Best Personal Finance Tips by Financial Experts
When it comes to getting ahead and building good money habits, learning proper financial management is the key to success. The secret to unlocking a life of abundance is not waiting on hands and knees for finance tips from billionaires, but building good habits centered around frugal living, tracking your net worth, and always seeking to expand your financial education no matter how successful you become. If you are looking to set aside wealth that will last you and your family a lifetime, then the best place to start is listening to the advice of the men and women who have been there themselves.
List of the 44 Best Personal Finance Tips
Abacus Wealth Partners
Utilize automatic contributions, whether it be to establish and grow an emergency fund or an investment account. When money’s just sitting in a checking account, it is much more likely that the money will be spent rather than saved. However, automatic contributions take the hassle and thought process out of the equation entirely. Even if the amount starts out small, setting up automatic contributions establishes good habits and takes the pressure out of making the decision to save money. Seeing the account balances growing month after month, without really feeling the pain, will help reaffirm the decision to save.
Cash flow and reserves are vital. As we budget and look to improve our financial health it is important that we are in tune with our cash flow and savings. Both are compensating factors when applying for a mortgage. When it comes to cash flow, the goal should always be to limit expenses and increase income. You also need to monitor when money is coming in and out and which accounts are being utilized. When saving always have a goal. Commit to what you can afford and don’t kill yourself trying to save like others, save what feels comfortable for you. That may be $50 a paycheck or $1,000 monthly, you decide.
The LC Group
My number one tip is to create a financial plan and set financial goals – know how much you will save and spend and for what purpose. It turns out that financially successful people spend twice as many hours planning their financial strategy as do the non-wealthy. So, it’s really is a fallacy that people with money don’t watch their dollars.
You’ll need to find a way to keep track of what your income and expense are. There are any number of ways to do this. Certainly there are several computerized personal accounting software programs. A few come to – Mint, Quicken, and Moneydance. (I use Quicken Home and Business for myself and my clients.) You could also use a computerized spreadsheet program such as Excel. Ruler columns on a piece of paperwork fine as well. Figure out what funds are coming in and which funds are going out, so you can set a budget and “pay yourself first”….and to spend less than what is coming in.
FSC Wealth Advisors, LLC
You need to understand the difference between money & income. Money is not for spending, it is for investing. You spend the income from those investments. If you spend your money it is gone, while the income from an investment can be replenished. An investment can be anything that allows your money to make money.
Budgeting is the single most important aspect of a person’s financial life. Tracking assets vs liabilities is the key to success – no matter the amount of money. Assets are things that bring money into your life while liabilities are things that take money out of it. Once a person understands where their money is going they can then begin to make it work for them.
Smart Life Tips
The first thing someone should do to get on solid financial ground, is to know exactly what’s has come in and going out. Transfer and examine your financial actions, at least once and month, in to one chart. I like using Google Docs, Excel also works, and even old school paper is better than nothing. So long as it’s all in one place and you can get a good overview. For money coming in, only rely on what you already have received, not what you’re expecting to get. For spending, many people recommend using only cash, but cash is hard to track. A credit or debit card records and gives you access to your purchase history. Enter that numbers in your chart and include every little thing. Group your expenses into categories such as groceries, entertainment, tech, and fees to reveal how small purchases can quickly add up. Once you know what is actually happening with your money, you can then make better decisions, and spend more consciously.
Perhaps you are one of those people to whom the sound of the phone ringing will cause your stomach to flip-flop, or an envelope with an IRS return address fills you with such dread and anxiety that you think you might become physically ill. You need to practice these two tips to start putting your financial house in order:
Key Concept No 1: Spend less than you earn over a long period of time and you will become wealthy. You absolutely must live within your means; more specifically, you must spend less than you earn over a long period of time to become wealthy or financially independent.
Key Concept No 2: Consumer Debt is the Kiss of Death. You must eliminate all debt as soon as possible. Consumer debt, read as ‘credit cards’ are the “Kiss of Death” to your financial well-being.
Let me be clear: Your ability to Find Joy, Peace and Contentment With Your Personal Finances is dependent on being able to save money. You must spend less than you earn and be debt-free OR accept the fact that you will live paycheck-to-paycheck for the rest of your life.
Peak Personal Finance
For professionals contributing to their 401k plans in preparation for retirement, be sure to consider a Roth IRA account as well. This account can be opened with a brokerage firm and is only available to individuals who have a modified adjusted gross income below $135,000 as a single filer or$199,000 for married individuals filing jointly.
