If you search on the Internet, you’ll find numerous personal finance tips available.
So why is this post any different?
Well, for one this is a collection of the very best ones that beginners really need to know. I’ve seen posts with like 75+ tips and I’ve seen articles with just a handful of very general tips.
Certainly not a knock on those articles, but I wanted to write one more focused on the must-haves.
And secondly, all of these tips are things I started doing in late 2014 and really were key into how my financial life has changed.
How have these tips helped me? I self-manage my investments, have a 60%+ savings rate, improved my career worth and salary, and much more. If you are interested, you can dive into MY ABOUT PAGE HERE.
Ready to get started? These 29 personal finance tips below blend various categories of finances like budgeting, saving, investing, and more.
1-You May Not Want to Do It, But Create a Simple Budget
If you have not created a budget, even in a spreadsheet, DO IT. By no means am I a fan of obsessing over my budget, but when you are first starting out you need to do this. It gives you the big picture of how you are spending, what income you are bringing in, etc.
Visualizing and seeing these numbers can help you catch issues or make your eyes pop from some rough looking numbers. But like I said, DON’T OBSESS OVER THIS. To Understand Your Finances, You Have to Track Your Net Worth
Similar to a budget, it’s important you calculate your net worth, no matter how ugly it might be. The difference with this and budgeting? I actually look at my net worth monthly. It also can keep you on track and help you visualize where you are financially.
There are some cool apps and online tools to simplify this process like Mint and my favorite stock edge,. ALSO, DON’T OBSESS OVER THIS.
2-Write Down All Your Debt — Even If It’s REALLY Bad
Now, your budget and net worth might give you some insight, but I like all my current debt down separately. Not only the total amounts, but interest rates, amount of the minimum payments, loan length, etc.
It helped me organize what should be paid first, if I should make extra payments, and beyond.
Nothing like seeing close to $50,000 in debt when you have $1,000 only in the bank, but that opened my eyes a bit more.
3-Cut Back Your Lifestyle If Inflated — LBYM
LBYM, or live below your means. Such a simple concept, yet most of us do not practice it well. If you have a limited salary and high debt, by no means should you be upgrading to a brand new car, getting an expensive apartment, going out to eat every day, etc.
With social media, trying to keep up with friends and our consumer mentality, we fall into a trap of overspending on things we don’t really need to keep up appearances. It’s okay to live comfortably, but don't live beyond your means
4-Get The Low Down On Your Credit Score and Credit Report
Understanding your credit scores and credit report is another important personal finance tip for beginners. Credit sesame is free and doesn’t hurt your score to look at your reports.
But, this can help you catch mistakes, overdue bills, info about your loans, and just overall how your score is doing.
If your score is really low, start work on improving this number. It can affect you getting future car loans, mortgages, apartments, and affects what kind of interest rate you might get. I’m not necessarily a fan of how credit report companies operate, but it’s still good to have a score above 700
5-Create A Savings Plan (And Stick to It)
How original! I know, I know! But it needs to be said. When just getting started with your personal finances, you need to create a savings plan and actually stick to it. Many times you get a rhythm going, then you slowly get a little lazy. Don’t! This is how you fall back into old non-savings habits.
I used a spreadsheet that laid it all out with how much cash should be going towards savings and investments.
6-Start Paying Yourself First
This philosophy has been around for some time now, but I didn’t really come across it until reading the book “RICH DAD POOR DAD” as already started posting content weekly. Sounds somewhat controversial, but having this mindset will keep you on your savings targets.
Too many times you pay everything else first, then by end of the month, there is hardly anything for you to save. If you reverse the roles, you are more money conscious to pay your bills on time and reduce frivolous spending.
7-Separate Your Savings From Checking Account
You’d be surprised how many people do not do this. But a simple personal finance tip, move what you want to save to a separate account.
Whether that is a savings account at the same bank or a different bank where you don’t touch the money unless for emergencies. I like the online savings builder account from CITY BANK, which can help you build an emergency fund.
I WISH IT WILL HELP YOU .
THANK YOU
PRASHANT GUPTA
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