20 Tips for Managing Your Money - in 20 Words or Less
If you can add and subtract, you can manage your money fairly well, and if you can multiply and divide, you’re already on your way to becoming a financial guru (if you ever plan on borrowing money for anything—student loans, a mortgage, even credit card debt—it’s important to understand exactly how compounded interest works. That’s where multiplication comes in).
Read on for 20 quick tips for managing your finances—and then try to live by them.
1) Learn the difference between good debt and bad debt, and try to accrue the former but avoid the latter.
2) Spend your disposable income on experiences rather than material goods, and you’ll truly enrich your life.
3) Pay yourself first—always.
4) Be frugal (refusing to spend more than you have to), not cheap (refusing to spend more than you should).
5) Always look up a company’s promo codes before ordering anything online. Chances are, there’s one or two you can use.
6) The best investment you will ever make is in yourself. Read a book, take a course, and put yourself out there.
7) Use cash whenever you go out, and never spend more than what you have on hand.
8) But credit cards can be a good thing—if you know how to use them. Look for low fees and high rewards.
9) Shop around before you buy. The Internet is a great resource; unless you need something immediately, order it online.
10) But not at the cost of your principles.
(It’s okay to spend a little more when supporting small businesses or companies that still manufacture their products in America.)
11) Write out a monthly budget that includes all income and expenses—and stick to it.
12) Don’t guilt trip yourself when you make an extravagant purchase—as long as you did your research first!
13) Encourage your family to actually spend time together during the holidays, instead of just buying each other gifts.
14) If you don’t already have an emergency fund, start one—today.
15) If you get a raise, don’t increase your living standards. Instead, sock that extra money away for a rainy day.
6) Check your credit report regularly (at least once a year), and know how your score affects you financially.
17) Establish all financial expectations with someone BEFORE you move in together.
(For tips on managing finances with a significant other, click here.)
18) Try to limit the number of times you eat out per month, and learn to cook for yourself at home.
19) Cut out any vices.
(The occasional glass of red wine is okay, but smoking and drinking regularly can really take a toll on your finances—and health. There are tons of free apps out there that will track exactly how much money you’ve saved since your last cigarette, like Quit It Lite and Quit Smoking.)
20) Take care of small problems before they become large ones (medical, mechanical, etc.).
It’s totally possible to enjoy the finer things in life while remaining frugal. In fact, being frugal is often the only way to get there. The simplest—and most important—financial tip you’ll ever hear is this: Don’t spend more than what you have (or what you can reasonably borrow at a low interest rate from the bank. Consumer debt is bad, but mortgages are (generally) good!)