A Roth IRA is a retirement account that differs from a 401k for the fact that at any time you can withdraw from what you have contributed, tax-free.The only thing to know Fabout that is that if you touch the principal before the age of 59 ½ then you will incur a penalty.
This kind of account limits individuals to a $5,500 contribution/year(roughly $458 contribution/month). The exception to that rule is those over 50can contribute $6,500/year. Only money made during the year of contribution(Earned income) can be contributed and you cannot deduct contributions from your income taxes. Coupling a Roth IRA with a 401k plan will set you up quite well for your golden years.
The best personal finance tip pertains to someone who is looking to build credit from scratch (or resurrect it) with a secured credit card. This is meant to maximize your ability to build credit with a secured credit card, and it assumes that you don’t have much else by the way of credit.
Each month, you should record your average expenditures including groceries, gas, public transport, and anything else that is a standard daily expense in your average month. After a couple months of data collection, you should have a typical monthly spending number.
Then, in order to build credit (for someone without a solid credit history), you should open up a secured credit card and put down a security deposit that is a little more than double your average monthly expenses.
Moving forward, put these daily expenses on the credit card. After a month, it should roughly add up to about 40% of your credit limit, the ideal credit utilization ratio on a credit card. Then you should be able to pay this balance off with ease since it’s what you’d spend anyway. This should help you build credit by way of ideal credit utilization as well as successful payment history.
In business, we spend a lot of time looking at cash flow. In other words, the money flowing into a business and the money flowing out of it. A business can be profitable and healthy but if its debts fall at the wrong time, it can get into serious trouble. The same is true with individuals like you and me. But we almost never speak about our own personal cashflow, which I think is a huge mistake.
For a lot of people, running out of money mid-month means turning to short-term lenders like payday loan companies. These companies charge exorbitant interest rates of between 400% and 1,000% APR. Resorting to this form of borrowing is obviously not sustainable in the long-term and can result in young people accruing huge debts which take years or decades to pay off.
I think we should all be recording our own personal cashflow, looking at when our debts come out and when our salaries and other incomes come in. If you understand your own personal cashflow, you can make much smarter buying decisions and avoid short-term cash issues like I mention above.
Elevated Web Marketing
My name is Andrew Schutt, I’m the founder of Elevated Web Marketing, an agency that helps turn local businesses into local brands.
My biggest financial tip is to not spend money you don’t have. It sounds obvious, but I have plenty of friends who get into credit card debt because they spend more on their credit card than they can actually pay off.
By staying on top of your finances and making sure you can pay on your credit card, you’ll avoid falling into credit card debt and wasting extra cash, plus energy and stress, to pay it off. Bottom line: Don’t spend money that you don’t have. If you can’t use a debit card to buy it, don’t use a credit card to buy it either.
Syed Irfan Ajmal
Don’t compare yourself to others as that often leads to resentment and unhappiness. If you do compare yourself with others, compare how good their behavior, work ethics etc are, as compared to yours, rather than what new gadgets or cars they have.
Work on deriving satisfaction from your work, how you treat your family/friends/colleagues rather than through some shiny object which will lose 20-50% value the second you pay for it.
When you feel like buying some new thing, ask yourself if you really need it? And, in most cases, “Yes, it will make me happy” isn’t a good answer. Most people think whatever they don’t spend after getting their salary is their saving. That’s the wrong approach. The second you get a salary, put a certain amount of it into a separate bank account. Use the rest to pay expenses. This is the right way to save.
Record every incoming and outgoing cash on your phone’s Evernote or Google Keep app. Then after every week/month move those items to a google spreadsheet. This way you can analyze where you are spending your money. I rarely put my credit card to use and instead, I rely on my debit cards only so as to keep shiny stuff at bay. Perhaps you
Ray Hidgon Group
One major Personal Finance Tip that has helped us andmay help others is to take a percentage of every dollar, somewhere between2-10%, and dedicate it to your investment account. The percentage allows you tostart this at any salary or income level and will help ensure you put awaymoney systematically toward your retirement.
We also do this same practice witha giving account that goes to charity or people we deem worthy of a blessing. Committing to a percentage of every dollar that comes intoyour household into one or both of these is a simple way for you to put moneyaside for a rainy day or your retirement and has helped us amass a decent sizedportfolio over the years.
