Prepare for Financial Emergencies
Tip #1: Include Savings as Part of Your Monthly Budget
It’s important to keep savings as part of your budget. Saving money will help you have better finances in the long run because it leads to more wealth accumulation.
Tip #2: Keep Your Savings in a Separate Account
It’s important to keep your savings in a separate account so that you will be less tempted to spend the money. If it’s not easy for you, set up an automatic transfer of your paycheck into this type of account and then make transfers as needed.
Tip #3: Open a Savings Account at a Different Bank
Consider opening a savings account at a different bank. This makes it easier for you to keep track of your finances and there’s less clutter in the same account. It also saves on fees and discourages impulse buying.
Tip #4: Set Up a Direct Deposit Plan
Set up a direct deposit plan where you can automatically transfer money into your savings account. Some people like to have one set aside for emergencies, and another for more long-term goals like retirement or buying a house.
Tip #5: Consider Switching to a Credit Union
Credit unions tend to offer better rates and lower fees than banks. They’re also more invested in preserving your relationship with them because they have less competition.
Tip #6: Create an Emergency Savings Account
This way, when you have to pay for something unexpected without cash on hand – like replacing your car after being hit by another driver or coming down with pneumonia and having to take time off work – you don’t have to worry about paying the bill.
Tip #7: Your Savings Shouldn’t Be Growing Faster Than Your Income
It’s important to make sure you’re putting enough money away for emergencies, but if your savings account is growing faster than your income or inflation rate, it may be time to start taking some of that cash-out and using it.
Managing Your Investments
Tip #8: Rebalance Your Portfolio
The goal of rebalancing your investments is to prune back on the less successful investments. This is so that they don’t overwhelm your overall portfolio.
Tip #9: Stick With Low-Cost Index Funds
If you’re investing in individual stocks, choose broad-based index funds over actively managed ones.
Build & Track Your Credit Card
Tip #10: Review Your Credit Report Regularly
You never know when mistakes will happen. It’s best to check for errors and get them rectified as soon as possible.
Tip #11: Keep Your Credit Use Below 30%
Charging a credit card beyond 30% of the limit will make it harder to pay off and can trigger an interest rate increase.
Tip #12: Get a Secured Credit Card
If you’ve been turned down for credit cards because of poor or limited credit, get a secured card that requires collateral.
Get Properly Insured
Tip #13: Get Life Insurance
Most people don’t realize that life insurance is a form of asset protection, so if you have dependents, get some coverage.
Tip #14: Get Renters Insurance
Protect your personal belongings and the property you live in with renters insurance.
Save for Retirement
Tip #15: Start Saving for Retirement ASAP
This one should be a no-brainer, but many people wait until it’s too late to start saving for retirement.
Tip #16: Don’t Cash Out Your Retirement Account Early
If you have a 401k, IRA or another type of retirement account that lets you withdraw money before it’s fully vested, don’t think about taking the early withdrawal.
Tip #17: Reduce Expenses Rather Than Increase Income
The best way to improve your finances is not always by increasing your income. Rather, look at reducing expenses from unnecessary purchases like cable TV that’s overpriced.
Tip #18: Salary Increase = Savings Increase
If you get a raise, don’t think about spending it on new clothes or going out to eat. Instead, take that extra money and put it in your retirement account!
Tip #19: Make a Financial Calendar
If you’re looking to improve your finances, start by creating a financial calendar.
Tip #20: Always Check Your Interest Rate
A smart financial move is to always check your interest rate. If you’re a credit card holder, find out the annual percentage and make sure that’s lower than what it was before.
Tip #21: Always Track Your Net Worth
Always track your net worth. It will allow you to see how much money you have coming in and going out.
Managing Your Budget
Tip #22: Always Set a Budget
Setting a budget for yourself will ensure that you’re not spending more money than what’s in your account.
Tip #23: Consider Using an All-Cash Diet
If you’re looking to get your finances sorted, stop using credit cards and instead use an all-cash diet.
Tip #24: Make Checking Your Finances Part of Your Daily Routine
If you want to improve your finances, take a moment each day for your finances. This will allow you to see what’s happening in your bank account and how much money is coming in and going out.
Tip #25: Allocate at Least 20% Of Your Income Toward Financial Priorities
When you allocate at least 20% of your income towards financial priorities, it will ensure that you’re not overspending and living from paycheck to paycheck.
Tip #26: Budget About 30% Of Your Income for Lifestyle Spending
This means that you’ll be able to afford the things you need while also saving money and not overspending!
Stay Money Motivated
Tip #27: Find a Financial Coach
A financial coach can give you the motivation, accountability, and expertise that’s needed to have better finances. And if they don’t know enough about something – like taxes or investing, for example – they’ll make sure their clients are working with someone who does.
Tip #28: Set a Specific Financial Goal
Even if you don’t know how to make a budget, set some financial goals. For example, I want to have $X in savings by 2020 or I want to buy my first home this year.
Tip #29: Get Rid of Your Junk
It’s tempting to keep things because they might come in handy down the line or because they were expensive – but if an item is taking up space in your home and not being used, get rid of it and make some extra money!
