Top 10 Personalfinance tips

Start Investing

Investing is one of the best ways to increase your net worth, but a lot of people stay away from it because they're scared of losing money. So instead of investing, they keep their money in a savings account. That's great, and you should have some money in a savings account for emergencies, but the truth is: Money in a savings account loses value over time. See, the average savings account has a very tiny 0.06% APY (annual percentage yield), while inflation is around 1.7%. That means that each year, the money you have in a savings account is going to have less and less buying power. So, what can you invest in to stay ahead of inflation? Here are some options:

  • Real estate
  • Peer-to-peer lending
  • Exchange traded funds (ETFs)
  • Stocks
  • Cryptocurrency (crypto can be volatile, so invest at your own risk)

Communicate With Your Significant Other

Notice how I wrote significant other; this financial tip doesn't just apply to married couples. Money fights can affect any relationship. The best way to avoid fighting about money with your S/O is to talk to them about it. Remember that you're a team! You should be talking to each other about your financial goals, and you should set a date once a month to go over your finances together. I recently started doing a monthly money meeting with my girlfriend and it's actually been pretty fun. We get to see where each other are at with our financial goals and we keep ourselves motivated to accomplish those goals. The bottom line? Don't let money ruin a great relationship.

Download a Personal Finance App

There are a ton of different personal finance apps available that make budgeting, tracking spending, and saving, so much less painful. Since there are so many though, it can be hard to decide on which one to use. Here are my top suggestions:

  • You Need a Budget – This one isn't free, but it's the most helpful and feature-filled budgeting app on the market.
  • Mint – This one IS free, and it's excellent for tracking spending and setting up simple budgets.
  • Personal Capital – Another free one that's great for tracking net worth.
  • Trim – This one is also free, and it's the best for tracking subscriptions, spending, and more.

Focus on Building Your Credit

We recommend that you start building your credit early. Start out with a credit card with a low limit, such as $500 to $1,000, and be diligent about using it wisely. Use it for small, regular purchases, and always pay off the balance at the end of the month. Good to Know: By building your credit now, you can improve your credit score and save significantly on interest in the future by securing low interest rates on future loans.

Evaluate Purchases by Cost Per Use

It may seem more financially responsible to buy a trendy $5 shirt than a basic $30 shirt—but only if you ignore the quality factor! When deciding if the latest tech toy, kitchen gadget, or apparel item is worth it, factor in how many times you’ll use it or wear it. For that matter, you can even consider cost per hour for experiences!

Have financial planning meetings to review your money

Have a set time to review your finances yourself and with your spouse. You need to review and reevaluate whether what you’re doing is working. You need to make changes as your life changes. I like to review my money weekly so there’s less to go over at each meeting, but you can decide what works for you – monthly or quarterly may fit with your life better depending on where you are financially. The point is to not set it and forget it. Your finances need to be reviewed periodically.

Take Public Transit

If you live in an area with a good public transit system then you're better off taking the bus instead of paying for a car, gas, insurance, and maintenance. Sure, public transit can be noisy, annoying, and sometimes nasty, but it's also a great way to save money, and it's better for the environment. Also, think about all the fun stuff you can do on your way to work since you're not driving: you could read a Blinkist book, play a game, listen to music, work on your blog, or you could even take a nap!

Buy your own cable modem. They usually pay for themselves in 9 months and save you money after that.

Frustrated with my rising cable internet bill I called my ISP today (Time Warner Cable) to see why my rates had risen so much. They said my previous rate was a special and had expired, but suggested I buy my own cable modem as a way to cut down my bill. Looking into it a compatible (and fairly highly rated) cable modem was $70. Since I pay $8 a month in modem rental fees (which vary from ISP to ISP in the usual range of $6 to $10) this modem will pay for itself in 9 months and will save me $8 a month after that. It comes with a two year warranty, so even if it craps out at 2 years and a day I'm still guaranteed to save at least $120.

Banish Toxic Money Thoughts

Hello, self-fulfilling prophecy! If you psych yourself out before you even get started (“I’ll never pay off debt!”), then you’re setting yourself up to fail. So don’t be a fatalist, and switch to more positive mantras.

Keep Track Of Your Spending

If you don’t know why your account balance is so low every month, you’ll definitely need to track what you’re spending it on. Once you identify where your money is going, then and only then can you start managing it.  Save all of your receipts and keep a log of what you’re spending. Combine this data with a printout of your credit and debit card transactions. Spreadsheets can come in handy for keeping track of your spending. Use a notepad or a piece of paper to write everything down if you have to. Related content: Get paid to listen to music