The best personal finance advice I can give anyone is to find a way to “house hack” and have someone else pay your housing costs.
It’s easier than it sounds. The classic house hacking tactic is to buy a small multifamily property, move into one of the units, and rent out the other(s). (Here’s a detailed case study on how one man house hacked a duplex with no real estate experience.)
But buying a multifamily isn’t the only way to house hack. In a single-family home, you can rent out rooms, whether to long-term renters or to travelers on Airbnb. You can also create an income suite, which is effectively an in-law suite but used for rental income! My partner Deni house hacked by bringing in a foreign exchange student! The company pays her a generous monthly stipend. Another tactic she’s used before is renting out storage space in her garage. Housing is the largest expense most of us have. That makes it the best expense to eliminate!
I always recommend that people create a budget that incorporates financial goals then set up their own spreadsheet that tracks the amount of cash, investments, and debt they have. In addition, it is helpful to track the previous week’s spending to make sure that they are on track to hit any goals they set for themselves or are saving what they expect. I find it helpful to use a spreadsheet like this in conjunction with an app like Mint that can show all of your financial accounts in one place as well as your spending.
Another tip, specifically for people in debt, is to check around and see if it is possible to save on that debt – particularly by refinancing it. I often see people receive loans or credit cards with higher interest rates and they just assume they are stuck with that rate until they pay off the balance. If these people received their loan/credit card awhile ago, they may now have a much better credit score and may qualify for a lower interest rate through refinancing with another bank or lender.
The majority of people shop for best prices prior to making a hotel or car reservation. However, they do not take into consideration that prices can drop 40% of the time up to 67% off your hotel costs (with car rental it is usually drop up to 30%)
Services like Pruvo for hotels and Autoslash for car rentals will track price drops that occur after the reservation is made, and will try to get you a better deal for the exact same hotel/car so. Best part – both services are free, and the customer keeps all the savings.
From every single paycheck you receive (even if from babysitting or paper deliveries as a kid), save at least 10% of the after tax amount. View that money as an “employee” that
you put to work earning income for you. For each dollar spent, make sure that it provides value to your life. I find many people who have no savings can’t really remember what they spent much of their income on. It left no real impression. It was just “gone”.
Co-founder of GreenPal
The discipline of controlling my spending living within my means and ultimately saving money each month is one of the hardest I know of.
Whether it’s keeping my rent under one fourth of my take-home pay and all of my other expenses and check it is been one of the hardest challenges in self-mastery that I know of.
When I was in high school I was very fortunate that my father gave me a classic book from the 1930s called “the richest man in Babylon”. The book talks about the concept of paying yourself first 10% to 20% each month’s earning before you pay any of your bills.
When you are forced to pay yourself first each month is acts as a forcing function to live within your means.. This discipline combats the phenomenon of no matter how large our personal income gross our expenses and lifestyle always grow along with it. The author talks about if desire to purchase something i.e. a car Etc you must first acquire the asset that will deliver the rate of return to purchase whatever it is.
I’m so glad that I absorbed this book at a young age because I practiced its teachings over the course of 15 years and have now over time acquired 12 paid for rental homes. Now I’m in my mid-30s and that is allowed me to pursue my dreams of building a successful tech company.
FourStar Wealth Advisors
If available, always invest in your company’s 401k, even if as little as 1%. In the beginning, start with a number you feel comfortable with, which can be as little as 1%. Moving forward, have the account automatically increase 1% each year on your anniversary. This will allow you to increase contributions without creating too much havoc on your budget. Most importantly, if the company matches any amount, make sure to contribute equal that amount from day one. Thus, if company matches 3%, then start at 3% and add 1% each year moving forward.
More than 80% of Americans receive a tax refund every year. While they’re happy to get extra money from the IRS, many fail to realize that a tax refund means they’ve been overpaying their taxes.
If you get a hefty refund, take a look at your W4 withholding and see if you need to change it. Use an IRS withholding calculator to determine what your withholding should be and ask the payroll department to change it. You’ll have more money in your paycheck; use that to pay down debt, save for a house, or invest in your retirement.
I believe that the best personal finance tip is to keep track of your spending. It is rather simple, and often heard, but not many people do it. By tracking your spending, you allow yourself to better understand your habits and pinpoint the things you are spending an unnecessary amount of money on.
