A group I'm a part of recently put together a list of financial tips you need to know and I thought it was too good to not pass along.
1. Get Educated
Learn entry-level stuff. There are plenty of books (The Millionaire Next Door) and resources (this blog) to educate yourself.
Always know what's going on with your finances, even if you're not the breadwinner. There are a ton of free tools out there to track your spending and view all of your accounts in one place. Lastly, know your credit score. Credit Karma is my favorite tool for tracking and monitoring my credit score. It's simple to use, free, and you can learn all the different ways your credit score can be impacted.
2. Start! Just get started. Open an investment account. Pay more than the minimum on your credit card. Save an extra $50 a month. Sometimes the hardest part is getting started and you'd be surprised at how addicting tackling your finances can be.
3. Use Technology
Most financial stuff doesn't need to be complicated. There are a ton of cool tech tools out there to help you along the way and make it easy for you. Our budgeting and financial aggregation app is a great place to start. We listed Credit Karma as a way to track your credit score. Bumped is a new personal favorite of mine. It gives you actual stock of publicly traded companies when you make a purchase at your favorite store.
4. Address your budget It sounds stupid but make sure that you are bringing in more money than you are spending. Sounds simple but we have stats like:
- 34% of Americans have no savings
- half of all Americans have nothing put away for retirement
Track your finances and leave some room for fun money. You worked hard for it and should enjoy life; and setting a budget makes that easier to do.
Also, don't live by someone else's budget. There isn't a one size fits all for spending and budgeting. Don't get sucked into keeping up with your neighbor or friends. Live your own life and do what works for you!
5. Make more money This one is easier said than done in many cases, but it is possible to make money while not working. Passive income examples include writing a book, creating a blog or online course, and investing in real estate. Active income examples include side gigs that may relate to your normal job or driving for Lyft/Uber. Even obtaining more designations or specializing in your normal occupation may lead to pay increases.
6. Save Save whatever you can and then build upon it. If you can only start with $50 a month that's fine. Never drop those savings (unless it's an emergency) and try and increase it whenever you can. It's addicting and you'll love seeing the wealth you accumulate. My best tip I can give you is to automate this process as much as possible so you don't have to think about it. Also, if your employer matches your 401(k) contributions you should always save as much as your employer will contribute. For example, if your employer matches up to 3% of your paycheck you should contribute 3% of your paycheck. It's free money, why wouldn't you take it?!
7. Invest You may not think you’re able to invest, that it’s only for the rich but that's not true. Invest as early as you can. You can really take advantage of compounding when you invest early in your life. Even if you're older you should invest. Every little bit counts and makes a difference. You should automate this process as much as possible too.
8. Get out of debt
Attack debt aggressively. Debt is one of the biggest killers of budgets and retirement savings. You should get rid of debt as soon as possible (other than your house) and refrain from adding new debt if you can. Student loans, cars, credit cards - all of it. Wipe it out.
9. Set goals
All of the budgeting, saving, and investing is worthless if you don't have goals you're working toward. Goals also keep you accountable. You can set goals in our free financial tool and view how likely you are to reach them.
10. Surround yourself with the right people
This makes a big difference. Eliminate the negativity in your life and surround yourself with those who you enjoy being around or who you aspire to be. You will learn from these people and it will drive you to become better.