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When it comes to money, being savvy pays in more than one way.
There are countless things in life that can easily drain your cash flow if you allow it to, and sometimes you might not even be aware of it happening. Whilst money isn’t everything (that’s for sure), it does help when it comes to living a comfortable life, and of course, in keeping a roof over your head!
Personal finance is a subject that is quite far-reaching, and there are more facets to it than most people allow themselves to understand.
The fallacy that personal finance is a boring subject is far from the mark – how can it be boring if it’s keeping cash in your bank account? That extra cash could be used to head off on a holiday, buy something you’ve always wanted, or simply enjoy a good old night out on the tiles!
Whatever you choose to spend your money on, it’s always worthwhile arming yourself with some of the best personal finance tips around. That way, you’ll keep cash in your pocket and you won’t be paying other people for things you either don’t really want or can’t really afford.
To help you out, I’ll be sharing the 10 best personal finance I’ve received in my life.
I won’t ever forget them 🙂
With this article, I DO hope that these tips will also help you manage your money more smartly, to last longer.
Don’t Always Go For What is Easiest
I get it, you’re busy, life is stressful, and you might not have time to sit down and really look into the ins and outs of a particular subject. Instead, you just make the quickest and easiest decision and hope it works out. Bad move.
Whilst you might need to dedicate a little time to research and understanding, it’s always better to do your homework and look for perhaps more time-consuming or complicated options, than just jumping what seems easier. It might be easier because it’s going to cost you more in the long-run!
For instance, many people find investing quite complicated. For sure, there is a lot to learn and if you want to make shrewd investment decisions you need to dedicate time to it. BUT, by investing a little of your wage every month, you could actually be lining your bank account for years to come.
This is a passive income method that could bring you great rewards, and all you need to do is spend a little time doing your homework and deciding what investment option is best for you.
Don’t be lazy when it comes to your money – take the time to find ways which could bring you extra, for little effort in the end.
If You Plan To Invest, Start ASAP
At home, we spare $400/month from our wages and add it to the stock market. Thanks to the effect of The Compound Effect, I’ve managed to make a 20% per year profit from the stock market over the last 2 years – that’s around $5,000 so far (or around £4,000 is you live in the UK). The 20% year profit will be generating even more income thanks to the compound effect (added a snapshot to show you how much we’ve made so far in just 2 years).
If you want to learn more about the compound effect, you can get a copy of The Compound Effect (strongly recommend it if you are serious about your money).
In my case, I normally invest in companies from the NASDAQ 100, (the 100 largest companies operating in the US market). The main reason is that the NASDAQ market is pretty stable and fast-growing at the moment, plus the trading platform I use only charges $0.50 per transaction which is ridiculously low compared to any other platforms/markets.
I use DEGIRO as my trading platform – 100% the best trading platform at the moment. Not only they have the lowest fees, but their support system is great. On top of that, the App is very intuitive for new starters.
Look For Passive Income Ideas & Make Extra Money
Without a doubt, one of the best personal finance tips for those who want to earn extra cash from the comfort of their own homes is to find a passive income method that you can do whilst sitting and watching the TV, or preferably, one which runs itself.
If you like making clothes in your spare time, why not sell them? Do you enjoy taking photos, why not sell them to a stock photography site? Are you a keen writer, why not start a blog and monetize it?
Another option is to sit in from the TV with your laptop on your knee and do some surveys. Sure, you’re not going to get rich straight away, but the more you do, the more you earn. There is potential for making a full salary if you’re dedicated (or even more), and that’s cash that you could easily put towards something big!
Related article: How To Start A WordPress Blog With Bluehost – Step By Step
Save Something, Even if it’s a Little
One of the best personal finance tips is to always save a little from your wage every month, even if it’s only a little. Little adds up to a lot over time (remember the compound effect?) and if you choose a high-interest savings account, you’re basically getting paid for doing nothing!
Make sure to shop around and find a savings account that works for you; ISAs – in the UK – might be a good choice or a simple savings account which has a high rate of interest. Again, this is something you need to dedicate time to if you want to make the right decision, so don’t be afraid to ask questions if you’re not sure.
Then, set up an electronic transfer for a set amount to leave your bank account on the day you get paid. That way, you won’t see it, so you won’t be tempted to spend it.
Don’t think that you need to put away half of your salary, a quarter, or any large amount if you really can’t afford it (you can start from as little as $20/month). Yes, it’s best to try and save as much as you can for unforeseen circumstances, but there’s no point in scraping by every month as a result.
Don’t be Scared to Haggle
Have you ever tried haggling with your utility providers? It’s definitely worth a try if you want to keep cash in your bank account every month, but many people feel it’s cheeky to do, and therefore don’t try!
If you don’t ask, you don’t get!
If you want to try and reduce your monthly outgoings, sit down, and make a list of everything that goes out of your bank and how much.
Then, identify the ones that you might be able to negotiate a little. Call the number and just give it a try.
A good method here is to call your car insurance when your policy is about to run out. Mention that you’re thinking of moving to another company – they’ll want to keep your custom, so the chances of getting a reduced premium are quite high!
