Recently updated on October 25th, 2022 at 11:33 am
Are you interested in learning more about financial planning tips? Do you need financial help?
Whether you’re experiencing financial independence for the first time or you’re looking for a way to touch up your money managing skills, we’ve got the crash course for you. Keep reading to learn the top 11 financial tips to get you on your way to success.
1. Pay Yourself First!
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An often overlooked step towards financial freedom, you need to start paying yourself before anything else. This doesn’t mean you can splurge on high ticket items or take yourself out to eat once a week. Instead, you should take ten cents of every dollar you earn and put it somewhere safe.
You need to think about your financial future. Saving money is the best way to pay yourself down the line.
2. Don’t Keep Up With the Joneses
It’s normal and natural to want to keep up with your friends in terms of spending and hitting major life goals. But just because your friends are buying a house and taking a vacation doesn’t mean you should too.
Also, as we make more money, we tend to also accumulate more expensive things to spend that money on. So it feels like we can’t get ahead.
Avoid this. Buy only what you can afford after being responsible with your money in other ways.
3. Go for the 401(k)
If you have the option to invest in a 401(k) that your employer sponsors, take it. A lot of times, your employer will even match your contribution up to a certain point. That’s free money!
You won’t have to pay taxes on this money upfront, but you will be taxed when you withdraw it.
4. Build That Emergency Fund
Did you know that most Americans don’t have enough money to cover a $400 emergency? This is alarming and disheartening. You can take yourself out of this statistic by saving up enough money to survive for three months.
Start small. Instead of an expensive coffee or a candy at the checkout line, put that money into savings. Over time, that’ll add up and you’ll be able to cover an emergency when it arises.
While the stock market might seem like a game for people who love taking risks, it’s actually much more dependable than you think. As long as you can find someone with knowledge of how to work the stock market in your favor, you’ll be able to rake in money with little to no effort on your part.
6. Pay Your Credit Card Off Each Month
It may be tempting to max out your credit cards and then only pay the minimum balance each month, but doing that can hurt your credit and put you even further into debt.
Your credit cards should be used for only what you already have money for or a dire emergency. Each month, pay off the entire balance after you receive your bill.
Follow these basics of credit to improve your credit score, a number that has a huge impact on the rest of your life.
7. Two is Better Than One
It may seem like a bad idea to have more than one credit card at a time, but it actually helps improve your credit utilization rating. Credit bureaus look at the amount of credit you currently have and the amount you’re utilizing. If you’re overusing your credit, it could mean a dip in your credit score.
Try to get two or three cards and keep their balances low to improve your credit score.
8. Pay Off High-Interest First
If you have more than one credit card you’re paying off, make the card with the higher interest rate your first priority. Over time, the card with the higher interest rate will start to accumulate more interest and cost you more money.
It may seem tempting to use large infusions of cash to invest or set aside for a savings fund. But instead, you should pay off your high-interest debt. Over time, you’ll save more by not having to pay excessive fees or interest rates than you would have saved putting it aside for a rainy day.
9. Don’t Skimp On Insurance
Not having insurance is expensive in more than one way. The federal government will find you hundreds of dollars come tax season if you don’t have insurance. But it’s also expensive in other ways.
Medical care in America is expensive. You may be young and healthy now, but you won’t be young forever. As you age, you’re going to need routine medical care to keep yourself going. You don’t want to be caught without insurance when you need it the most.
You’re risking putting yourself tens of thousands of dollars in debt by not having medical insurance.
10. Keep a Budget and Spending Tracker
The best way to know how much money you have and how much money you can use is to use a tracker. Every time you swipe your card or get paid, track that information. There are loads of apps you can use for this, or you could go old-school and write it all down by hand.
It goes beyond keeping your checking account balanced. Keep track of everything you purchase, how much you spent, and soon you’ll notice patterns that you can use to save even more money.
11. Practice Patience
At the end of the day, the thing you need to remember when it comes to getting on track financially is that patience pays off. It’s normal to want to see changes to your checking account as soon as you start implementing smart spending, saving, and investing techniques. But the reality is that it takes time to see your wealth start to accumulate.
Follow These Financial Tips for Success!
These financial tips are just a few of the things you can start doing today to achieve success financially. There is no end to the creative ways you can save, invest, and spend your money in a way that will help you grow your wealth and your net worth.
For more financial tips and tricks, keep reading!