What’s your best personal finance tip?


We started a project on our Facebook page a couple days ago. We asked the scrimpers and savers to give us their best personal finance tip — and, so far, a few people have offered their advice:

  • The early bird gets the worm.
  • Stop eating out.
  • Buy what you need, not what you want and never what society tells you you want!
  • Ditch cable/satellite, make meal plans, and only buy what's on the ingredients list, pay cash, use a no-fee bank.

It's a great start. It's also interesting how even just putting something like this together works. I started reading the comments, and for some reason one of them just hit me in the face: “stop eating out.”

Wow.

I can't explain why that jumped off the page at me. It's not like I've been particularly concerned about our food budget. But for some reason, it caught my eye. And the next time I looked at the list, it stuck in my head. And now I'm thinking that I may have just found my next focus.

I really like these tips. But even more, I like what they can do. Even the act of reading the list is powerful. But what makes it special is that, by adding her thoughts to our call for tips, someone I don't know just changed my thinking. Thank you, Monica.

Here's mine:  Stick with it, and don't give up. You may not be able to see the light at the end of the tunnel yet. But that doesn't mean you're not on the right track. And when you get tired, look backward and remember how far you've come. Take a break if you have to, but then get back up and press on. You'll get there if you keep at it!

Will you help us build the definitive list of personal finance tips?

What is your best personal finance tip — whether it's because it helped you the most, it was the easiest to implement, or because it just made sense out of something you previously didn't get? Also, why is it your best tip?

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Dan
Dan
4 years ago

Don’t be afraid of risk. Or perhaps better advice would be to make sure to properly weigh up the risk of doing nothing before choosing not to take risk.

Jasmine
Jasmine
4 years ago

One of the most powerful tips we give to our clients, and perhaps the hardest to fully implement and be comfortable with, is a two-parter.

Live within your means
Your means is not as much as you think

A lot of times people spend money on things they can’t afford. On top of that, if you want to save and provide for your future, your means is smaller than you think it is. Sometimes, it can be a very hard lesson.

Lisa
Lisa
4 years ago
Reply to  Jasmine

Thank you. Great comment re: and your means is not as great as you think. I just finished adjusting my spending plan based on reality, instead of an overinflated means. Stepping out of the “monthly budget” myth helped a lot for me to see that 33% of my spending has nothing to do with monthly. Big lesson.

Beth
Beth
4 years ago

My best advice: be a critical thinker. Learn to read the fine print, ask questions, see through the marketing hype and do your research. Learn to identify and avoid emotional manipulation like fear mongering, fear of being left out, etc. Weigh the pros and cons. If you think about it, a lot of personal finance is counter culture – eating in when everyone else is eating out, buying used or not buying at all in their hyper-consumerist society, making investment decisions based on research rather than emotion. Doing what works for you rather than what you think works for everyone… Read more »

Thias @It Pays Dividends
Thias @It Pays Dividends
4 years ago

One of the most beneficial tips for me is implementing a 72 hour rule for most non-essential purchases. Essentially, when you find yourself wanting to buy something that you don’t necessarily need, sit on it for a few days and see if you still want it then. This helps keep you from buying on impulse and give you time to see if you actually want the item.

Fede
Fede
4 years ago

My recommendation will be to spend money wisely. Spend in things you love and don’t in needless things. Always have a plan or system establish to save and invest your money, choose the one it will work best for you, but make sure you have one.

Tina in NJ
Tina in NJ
4 years ago

Sit down from time to time and plan. It’s very easy to go with what marketers or your friends want, but you should really do/buy what you want. It’s okay to want lots of things, from an iPhone to a secure retirement. Figure out what you want most and figure out how to get it. Prioritize. Those who fail to plan to fail. (Yes, it’s trite, but it’s also true.) For a second “hint,” never stop learning. Boredom leads to spending money on entertainment (not that an occasional movie is a bad thing) and learning a skill like cooking can… Read more »

amanda
amanda
4 years ago

Make your own food and coffee, ditch cable. I like Beth’s point of personal finance often being counter culture. Doing what works for you really does work out better. For example, I really dislike car commuting, way more than most folks I think. It’s not traffic or other drivers, its that I must be in the car. So bought a house that always me to walk to work. It seemed odd to many people because I can afford a house in the suburbs but I love my morning and evening walks.

