29 of the Best Personal Finance Tips for Beginners and Beyond
If you search 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 knocking on those articles, but I wanted to write one more focused on the must-haves.
And secondly, all of these finance tips are things I started doing in late 2014 and really were key to how my financial life has changed.
How have these finance tips helped me? I self-manage my investments, have a 70%+ 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. 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 calendar, but when you are first starting out you need to do this.
A budget 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 between 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, Personal Capital.
2. Write Down All Your Debt
Now, your budget and net worth might give you some insight, but I like to write down all my current debt 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. Slow Down Your Lifestyle: 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. Maximize Your Credit Score
Understanding your credit scores and credit report is another important personal finance tip for beginners. Credit Karma is free and doesn’t hurt your score to look at your reports.
But, monitoring your credit can help you catch mistakes, overdue bills, info about your loans, and just overall how your score is doing. And it can help you prevent identity theft too.
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 get your 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.
Sounds somewhat controversial, but having this mindset will keep you on your savings targets.
Too many times you pay everything else first (like bills), and 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 Your 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 CIT Bank, which can help you build an emergency fund.
8. Spend 1-3 Hours Per Week Reading About Finances
If you want to learn how to take control of your finances, you need to read.
It doesn’t matter if you choose to read books, blogs, or other well-known financial magazines. Just a few hours a week can change your financial life.
I got in this habit in late 2014 and continue this process today. You’ll be surprised at how much you learn in a short amount of time.
Related: Looking for budgeting, investing, and money tools or apps? I’ve listed some of the best ones that will help you succeed with your personal finances. Check out my recommended list here.
9. Your Financial Education is on YOU
This might be the harshest personal finance tip out of them all. But it also is the truth.
No one is generally going to hold your hand and show you how to succeed with your personal finances.
This is on you to take action and change your financial health. It will be up to you to start learning and spend time on how finances work. You can do it!
Related: Want to become more financially literate? Here are eight simple ways that you can.
10. You Need to Make More Money
We all hear about budgeting, cutting back, and be mindful of your spending. But at some point, you hit a wall. You need to increase your salary and make more money.
In your job, find ways to increase your skills, take on more, learn in your spare time. Ask for a raise, know your career worth, and hustle to get the salary you deserve. It won’t be easy, but it’s necessary.