You could also switch providers on any of your household utilities and move to companies that are offering free cashback offers or other rewards. It’s money saved!
Roll With The Punches When it Comes to Cashflow
Whilst you should always keep a close eye on your money (and try to control it as much as possible), you should also bear in mind that sometimes you need to change your approach.
The same strategy isn’t going to work forever, so perhaps you need to think about making a few changes like moving to another bank. Maybe you need a different bank account that’s more suitable for you (or with better returns).
Another thing that can – and will – change over time is your budget. No matter if your income changes or your living circumstances stay the same, it’s always a good idea to re-visit your budget. Is it still working for you? Is it realistic?
Don’t be afraid to change and adapt to new circumstances. Prices go up and down every year, sometimes shopping becomes more expensive and the rent goes up. That means your old budget is just not going to work; as a result, you’ll need to sit down and rejig everything around and find a new budget that suits you better.
If you need to change things, go with it. Don’t be too rigid! This is probably one of the best personal finance tips I’ve ever received.
Related articles: How To Make A Budget Plan For Your Family
Be Wary of Fees
It’s easy to assume that a small fee isn’t a problem and you can just pay it.
For instance, maybe you use your debit card overseas whilst you’re on holiday and you know that you’re going to have to pay a small fee as a result. You shrug and accept it.
However, if you use your card several times over the space of a two-week-long holiday, you’re going to be building up fees and by the end, you’re giving cash to the bank that you could have used to have a three-course meal!
Always be wary of hidden fees and upfront fees which seem small. Then, do your best to avoid or minimise them. Do your homework and know what the fees are for using your card in certain places or making specific transactions. If you know the fee is going to be high, look for alternative options with lower fees, or zero fees if at all possible.
You could also use an online tool that analyses your spending and identifies hidden fees or money drains. There are plenty around, you simply need to find the one which you find easiest to use.
You don’t have to spend a fortune on an accountant to spot things like this, you just need to have your eyes open and know what to look for.
Use Credit Cards For Large Purchases – With Caution
You might think that it’s always a huge no-no to use credit cards, but if you use them sensibly they can actually be a better option than saving up or paying with cash.
For starters, if you use a credit card for a large purchase, especially online, you’re getting protection from your credit card company. In addition, paying off the amount quickly, i.e not just paying the minimum amount every month, helps to improve your credit score.
Some credit cards offer rewards. If you already have a credit card with a balance on it, you should consider moving it to an interest-free credit card and pay up the balance within the interest-free period – it’s one of the best personal finance tips around!
Budgeting Doesn’t Have to be Boring
When you heard the word ‘budget’ you probably roll your eyes and want to change the subject.
However, budgeting is vital if you want to not only have total control over your money but have enough cash left over at the end of the month to avoid going into your overdraft – overdrafts can cost you lots of money!
The bottom line is this – living on a budget doesn’t mean scrimping and saving, it means knowing what you have to spend and what you need to save or pay something with. By having that knowledge, you have your own personal finance power. This builds your confidence and if you’re always robbing Peter to pay Paul, it will make you feel far better as a result.
Sit down with a piece of paper and a calculator and write down absolutely everything you pay every month – don’t forget anything and don’t round things down, be realistic.
Another option is to use my FREE monthly budget spreadsheet, you just need to add your email and I’ll send it automatically to you, directly to be printed.
Work out what you can reduce and then try haggling.
Once you’ve got your monthly outgoings as low as they can be, work out what you have spare. That’s how you figure out how much you can afford to save, but make sure that amount isn’t going to leave you short for regular monthly spending (that’s the last thing you want) e.g. food, drinks, clothing, travel, actually having a life, etc.
Give yourself a set amount to spend on certain things and then review it in a couple of months to see if it’s working. If it’s not, change it. Budgeting doesn’t have to be hard and it doesn’t have to be boring – nothing is boring if it makes you feel better in the end.
Related article: How To Travel On A Budget And Save $1,320 In Your Next Trip
Don’t be Financially Unrealistic
Whilst you might want to be the latest entrepreneur to hit big, you have to be realistic and accept that it’s not really likely. I don’t want to dull your dreams here, and maybe you will go on to hit the millions, but in terms of personal finance, it’s best to keep things realistic and your feet on the ground.
It seems pretty obvious BUT…
Don’t go spending money you don’t have.
If you want the latest iPhone and you really can’t afford it without paying for it on credit, save a little every month and pay for it outright. Another option is to talk to your phone provider and look to swap contracts (but keep your monthly payment around the same amount).
Being realistic means that you’re not adding extra outgoings to your budget every month, and you’re working towards your overall goals in life.
Of course, try things that might bring extra cash, but don’t allow your head to stick in the clouds to the point where you make risky decisions when it comes to cash.
Related article: 15 Practical Ways To Start Building An Emergency Fund
And with that, the list is completed. These are the 10 best personal finance tips I’ve received and I’ll never forget. I do hope they can be as much help as they have been for me. By following them closely, you’ll find that not only you keep cash in your bank account, but you’ll feel more confident and upbeat about your money situation overall.
Do you already apply any of them in your day-to-day? Do you have any other tips you want to share? I can’t wait to hear them!