Lisa Aberle
Lisa Aberle
4 years ago

Question traditional advice that says you should buy a house. If you do decide buying is right for you, buy the smallest house that still fits your needs.

Emily @ JohnJaneDoe
Emily @ JohnJaneDoe
4 years ago

Take one step toward improving your situation. Then take another. It’s easy to get overwhelmed when you feel like you’ve already fallen in the abyss, or you feel like you have a mountain to move. But a small step is better than no steps, and can feel manageable and give you confidence to try more things. Those small steps add up, if you just keep going. So if you aren’t saving at all, try saving $25 a month. Then $15 a week. etc. If you are just paying the minimum on your debts, try rounding up to the nearest $10,… Read more »

Kristi @ Femme Frugality
Kristi @ Femme Frugality
4 years ago

My advice is to do what you can. Stop comparing your personal finances to other people’s personal finances. Their called personal for a reason. Everyone has a different story and everyone needs to pay off their debt or take care of their finances the best way that they can.

Greg
Greg
4 years ago

Do. A. Budget.

Every month (or more often). It’s part of the other tip that I thought of which is:

Pay. Attention.

Seriously, the good and bad choices become easily apparent if you are tracking what you bring in and what goes out.

Mike Strejcek
Mike Strejcek
4 years ago

A recent death in the family caused me to revisit / revise the beneficiaries on my Bank, 401k / IRA, and other investment accounts. Upon updating the beneficiaries on my investment accounts (i.e. T Rowe Price, Legg Mason, etc) I noticed (in the fine print) that the updated beneficiaries only applies to retirement accounts. Taxable / non-retirement accounts are NOT covered under the updated beneficiaries and in the absence of a Will or joint accounts only a Transfer On Death (TOD) would ensure this was passed directly to those whom I wish, without the accounts being subject to probate and… Read more »

Drew
Drew
4 years ago

You become rich/poor $5 at a time more than $500 at a time.

Jonathan
Jonathan
4 years ago

Pay yourself first and make it automatic. We make Roth deposits via direct deposit straight from our paychecks and Fidelity invests it automatically. We never even see it. Same can go for a 2nd checking account used to build your emergency fund. Most companies can direct deposit into as many accounts as you want. Take advantage of it.

Karthigan Srinivasan @ StretchADime
Karthigan Srinivasan @ StretchADime
4 years ago

Don’t go grocery shopping when you are hungry! You will save a lot of money.

freebird
freebird
4 years ago

Treat all money like seed corn, keep as much as you can and make it grow as quickly as it can. For example if your employer offers a 401k, contribute at least enough to get the match, keep the balance in stocks, and don’t borrow against it.

lmoot
lmoot
4 years ago

Buy for longevity (and by default, quality). This goes for housing, transportation, furniture, clothing, and goods. The less you need to repurchase in your lifetime, the better for your finances and our environment. My goal is to purchase as few phone, computers, cars, pots and pans as possible, and am on an ongoing mission to slowly replacing my current wardrobe as the items deteriorate, with quality lasting pieces…especially warrantee’d pieces.

I [try to] live by the creed:

Use it up, wear it out. Make it do, or do without.

Chuck
Chuck
4 years ago

Don’t finance perishable goods. Basically, don’t put food or alcohol on the credit card if you can’t afford to pay it off at then end of the month. It’s a terrible return on investment. Ditch cable. This has given me an $80 a month raise and it was something that was mostly used by the kids (and their behavior/creativity has improved since) Make a meal plan. Super challenging for us, but we end up spending less on impulse when there’s a plan. It’s also harder to justify eating out when you have a meal on the calendar already.

Rie
Rie
4 years ago

I just posted my savings goals for 2016 and how I will try to reach them. I think the most important tip is to decide to spend as little as possible instead of setting certain budget amounts. If I set certain category budget amounts, like $ 400. for food. I tend to be less creative and spend the entire amount monthly.