This should be a wakeup call for most people and can allow you to set a monthly budget moving forward. The only person that truly knows what you can afford is yourself and setting a budget that you feel comfortable with is the best way to ensure you stick to that limit.
Your budget should take into account your monthly income, expenses, and the amount you would like to save. By removing your expenses and savings, you can find out the amount of money you have left to spend in a given month.
My best personal finance tip is, plan for financial success by tricking yourself. When we plan for success we should bucket money for different purposes, such as daily living, retirement, home purchase, etc. However, we frequently come up short of these well intentioned goals. The solution is to trick ourselves.
We can trick ourselves by opening dedicated bank accounts to start automatically putting money aside that you will not see. I, and my clients, have found it successful to use automatic transfers and/or direct deposits to send our budgeted amounts to our bank account buckets. This allows us to begin to reach out financial goals automatically without expending extra willpower. If we don’t see the money in our spending account then we mentally don’t have the money available.
You can be leaving “free” money on the table by not contributing to your employer sponsored 401(k) plan. One of the best things you can do is contribute to your 401(k) plan up to the maximum employer match if your employer offers a matching contribution. Many employers match your contributions, and those matching contributions can be as high as dollar-for-dollar matches. That’s the best risk-free rate of return you’ll ever earn on your money.
CO-founder of Millennial Wealth
Opening high yield savings account for your emergency fund. An emergency fund should consist of between 3-6 months worth of living expenses in cash. Earning the highest interest rate while still being FDIC insured is important, otherwise, inflation will erode the purchasing power of that cash much faster. High yield accounts can pay around 1.5% interest annually where a savings account can be as low as .01%.
Turn off the financial news! Paying too much attention to the stock market only exposes individual investors to noise, not to knowledge.
Create an emergency fund: Although it is recommended to put enough money in your emergency fund to cover anywhere between three to six months’ worth of living expenses, putting anything towards an emergency fund is a good start (then you can work your way up to three to six months’ amount if you want to). An emergency fund is important because it can cover you and your family if you happen to lose your job, your home is struck by a natural disaster, your family has unexpected medical emergencies (that insurance won’t cover all the way), you unexpectedly get pregnant with another child, etc. Putting money aside for a rainy day may feel pointless, but it will definitely prove worthwhile in case of an emergency.
Regularly check your credit score and report: Checking your credit score and report on a regular basis is one of the best financial habits you can form. By checking your score and report, you can keep track of your credit usage and how well you are doing in regards to building good credit. Another benefit of checking your credit score and report is that you will be able to catch any signs of fraudulent activity that may be connected to a form of identity theft. Catching this type of crime early on can lessen the financial clean up you’ll have to do.
The Complete Retirement Planner
The best personal finance tip, especially for younger people, is to create a written, comprehensive, retirement/financial plan. This is a critical step in achieving financial security, and allows you to see your financial future in black and white. Establishing clear goals, being able to model “what-if” scenarios, and instantly seeing the impact of your decisions, is simply eye opening. This is more important than ever, with 74% of households having no plan, and not knowing how to create one. You wouldn’t take a cross country trip without knowing how you will reach your destination, and you shouldn’t just guess and hope that your financial journey will turn out well either.
Changes in expenses over time, retirement savings, college savings, the cost of health care in retirement (with its expected 6% inflation rate), taxes on retirement savings withdrawals and Social Security income (that income will not all be spendable!), and much more, all needs to be accounted for. It’s a complicated task, but with a comprehensive planning tool it will be easy to establish a solid plan, monitor your progress, adjust as needed, and achieve your goals.
Don’t be part of the 74%!
CEO of Community Tax
Many people wait to start managing or investing their money. Typically, this is due to fear fear of making the wrong decision, fear that they don’t know what they’re doing, fear that they will lose their money. This fear shouldn’t stop you, though. The best advice I can give is don’t wait to start focusing on your personal finances. Start now. This means different things for different people, but if you put off creating a monthly budget or wait to invest some of your savings, then you are really just doing a disservice to yourself. Make personal finance a priority, and start taking the steps you need to set yourself up for a better future.—— Distinguish Between Needs and Wants —— As you begin to acquire more wealth, it can be easy to make impulse buys (or even well-researched purchases) that you don’t need.
