, Dr. Niranjan Hiranandani suggests these five financial habits everyone must have.

1. Draw a budget

At the beginning of every month or before any festival, it is essential to have a budget handy. So that you can have a basic idea of how much you want to spend where, and when you want to splurge on something, your budget will remind you to control. Or sometimes just the opposite. Your budget will provide you with room for a few last-minute spending. You must plan your expenditure and savings on a monthly or, if possible, weekly basis so that you can save and know where to draw the line.

2. Make a realistic budget

Making a budget is fine, but making a realistic budget has more extensive effects. When you know you need to spend, say, about INR 10–12 thousand for your groceries and other stuff, you cannot drastically cut it down to INR 3 thousand just for saving. Likewise, making a few tweaks to your budget and assuming it will cover an expensive overseas trip might not be wise planning. You can’t be too frugal or too liberal with your money. You have to know your means, and you have to cut your cloth accordingly.

3. Investment

I have already said this many times before and will say it again. Investing is the best way to grow your wealth. You can invest in mutual funds, share markets, or rent your property. You can also invest in buying items like gold or other valuable items whose prices will only increase. You have to be patient no matter which mode you choose. You have to trust your gut and not listen to your friends or someone else unless they are a professional in the field. And you will see your wealth growing considerably after some time.

4. Track your expenditure

We often have a habit of spending unnecessarily or too much on something, and at the end of the month, we regret how we couldn’t save much. To not have that kind of regret, it is better to write down your expenditure at the end of the month and check it with your budget. Find out areas where you have spent more to control the same from the following month.

5. Debt management

While debt isn’t inherently bad, it requires careful management to prevent it from becoming a financial burden. Prioritize paying off high-interest debts, such as credit card balances, as quickly as possible. Adopt responsible credit card usage by paying off the entire monthly balance to avoid accruing interest. When taking on new debt, like student loans or mortgages, research terms and interest rates thoroughly and ensure they fit within your budget.

It may sound like a lot. But it is not. If you are careful and disciplined with your expenditure and know what you do with your money, you are good to go. Remember, small, consistent steps today can lead to significant financial achievements tomorrow.

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Raj Shamani

200+Speeches in 26+Countries on Financial Freedom Investor: Startups, Stocks & Crypto