Kalie @ Pretend to Be Poor
Kalie @ Pretend to Be Poor
4 years ago

Wow, there are so many good tips, it’s hard to pick one. I’d say track your spending. Make a budgeting is one thing, sticking to it and always challenging is even more effective.

Also, shop at a discount store for groceries, and never buy a new car.

Jennifer
Jennifer
4 years ago

Use some system that takes the willpower out of sticking to your budget. ie put savings into a separate non-spending account, preferably automatically or before you see it, use cash envelopes and only withdraw what you will spend for the month (so everything that isn’t a house payment or rent payment), have your employer split your automatic deposit so that only part of it goes into your spending account and the rest goes into a savings account that you rarely look at, etc…

Lolly
Lolly
4 years ago

My suggestion is to dramatically cut back on car use.

For those who live in cities, taking public transportation or riding a bike can save potentially thousands of dollars per year while making you more active and healthier.

I’ve lived without a car for 15 years in 8 cities and it can absolutely be done in many parts of the United States.

Also, when you travel by bike or transit, you are less likely to impulse shop which can also help you save money.

Bethany
Bethany
4 years ago
Reply to  Lolly

This has saved me a ton in gas, wear and tear and insurance. I work from a home office and I bundle errands so that I make a circle and back to the house.

jestjack
jestjack
4 years ago

Hmmm….my advice, when you buy, by quality products. I bought a top of the line woodstove insert over 30 years ago. Could have bought a cheaper unit BUT because I bought a quality product it continues to serve me well despite being 30 years old.

Ernie
Ernie
4 years ago

The best money advice I’ve ever heard came from Jesse Mecham at YNAB. He recommends to “age your money.” This means putting more time between when you earn your money and when you spend it. I use to spend most of my money within two weeks (until I got paid again), but now I’m trying to push that out to four weeks…and then hopefully 6, 8, etc. This has helped me stop living paycheck to paycheck and has allowed me to save like never before.

Rae
Rae
4 years ago
Reply to  Ernie

This, exactly this, is the BEST advice for beginners. I have never felt more financially secure than when I started doing my budget based on last month’s income, while this month’s income builds up virtually ignored as it came into my account. It’s like having a secondary emergency fund, and I know that as soon as I have a full month’s income, I can fill up my budget envelopes and pay my savings account first.

Toni
Toni
4 years ago

The simplest tip can sometimes be the hardest “If you don’t have the money, don’t buy it”.

I grew up believing you can have anything you want, if they have a payment plan. Or, if you have room on your credit card, why not? The spiral of debt, once started, is hard to get out of.

Emergencies can happen (tip#2), “have an emergency fund”.

These are so basic, but I can still feel the pull of old bad habits.

Lindsay
Lindsay
4 years ago
Reply to  Toni

yes! If you can’t pay cash, you can’t afford it.

L. Cheng
L. Cheng
4 years ago
Reply to  Toni

My h.s. economics teacher, Mr. Ling educated us about how layaway plans are scams. He enforced what my parents told us, “if you do not have actual cash to buy something, then you do not need it.” Now that I only use credit cards (for points or cash back benefits), I pay all my credit cards off in full. Never paid a finance charge in all my life (mid-50s).

Lindsay
Lindsay
4 years ago

Stop buying clothes!! Pick 3 or 4 standby outfits, and buy better quality. Not saying you shouldn’t add nice pieces sometimes, but how many pairs of jeans and pants do you need seriously? I have limited myself to 3 pairs of pants at a time (among other things) and so far I think I manage to look pretty good and no one has visibly recoiled from seeing me wear the same pair of jeans 2 days in a row. Buying cheap fashion is such an addiction and so unnecessary (and costly! All of those $20 H&M shirts add up). I… Read more »

Colleen
Colleen
4 years ago

If you don’t have it, don’t spend it. Once you take on debt, no matter how small, you don’t own what you purchased, it owns you.

Darlene
Darlene
4 years ago

When shopping and tempted, I ask myself “Do I need this today?” Usually I don’t.