It’s fine to buy things that aren’t necessary but are simply just things that you want – there’s nothing wrong with that. However, it is important to limit these “want” purchases. For example, a fancy car may have extra bells and whistles, but essentially it accomplishes the same thing as a more reasonably priced car. You get from point A to point B. Take some time to consider if the extra money you will spend (both on purchasing the car and the repairs) is worth it to you. Are you a car aficionado? Then, it might be worth it. Or, is the car much safer? This could be another reason to spend a little bit more. Ensure that you are limiting the number of purchases you make on “wants”, though. It’s easy to get caught up in buying extravagant things – make sure that you’re thinking things through before making these purchases.
Financial Planner with United Capital Financial Advisors
I have always been interested in money. Not in a selfish way…more in a desire to learn as much as I can about it so I can make the best decisions for myself and family over my lifetime. I read Money Magazine as a kid and now advise clients on how they can make the best decisions for themselves. My knowledge has served me well, placing me in the top 1% of the world in earnings and wealth. What have I learned along the way?1. Boring isn’t a bad thing. As people accumulate wealth, they start to look at investing in things like oil wells, real estate, and close friend’s businesses. While I have done this and will continue, when I compare this side of my portfolio to the boring stocks and bonds, the stock and bond side is a lot easier to manage. Consider creating a portfolio of liquid securities that is diversified and well managed that may enable you to spend your life doing what you want instead of fretting over your investments. Stay away from the get-rich-quick schemes or too-good-to-be-true investments.
Market timing is almost always impossible. The day you think you have figured out the science of timing the market is the day you become a dumb investor. Sure, an informed investor can guess right some or maybe even the majority of the time, but that one time you are wrong can kill your returns. The next time your “gut” or your new strategy tells you to move all to cash, think twice about it.
The first step in improving your financial situation is having a clear picture of where your money is going. With so many subscription services and recurring payments, it’s easy to forget – or at least not think about – some of the money that you’re spending every month.
I suggest you take an hour or two at the beginning of every month and sit down (with your spouse if you’re married) and go through all of the previous month’s expenses. That way you’ll know exactly where your money went and be better equipped to tell it where to go next month.
As part of this monthly meeting, I would also recommend setting a budget specifically for that month. There will be different expenses (birthdays, vacations, etc.) each month and it’s important to plan for those differences each month to help minimize surprises in your spending.
Taking the time to review where your money went makes it easier to stick to the budget you’ve set because you see at the end of each month how the little daily expenses add up over time.
“Budget for fun: according to a study conducted by finder..com, blowing too much money on eating out, vacations and shopping is America’s number one money regret. When going into savings mode, many people budget as if they will entirely restrict non-necessities. It’s the spending version of a diet; doomed to fail if too prohibitive. Work a little fun money into your budget to prevent big blow outs you’ll regret.
“Revert to cash only: while research shows digital wallet usage is on the rise, there is something about making payments with cash over card that makes it even harder to part with. The tangibility of money in your wallet and being able to see at a glance exactly how much you have to spend will make you think a little harder about spending as opposed to the tap and go. Make a weekly budget and only pay for things in cash to see how much you can save.
“Switch providers frequently: inertia, rather than brand loyalty, is why so few of us take the time to compare our financial providers to make sure we’re still get the best deal. Make a habit of doing this every quarter and if you see a better deal, ask your provider to match it or switch if they don’t. This hack can save people hundreds every year and takes only minutes.
“Sobriety savings: if you won’t cut back on the booze for your health, consider it for your wallet. Over half of Americans (55.89%) drink at least one alcoholic beverage a week. However, more than 4.5 million of us admit to spending in excess of $200 per week on imbibing. That’s $10,400! Clearly cutting down on your booze habit will not only be great for your health but your wallet too. Work out how much you could save by cutting or reducing the amount your drink, whether you indulge at home or out, via finder’s sobriety savings calculator.”
Brown Marketing Strategies
RULE #1: INVEST EVERY WINDFALL: Not everyone has a chunk of money with which to start investing. One way to create seed money to start investing is by selling unwanted jewelry such as an engagement ring from a former marriage. We’ll show you how.
RULE #2: LIVE BELOW YOUR MEANS: The most important rule of all!
RULE #3: CONTRIBUTE TO RETIREMENT ACCOUNTS: The fastest way to grow money is to put as much money away as possible into retirement accounts. Depending on the type of account, money can either grow tax-deferred or tax-free. The less money you pay in federal and state taxes, the more money you keep for yourself and your family.