Tip #30: Think Positively
Don’t worry too much about money and finances because if you think positively more good than bad is going to happen. Reduce your headaches by preventing stress.
Tip #31: Make Short-Term Money Goals
You might be looking to save for retirement or buy a house in the future, but before you can think about saving up enough money for these long-term goals, make short-term financial goals.
Tip #32: Be Financially Educated
There are so many ways that we use our finances every day, but often people don’t know how they should be used correctly. Make sure to educate yourself about personal finance before making big decisions that could affect your life forever.
Tip #33: Try Using a Spending Mantra
Adopting a mantra is like adopting an entirely new lifestyle. It allows you to break old habits and start fresh with small, manageable changes that reap great rewards in the end.
Tip #34: Be Grateful for What You Have Now
It’s so easy to get caught up in what we don’t have and forget about the things that are right before our eyes. Take a moment each day to think about all of the good you’ve already accomplished and be grateful for it—even if there’s still more work to do.
Tip #35: Find A Money Buddy
It’s easier to stick to a budget when you have someone else supporting and encouraging you. Find someone who can be your money buddy, so that both of you can stay on the right track!
Raising Your Earning Potential
Tip #36: Automate Your Finances
Set aside small amounts of cash each day or week through direct deposit or transfers—before even thinking about spending any of it. You won’t have to think twice when bills are due since everything is paid automatically just as planned.
This doesn’t take much effort but saves loads of time in the long run.
Tip #37: Negotiate More Than Just Your Salary
If you’re negotiating a raise, new job or even just an item in a store, don’t forget to negotiate. You may be able to get better terms on your credit card offers and interest rates if you ask for them.
Tip #38: Reflect on Your Financial Decisions
It’s often hard to look back at past decisions and see how they’ve impacted our finances in the present day but, taking time to reflect on major financial decisions can help us make better choices going forward.
Tip #39: Know Your Worth – Ask for a Raise if You Deserve One
If you’re not happy with your current salary, it may be time to ask for a raise. You never know what might happen until you try.
Keep Debt at Bay
Tip #40: Start paying off Debt
It’s easy to get overwhelmed when you owe a lot of debt. If you start with paying off the small amounts first, it’ll make paying off the bigger debt seem more doable.
Tip #41: Never Cosign a Loan
A cosigner will be equally responsible for the debt if you can’t pay it off. Never let someone else foot your bills just because they’re trying to help you out.
Tip #42: Negotiate a Lower Interest Rate
A good way to do this is by using your credit score as leverage. Show that you are willing to get an alternative loan if they don’t agree to your offer.
Tip #43: Ignore All Credit Card Cash Advance Checks
Credit cards offer an easy and convenient method of borrowing money for emergencies, but they come with high-interest rates on the funds borrowed. It could cost you in the long run if not paid off quickly.
Tip #44: Don’t Fall for the “Buy Now, Pay Later” Trap
Whether it’s the latest must-have gadget or a flashy new car, we’ve all been tempted to buy what we want now and worry about how to pay later. But are you really prepared for that financial commitment? Rather object to those types of purchases.
Tip #45: Set Mortgage Payments Below 28% of Your Monthly Income
If you’re looking to purchase a home, it’s possible that your monthly payments will be too high. In this case, try lowering the mortgage payment so that you can also afford other necessities in life.
Tip #46: Calculate Purchases by Cost Per Use
Before you buy any product, think about whether or not it’s worth the money. Think of how often you will use this item and what its cost per use is to see if it’s really worth purchasing.
Tip #47: Spend on Experiences, Not Things
It’s better to spend your money to experience something new, rather than buying more things. This will allow you to live life from a different perspective and learn about yourself in the process.
Tip #48: Shop Alone
Shopping with people can often be distracting whilst shopping alone will force you to focus on what it is that you want and need from the store.
Tip #49: Stick to Your Budget
It’s the best way to avoid overspending – and it makes for less regret later. Plus, you’ll have more money leftover in your account when payday comes around.
Tip #50: Avoid Overdraft Protection
Overdraft protection can be tempting because it looks like you’re getting a free loan, but that’s not the case. You’re borrowing from yourself and if you don’t have enough money in your account to cover what’s being charged then overdraft fees will kick in.
How Do I Start With My Personal Finances?
A great place to start is by creating a budget, and sticking to it. This will force you to focus on what it is that you want and need from the store.
Where Should I Invest My Money?
Investing in yourself is a great investment! You never know when life will throw something at you, so it’s best to plan ahead by learning how to invest into things like property or stocks while they’re still affordable.
What Are Overdraft Fees?
Overdraft protection can be tempting because it looks like you’re getting a free loan, but that’s not the case. You are borrowing from yourself and if you don’t have enough money in your account to cover what is being charged then overdraft fees will be added.
What Are the Benefits of Using a Savings Account?
A lot of people don’t use a savings account because they think it’s boring, but that couldn’t be farther from the truth. A savings account is your best friend when something happens and you’re not sure what to do about an emergency.
We all have different goals and dreams, but most of us share the desire to live a comfortable life. Learning how to manage your personal finances is critical for achieving this goal and it doesn’t need to be complicated or overwhelming. Simply follow our steps to manage your finances sustainably.