Trisha
Trisha
4 years ago

Live below your means, and learn as many skills as you can.

Mortimer
Mortimer
4 years ago

Confront your desire and abstract it. Say to yourself, “I am experiencing a desire to purchase X. Why?” Then wait seven days and see if you still have the desire. I almost never do.

Linda
Linda
4 years ago

Pay yourself first. Take advantage of your employer match.
Play this game, See if you can cut your utilities from the
month before. Have your emergency money in a credit union
not easy to get to. I don’t carry very much money.

Savenospend
Savenospend
4 years ago

Cut food budget down. Seriously. I found that it was the biggest bleed. No more prossessed crap and chasing coupons. (Remember that ghastly reality show about extreme couponers who were basically hoarders? One guy had a palette of toothpaste among his basement of soon-to-be-stale-dated food) Live below even what you think is below your means. This saved my bacon during a job switch and a budget cut at a new employer. Took months to find a job in this small market, so cobbling together pt jobs, eBay sales, and other things meant less tapping into savings and more time to… Read more »

CCH
CCH
4 years ago
Reply to  Savenospend

I made a car payment once…for the full amount.

GMan
GMan
4 years ago
Reply to  Savenospend

Wow a horse. I get the dream thing, but unless it talks it is NOT for me 🙂

CCH
CCH
4 years ago

Make it a competition so you are not only helping yourself, but helping at least one other person as well. My friend and I compete with each other by seeing who can sell the most STUFF on the eBay. The victory is multifaceted in that I’m getting rid of STUFF, which I loathe, and he is hopefully replacing the psychological thrill he gets from buying STUFF (toxic) into the greater thrill of selling STUFF.

Carol
Carol
4 years ago

Being in my fifties, I implore you to take good care of your health. Yes….that is my greatest financial advice. I am watching friends and loved ones have their dreams derailed due to their health. TAKE THE TIME to exercise daily (walking is free), get some fresh air and sunshine (again, free), cook your own meals so you know what you are eating (probably cheaper and your meals will be lower in fats, sugars and salts more than likely), go to bed earl enough to get 8 hours of sleep. Co-pays, trips to the Drs, specialists, lost time or earlier… Read more »

Jennifer
Jennifer
4 years ago

Remember that the person you work for lives in your home. YOU! You’re not working so hard, possibly dealing with horrible bosses/co-workers, and spending so much of your time and effort only for your employer’s gain. It’s primarily to finance your life and dreams. So shouldn’t you make certain that some of the pay from all that work benefits you and your future?

JS
JS
4 years ago

My advice … forget about “the Joneses.”

They don’t care about you. And they’re probably broke anyhow.

Jenny
Jenny
4 years ago

Advice from me,
Ask yourself first, and then think. I think that’s enough for you.

Ash
Ash
4 years ago

Develop other income streams, even very small ones. Often one thing leads to another through personal recommendation etc. This has made a big difference to my finances.

Steve
Steve
4 years ago

Learn to cook. There is a learning curve, but it’s totally doable. Use good resources – Good Eats, Cooks Illustrated, Harold McGee, Mark Bittman. They’ll do more than just show you a recipe and a pretty picture. They’ll show you HOW to cook. They’ll explain the reasoning/science behind the processes. Start small. Learn about individual techniques/foods one at a time. Don’t overwhelm yourself. Once you have the skills down, you’ll find you can prep meals faster, which negates one of the biggest reasons people don’t cook – it takes time. Eventually you’ll know how to make good food from cheap… Read more »

JC
JC
4 years ago

Instead of considering expenses on a monthly basis, have an yearly view. For eg. a cell phone plan might cost only $60 monthly ( a small magnitude) but in a year it costs $720. Then feel like not having a cell phone at all.

Mr Hairy
Mr Hairy
4 years ago

Growing wealth is like growing a beard; it doesn’t happen overnight.

Jan
Jan
4 years ago

No one cares more about your money then you do!

Cautious
Cautious
4 years ago

I have two that are equal, and scare me.

1. “I am at where I am at today because of the choices I have made.”