RULE #4: CONTINUALLY INVEST SMALL AMOUNTS OF MONEY: Most people are surprised to learn how quickly money can grow if just small amounts of money are invested on a regular basis. Before my presentation begins at 6:00 pm, attendees will have the opportunity to mingle with representatives of three companies that empower women to generate side-income each month: More Than A Bottle via OneHope, The Legacy Group(marketing representatives of Melaleuca), and Rodan & Fields. Although I believe that only a small percentage of women can successfully generate full-time income through direct marketing opportunities, I firmly believe that most hard-working women can generate at least a few hundred dollars a month which can be automatically deposited into an individual retirement account (IRA).
RULE #5: PAY ATTENTION TO YOUR INVESTMENTS: I have had my share of divorced and widowed women cry in my office about how little money they have left – a train-wreck that could have been stopped if they had been fully engaged in the financial and tax decisions their husbands had made alone. Let’s not let this happen to you.
Phoenix NAP Global IT Services
Live Within Your Means, Or Below Them
Living within your means is a lesson I was taught very early on by my Father. In fact, his motto was to live below your means, just in case. That advice has always stuck with me. Whatever your income level is, your job is not to spend it all. In fact, that is how people even making sig figures end up living paycheck to paycheck. One of my most successful money-saving tactics I call my 48-hour rule.
In tracking all my expenses, I found that spur of the moment luxury item purchases made a significant dent into my potential monthly savings. I now make myself wait 48 hours before making such a purchase. It turns out, more than 50% of the time I end up passing on the item and not looking back. I do not miss the item, which means I probably never needed it in the first place.
Your home is your largest financial asset and biggest expense, yet for most people, their home quickly becomes a money pit. Things break before they should causing you unexpected repair costs. Your remodel projects are overbudget. Utilities bills are higher than they need to be. You are probably under-insured and you have lost track over how much your home is worth, your mortgage balance, and your home equity. You are completely unorganized when it comes to managing this asset.
It is time to start managing your home like a financial asset. Track the changing value of your home and most importantly, your mortgage balance and your home equity portion. Set budgets and track costs of your remodel projects. Create a home maintenance schedule to keep your home running efficiently and avoid fix-it costs. Have a home inventory to make sure you are properly insured. Be prepared with good records for tax time and in the future if you decide to sell your house.
Born To Sell
Sell call options against stocks and ETFs you *already* own in order to generate recurring weekly or monthly income. All you need is 100 shares of a stock or ETF and you can generate 5%-15% per year by selling call options against those stock positions. It’s called “covered calls” and is the most common options trading strategy used. It’s like getting 52 dividends per year (if you sell weekly call options), or 12 dividends per year (if you sell monthly call options). Anyone who owns 100 shares can do it.
Source Capital Funding, Inc.
With the average credit card interest rate being about 15.59% in 2017, paying the monthly minimum can quickly put you into a hole. According to NerdWallet.com, the average household with debt owes just over $15,500 on credit cards. That being said, if you were to pay a minimum 3% of the balance each month at an interest rate of 16%, it would take you nearly 21 years to eliminate the debt. In that time you would have paid almost $12,000 in interest. However, if you were to pay even just 2% more (5%) of the balance each month, you would pay just over $5,000 in interest and eliminate the debt in 19 years. Although this is still a significant amount of time spent paying off the debt, it can help cut the amount of interest paid over that time in half.
To help avoid digging yourself into a hole, it is good to get in the habit of paying off as much as you can in a given month. Sometimes this may be the minimum amount, but every time you are able to pay more than the minimum, it will help you chip away the debt in a smaller amount of time
Dont Pay Full
Do not spend on whatyou can easily avoid. Thereare several occasions of expenses you make each day that you could easily avoidif you think a bit just before spending. Instead of driving own vehicleeveryday, try using public transports like buses or trains in alternative days.If your time permits, try some biking or walking for nearer destinations. Yourhealth and your wallet both will remain happy. Carry home cooked foods when yougo for work and save the money for buying lunch and snacks. Try to visit thestores at the times when the best deals are offered and use any discount couponsor shopping points for the maximum savings. Avoid impulse buying because youwill find most of these things unnecessary if you logically think. Stoppurchasing high-value internet packs and visit your local community centre orlibrary at your leisure time where you can use free wifi and use the connectionof your office during day time. Decide to sit at restaurants only on others’ invitations.By stopping avoidable expenses you can easily find some extra dollars even atthe end of the month.
