There are definitely some personal finance tips I wish I would have followed earlier in life. But life is full of regrets. That’s how we learn. However, today you have a choice to up-level your personal finances. Are you up for it?
1. Save 10% of everything you earn
This is the first personal finance tip I got that I took seriously. It’s a very rare situation to come across a big lump some of money that you get to stuff into your savings account. Instead of keeping your eyes peeled for something that might only happen every time you get a tax return, stash away 10% of every dollar you ever earn, and do it consistently. This simple act can fluff your savings accounts or if you choose, fund your retirement accounts! I implemented this simple hack and within 6 years saved well over 100K. It’s the little, consistent things that matter most.
2. Have multiple bank accounts
Think filing cabinet for your cash. Instead of holding everything in one or two main accounts, break it down into multiple, smaller accounts. Think about the areas of your life that always seem to trip you up. Maybe it’s car repairs, home repairs, wanting cash for a vacation, having money to groom the dog… whatever! Make a savings account for these problems and start funding them. When your money is organized, you can achieve your financial goals like you were born to… because you were.
3. up-level your personal finances by Investing early and often
When it comes to investing, your biggest asset isn’t how much cash you have to invest, it’s actually time. The earlier you start investing, the easier it is to have enough for retirement. Here’s an example for you visual learners out there: In order to have 1 Million dollars for retirement, you would only need to invest 100 bucks a month (assuming a 10% return) in order to retire at 65 with 1 Million dollars. If you waited until you were 35 to start investing, you would need to invest 450 bucks a month (assuming a 10% return) in order to retire at 65 with 1 Million dollars. Time is your true asset, my friend.
4. Set specific, intentional goals
Your money simply cannot serve you if it has no purpose. This is where goal setting comes in (and that scene from The Notebook that we all love) and I get to ask you, “What do you want??” Seriously, what do you want? What do you need? Sort out your priorities, and get to work. You’ll be astonished at how quickly you accomplish things when you actually set clear, financial goals instead of just spending your money haphazardly with no clear direction.
5. Pay cash for used cars
Here’s the truth about money, wealth, and all things smart financially: We want to actually BE wealthy, not merely look rich. Buying fancy brand new cars makes you look rich while making you poor. Don’t put your cash into something that loses 11% of its value the second it’s driven off the lot and possibly 30% within the first year. Save up, buy used, pay in cash.
6. FUlly fund your emergency fund
Of all the personal finance things you wished you knew sooner, I hope you take this one very seriously. Emergency funds aren’t sexy, I know that. But they are your ticket to financial stability and success. They have this magical power to distance you from trouble that’s just waiting for the right second to bite. Imagine all the things you could do if you weren’t constantly paying for repairs or all the little things that come up in life! You could actually focus on your goals and reach them! Unexpected events happen in life. Instead of telling yourself they won’t happen to you, plan on them and prepare. This way, you aren’t derailed and you actually have a plan AND funds to cover the problem.
7. Stay out of consumer debt. period.
When you are in debt, you can’t build on your future because you are still paying off your past! Consumer debt is the enemy to true wealth. It doesn’t do anything to actually improve your financial outcome, but instead keeps you tethered to supporting someone else’s lifestyle.
8. quit yoloing
Your attitude is everything. If you go through life believing that you deserve fancy things and that “you only live once” so might as well splurge, get that fancy car, buy that big house, or constantly pay to avoid aging, you’ll go nowhere. Stop spending money to impress other people and attempting to boost your social status. It doesn’t work. The truth is, happiness, along with financial success is not coupled with how much money you spend, but how you use it strategically.
9. Dine at home
This is definitely something you’ve heard before. A budgeting basic that saves families hundreds of dollars a month because home cooked meals cost up to 60% less! Dining at home works really well at keeping you within budget and helping you meet your financial goals. Make a meal plan, grocery shop and then stick to your guns.
10. Learn investing basics early
Like we mentioned in tip #3, time is on your side when it comes to investing so don’t let the fear of the unknown keep you from investing. There is so much free content out there to keep you from dipping your toes. Commit to learning the basics right now. You don’t need to know everything, you just need to know a little bit about getting started, then go from there.
11. Spend money on memories, not stuff
It’s easy to follow society and just spend our life and money up-leveling our stuff. New truck, new house, new clothes, new tech. But if you dedicate your time and money to memories instead of stuff, you’ll have a better relationship with your loved ones and ultimately be happier. You know what the number one regret from people on their death be is? Not spending more time with those they love. Time, people… not stuff.