2. When you buy something you are spending your life. Because, the only way to get back what you spent is to go make more, which usually means giving your life and time at work.

Jerome
Jerome
4 years ago

We started saving 20 years ago and are now financially independent. I just analysed where our net worth came from. Turns out that about 40% is money we saved and a whopping 60% is profit on our investments. This really blew me away, as I am in no way an active or brilliant investor and I have probably made most mistakes you can make. The strategy which turned out the best for us was to just buy dividend paying stocks and manage the portfolio in a slow and deliberate way. So no blind “keep them forever” but also no panicky… Read more »

Grace @ Return On Investment
Grace @ Return On Investment
4 years ago

The best personal finance tip so far is getting a personal finance planner to guide me. It cost me some bucks but it ca save me huge bucks due to wrong investments or financial decisions.

My Factoring Network
My Factoring Network
4 years ago

Creating a nice pocket friendly budget is the key rule. Most of us are always in the race to earn money or save money, but hardly we keep a track on out expenses. If we start a keen look on our expenses then we can easily manage our budget. This is what i have practised and has worked for me.

Jonny
Jonny
4 years ago

1. I heard it in different language so not sure about translation:
“If you want to live like others can not afford to live, you must do what others do not want to do”

2. This one is from Bodo Schaefer, I guess
“People usually overestimate what they can do in a year and underestimate what they can do in ten years”

SW
SW
4 years ago

I recently looked at my total investments and savings and was overwhelmed I accumulated $500k. I’m in my late 30s so it may not seem like a lot to some but for me it is amazing. I came from a family that lived paycheck to paycheck and borrowing was a monthly habit I saw. I did not want to live that way so for me, my tips are: 1. Education – Without it, it will be hard to earn a good income. Get the highest education you can and use it. 2. Promote – As you learn more skills get… Read more »

don
don
4 years ago

Pay tithing (10% of your income) to charity right off the top of your budget.

It’s mostly a Christian and Jewish thing, but it helps you focus your remaining money on what is most important. I would guess that people who pay tithing have fewer financial problems then those you don’t, despite a smaller paycheck.

Dan
Dan
4 years ago

Cash. You don’t need credit cards. Just use cash.

Dan
Dan
4 years ago
Reply to  Dan

My 2% cash back credit card is better than cash because I pay the balance off each month. However if you can’t control your spending when you have a credit card is in your wallet, cash is better.

Dan
Dan
4 years ago
Reply to  Dan

In my world, 2% on the amount of money I spend would be an insignificant sum.

The Other Dan
The Other Dan
4 years ago
Reply to  Dan

“Insignificant” daily savings become significant over time, particularly if you are saving “insignificant” amounts of money in each of several different ways each day. A 25-year old person finding ways to save an insignificant $1 per day and putting it in a Roth IRA yielding an 5% average return will have an extra $46K at age 65. Of course saving an insignificant $1 is worth the effort only if the effort is fairly insignificant. Once you get a credit card and set it up for automatic payment of the balance, using it isn’t much effort. You will save $1 every… Read more »

Dan
Dan
4 years ago
Reply to  Dan

A dollar a day in terms of a 2% rebate would require 18,250 dollars to be spent on a credit card alone. I don’t spend that much money on every single expense of mine for the entire year, including items that cannot be purchased with a credit card.

This is just my opinion, you’re welcome to yours, but I spend less money when I limit myself to $200 every 2 weeks. Spending less money, in my case, is a greater savings than a 2% rebate on my spending.

The Other Dan
The Other Dan
4 years ago
Reply to  Dan

You are right. A 2% rebate on $200 in purchases every two weeks will only yield you about 29 cents per day. That’s not $1, but it’s a start – you only need to find a way to save another 71 cents per day. Hmmm. If you smoke you could reduce your consumption by 2 or 3 fewer each day. Or quit completely and save a bundle. But if you only spend $200 every two weeks, you probably don’t smoke. I saved about 50 cents per day by reducing my home internet speed from 50Mbs to 15Mbs. Slowed downloads a… Read more »

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