William Paterson University
Paying attention to fees is something all investors should be doing. Transaction costs like commissions and spreads as well as ongoing fees like the management fees of a mutual fund all create a drag on your return. To reduce these fees make trades as infrequently as possible and buy investments that are cheap to own.
In terms of trading as infrequently as possible set up rules for your portfolio that dictate when you will make trades. This encroaches on another topic which will make someone a better investor and that is proper portfolio rebalancing. Rebalancing correctly will mean cutting down or eliminating unnecessary trading and thus reduce transaction costs.
Finally, shop around if you are looking at funds and consider going with index or an exchange traded funds. You could save yourself over a hundred basis points and unlike your return those savings are guaranteed.
Budgeting is more than just allocating money towards bills- it also determines how much you should be spending and on what. Spend, save and splurge within your means by adopting the ‘50/20/30’ rule. This simple budgeting guideline is effective for those who are new to budgeting. Spend only up to 50 percent of your after-tax income on essentials, such as housing; 20 percent on financial priorities, such as debt repayments and savings; and 30 percent on lifestyle choices, such as vacations. Prioritizing expenses such as utilities, cable, furniture, and food costs over date night will ensure you can cover the basic necessities without coming up short. By following this rule, you will be able to better manage your finances.
Timothy G. Wiedman
Based on my experience as a college professor, I can attest that many Millennials don’t comprehend “how” compound interest works. So they put off starting to save for retirement by telling themselves that they can “catch up” later after establishing solid careers. But the “magic” of compound interest is based on time, so delays have consequences. Thus, opening a Roth IRA (Individual Retirement Account) ASAP is vital, and it needn’t be complicated.
Relatively safe, low-cost stock index mutual funds (available through many firms) can mirror the returns of the overall market and are an easy way to start. For example, if a23-year-old puts $3,000 annually into a Roth IRA that earns a 7.8% average annual return, 44 years later at retirement,that $132,000 of invested funds (i.e., $3,000 per year times 44) will grow to$1,009,275. But starting the same Roth IRA twenty years later (invested in the same funds) will yield very different results. Putting$5,500 annually (the maximum for folks under age 50) into that Roth IRA for 24years still totals $132,000 (i.e., $5,500 per year times 24). But at retirement,still earning 7.8% per year, those funds will only grow to$357,167. The delayed start will cost that investor more than$652,000!
My recommendation is, make a habit out of giving to charity. It forces you to spend less than you earn. More importantly, you have a positive impact on the world, and it can provide motivation and inspiration for you to earn more and spend less on yourself overall. The net result is a higher savings rate for yourself, and a greater appreciation of what you have!
American Consumer Credit Counseling
1. Build an emergency fund: Millennials should make sure they have an emergency fund that can cover at least three to six months’ worth of income should an emergency occur. It’s recommended that young people save at least 15 to 20 percent of their gross income so that they can live comfortably during retirement.
2. Pay down debt: Come up with a plan of attack to eliminate debt. You can either pay your debt off by smallest balance to largest balance or by largest interest rate to smallest interest rate. You need to start saving now, even if that means putting only $5 per month into a savings account. Every penny counts, and this holds true for spending, too.
3. 401(k): Take advantage of 401(k) plans. It’s important that Millennials contribute at least six percent of their salary to a 401(k) plan. Many employers will match up to 50 percent of the annual contribution. This option is tax-deferred.
4. Invest: Consider a balanced approach with high and low risk investments. High risk investments can generate high returns, whereas low risk investments have a smaller chance of losing money. Use technology, such as investing apps, to help you.
John H. Savin
Savin Wealth Management
My personal finance tip is to make sure that you use a zero-based budget. What that means is that each month before you get paid, that you set aside all of the money that you’re going to spend before you even get it, that way you know exactly where your money is going and there will be no surprises. This also causes you to prepare in advance for any expenses that may come. It forces you to have discipline and pre-plan your budget. You have to prepare for things such as emergencies, the car breaking down, or car maintenance. It makes you think about the fuel prices and the fuel expenses in your car. This makes you think of things like medical emergencies and kids getting sick and trips to the doctor when you pre-plan your budget. It makes you think about the complete picture of your budget, and helps you to prepare for the future. When you have this discipline it can also help you put aside some money to plan for retirement or for investments or for launching businesses or other things that way you’re able to make your money work for you.