You’ll find many personal finance tips on the Internet. Why is this article any different?
This is a compilation of the best tips that all beginners should know. I’ve read articles that had a few tips, but I’ve also seen posts that have 75+ tips.
Not to knock those articles but I would like to focus on what is essential.
Second, I began implementing all these financial tips in late 2014. They were really key to the way my financial life changed.
How have these financial tips helped me personally? I have improved my career value and salary and am able to self-manage investments. You can read more about me here if you’re interested.
Are you ready to start? The 29 tips on personal finance below combine various financial categories like budgeting and saving, as well as investing.
- Budgeting made Simple
Do it if you haven’t created a budget yet, even if it is in a spreadsheet. Although I am not a big fan of obsessing about my budget calendar when you first start out, you should do it.
Budgets give you a big picture view of your spending and income.
You can use these numbers to help you see problems or even make your eyes pop when they look rough. As I’ve said before, DO NOT OBSESS OVER THESE NUMBERS.
In order to understand your finances, you must track your net worth
It’s just as important to calculate your networth, regardless of how ugly it may be. What’s the difference between budgeting and this? I look at my networth monthly. You can also use it to keep track of your finances and visualize your current situation.
Mint, my favorite app and tool to simplify the process is Personal Capital.
- Write down all your debt
You may find that your net worth and budget can give you some insights, but I prefer to list all of my debts separately. You should also include the interest rates, the amount of the minimum payment, the loan term, etc.
It helped me to organize what I needed to pay first, whether or not I should make additional payments, and more.
It was a little shocking to see that I had almost $50,000 in debt and only $1,000 in my bank account. But it opened my eyes.
- Slow Down Your Lifestyle (LBYM)
LBYM is “Live Below Your Means”
It’s a very simple concept that most of us don’t practice well. You should not upgrade to a new car or apartment if you are in debt and have a low income.
Social media, the desire to keep up with our friends and our consumer mindset can lead us to overspend on things that we do not need just to maintain an appearance. You can live comfortably but not beyond your means.
- Maximize your credit score
Another important tip for newbies in personal finance is to understand your credit score and credit report. It’s free to use Credit Karma and it doesn’t affect your score.
Monitoring your credit score can help you identify mistakes, late payments, information about your loans and how your overall score is performing. It can also help prevent identity theft.
Start working to improve your score if it is low. This can impact your ability to get future loans for cars, houses, apartments and even affect the interest rate that you receive.
It’s good to have a score over 700, even though I don’t like the way credit reporting companies work.
Want to improve your credit rating? My ultimate guide on how to get a high credit score and maintain it.
- Make a Savings Plan and Stick to it
How original! You know I know! It’s important to say it.
You should create and stick to a personal savings plan when you are just starting out with your finances.
You get into a groove, but then become lazy. Don’t! You can easily fall into old habits of not saving money by doing this.
I created a spreadsheet to show me how much money should go towards saving and investing.
- Start paying yourself first
Rich Dad, poor dad is a philosophy that has been around since the 1970s. I was only introduced to it after reading this book.
This may sound a little controversial, but this mentality will help you reach your savings goals.
You pay all your bills first, and by the end of the month you have very little left to save.
You will be more likely to reduce your frivolous expenditure and pay bills on time if you reverse roles.
- Separate your savings account from your checking account
You would be surprised at how few people actually do this. Move your savings to a different account.
It doesn’t matter if it is at the same or another bank, as long as you only use the money for emergencies.
CIT Bank’s online savings account can be used to build up an emergency fund.
- Read about Finance for 1-3 Hours per Week
You need to read this article if you want to know how to control your finances.
You can read financial magazines, blogs or books. Even a few hours per week can make a big difference in your financial life.
This is a habit I developed in 2014. It’s something I continue to do today. You’ll be amazed at how much information you can learn in such a short time.
Are you looking for money, budgeting and investing tools or apps? Here are some of the best apps and tools to help you with your personal finance. Here’s my list of recommended books.
- You are responsible for your own financial education
It’s possible that this is the most brutal personal finance tip of all. It is also the truth.
You will not be guided by anyone to make your finances successful.
It is up to you to change your financial situation. You will have to learn about finances and invest time in learning. You can do it!
Related: Want to be more financially literate? Here are 8 simple ways to do it.
- You need to make more money
Budgeting, saving money, and being mindful of what you spend are all things we hear. You will hit a brick wall at some point. You must increase your salary to make more money.
Find ways to improve your skills at work, do more, and learn during your free time. Ask for a salary increase, be aware of your worth as a professional, and work hard to achieve it. It will not be easy but it is necessary.
- Organize your finances with apps that help you budget and manage your money
You should consider using a budgeting or money management app if you are a beginner in finance. These apps can help you organize your finances into a single, comprehensive picture.
Apps like Personal Capital, Mint, You Need A Budget, etc. You can monitor your spending and stay focused on your financial goals with apps like Personal Capital, Mint, etc.
It is important to do this if you want more accountability but don’t believe you will stick with a spreadsheet.
- Invest in Yourself First
Invest in yourself before you invest any money.
You can invest in your own financial education by taking classes, purchasing courses, books or other materials, creating a side business to earn extra money, etc.
You are your best asset.
- Understanding Key Investing Terms
Compound interest and dollar cost averaging are two important investment keywords that you should know and understand.
Understanding how to invest for retirement and how to get your money working is important.
You can learn more about these terms by diving into the investing terminology.
- Start A Side Hustle To Elevate Your Finances
It can be difficult or time-consuming to increase your salary at work. You can always start a side business.
There are many side hustles that you can start quickly.
Think about selling items on eBay, cutting the grass, delivering groceries etc. This extra money can help you pay off debt faster and save more.
- Invest in Assets and Not Liabilities
Most people are confused by the differences between assets and liabilities.
In general, assets that we have been taught to consider as assets can actually be liabilities in certain cases. When it comes to investment, you need to know these things. Robert Kiyosaki’s short video explains the concept:
- Do not compare yourself to others financially
We compare our financial situation with those around us. We compare ourselves to others, whether it’s family members, friends or people in our own age group.
Not everything that you see on the surface is glamorous. Do not compare yourself with others. Don’t compare yourself to others. Focus on your own progress.
- Understanding Credit Cards
Credit cards are important for building good credit. It’s important to know how credit cards work and avoid getting into debt.
You can quickly find yourself with credit card debt at rates of interest that are unsustainable. You may be surprised at how easily it can happen. Find out more about credit cards and debit card usage.
- Don’t be complacent in your career, know Your worth
Take action if you feel stuck in your career or if it seems to be going nowhere. It is easy to complain about mediocrity and become complacent.
This was a problem I had for three years, and I felt this way. You are sacrificing money, happiness and career growth. Do not wait to make changes.
- Get rid of the “worry about it later” mentality
You can lose thousands of dollars in compound interest and years from your retirement if you don’t invest and save for retirement.
You will need to save more and more as you delay your start. It applies to all money matters. Start as soon as possible.
This post is for you and your family members or friends who are making excuses about money or not taking their finances seriously.
- Re-evaluate your personal financial goals
One of the most important personal finance tips you should remember is to reevaluate your goals.
You might not be doing the same thing you did a year ago. You might still be doing the same thing.
It’s important that you look at what you have accomplished or where you are going in life. Do not become complacent, or allow your financial motivation to slip through the cracks.
- Discover Your Investment Options Outside the Stock Market
Most people invest in the stock market to plan for retirement. You have many options for diversifying and building wealth. A 401k or an IRA are great places to invest your retirement.
After you’ve built a solid foundation, look for other ways to diversify your portfolio, such as real estate, art and businesses.
Always do research before investing your money. You might consider some of these alternative investments.
- Do Not Buy Something Immediately, Wait a While before you buy it
Saving money by cutting back on your expenses is a good way to do so. The challenge, I believe, is that we tend to buy things we like when we see them.
We want it even if we do not need it.
You can solve this problem by waiting a few more days or sleeping on the purchase. You’ll most likely realize that you don’t really need it the next day, or even after a few days, and your wallet will be happy.
For larger purchases you can try the 30-Day rule, which requires that you wait for a full month before evaluating your decision.
- Spend your money wisely and choose experiences over materials
It’s totally okay to spend some money on yourself. I don’t believe in extreme frugal living. Treating yourself is a great feeling.
Spend your money on experiences, not material goods that will only bring you temporary pleasure. Traveling and other adventures will help you create lasting memories.
- Do not increase your lifestyle too much
The average person gets a small raise every year, but it is unlikely to have a significant impact on your lifestyle.
Let’s say that you received a nice pay raise or got a new position with a substantial increase in salary. Many people upgrade their houses, cars or other expensive items.
Resist!
Upgrades are fine, but you should use this time to reduce your debt, invest for retirement, or increase your savings. Avoid lifestyle inflation.
- Do not be afraid to discuss finances with your partner or children
Discussing money and finances with your partner or children can be difficult.
The more honest and open you are, the better you will learn to be confident about your finances. This is a wonderful way to work together and learn.
- Investing: Pay Attention to Fees
Rollover fees and other fees such as account maintenance fees or management fees for index funds, mutual funds, etc.
You must eliminate the financial institutions with the highest charges. Over time, they will kill your investment and returns.
If you have a retirement account, I suggest checking out Blooom. You can receive a free 401k/IRA portfolio analysis and recommendations. It will also reveal any hidden fees that you may be paying. Start here for free.
- You Can Be Cheap, But Not Frugal!
It’s important to know what it means that I am not a very frugal person. This is also very different from being cheap.
A cheap person will always spend less and focus on saving pennies. Being frugal means prioritizing spending so that you can have more of what matters or is important.
- Understanding Life Insurance is Important
Ah yes, life insurance. Do you think it is a waste? It can be, if you do not research. But it is essential to protect your family in the event of an unexpected accident.
Life insurance is a topic that you should be familiar with and educate yourself about as early as possible.
In the digital age we live in, there are new providers of life insurance who remove the stigma associated with insurance and continue to offer financial value. Bestow is one I would recommend.
They provide a number of resources to help you understand your benefits and find a plan that is affordable. The company offers a 100% online process and can provide a policy immediately if approved. Get a free quote by clicking here.
- Take a deep breath and go at your own pace
This list contains a number of great financial tips. Take a deep breathe and go at your own pace.
The material may appear confusing at first, but it is easier to understand if you keep a steady pace. Your finances will thank your for not rushing the process.
These 29 tips on personal finance will hopefully help you along your journey. If you’re interested in learning more about personal finance, I suggest reading these books.
