For bills that are due on a regular basis but not monthly (car registration, oil changes, pet’s annual check up, HVAC check ups if you own a home, etc) - figure out how much each costs per year, add them all up, divide by 12, and set up an auto-transfer to a savings account for that amount every month. Don’t forget to include that amount in your monthly budget too.
Inherit your wealth!
Think of playing a 4x video game, focus every day on building your economic engine. Everything you spend should have some economic engine return (school, books, computer, etc)
Play this like 50 times https://buildyourstax.com/
Avoid debt.
Use the FASFA (in the us), if your under 25 marry another student (then your EFC is 0). Don't pay for grad-school, only join programs that pay you.
Networking, and Experiences are more important then over-time alone. Building your network is part of building your engine. Join the club, go to the networking parties, improv group, show up sometimes to the toastmasters, NETWORKING IS WORTH THE TIME AND MONEY. But, always make sure your networking with people who inspire you, and don't drag you down. It's ok to hangout with the down group, just not habitually.
It's ok to say no! No, really - you can say no to things. Nobody gives a shit about your phone, or car.
Learn how to use a spreadsheet (or just do the math by hand), get the TOTAL cost of all commitments over the life of the commitment (total cost of car, or house, etc), including all the one time origination fees. The only number that matters is the total cost, all the other numbers move around, but the total cost should drive your decisions.
Learn about your credit, and keep it clean (credit wise is good enough here)
Read Debt: The first 5000 years, appreciate the power of liquidity and opportunity costs.
Subscriptions are traps, avoid them as much as possible.
If you want to increase your credit score and are financially responsible, switch over to using a credit card.
Diversify your portfolio: Instead of putting everything into savings, split some of it into stocks and shares.
I've heard that they amount you should be putting into your pension is a percent of your income equal to half the age you were when you started saving. Not sure how accurate that is.
If you do happen to be well off and/or have a good job, spend your money on things you like rather than hoarding it.
Donating to charity and supporting small businesses is usually morally correct. If you have the means, tip your instance admin or developers of software you use.
Be careful when buying things that the seller can remove from you at any time. But don't use that as an excuse to not buy things you'll enjoy while you have them.
Avoid having more than one large loan at at time ($10000 or more). Pay off your loans early by paying to principal. Pay off your credit card(s) every month. Drive slowly to spend less on gas. Buy goods in solid form, no liquids, to save money. Ditch fast foods, do meal prep instead. Eat less meat, like maybe once or twice a week.
Use credit cards as cash, and pay off the balance weekly. This protects your bank account from fraud, as chargebacks and fraud are more easily dealt with on credit, and they tend to have better account monitoring and security than banks and credit unions. Even better if you have a cash-back/points card, that’s basically free money.
This also makes it easy to track spending if you have specific purpose credit cards. E.g, one card for groceries and gas, another for recurring bills or service payments, another for frivolous stuff, etc.
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Even if you have no other investments, open a high yield savings account and keep the bulk of your funds there, other than what you need for a general emergency fund and monthly bills. Current yields are over 4%, generally better than inflation, without any risk.
Budgeting is very important. some people like the 20% of income for saving, 30% for living expenses and the other 50% for everything else. Pre or post tax is up to you as this is a rule of thumb. Important part is that it should be easy for you to build up your savings to cover important expenses. spending 50% of income on housing may be really bad since having back to back years of badluck can screw over your savings, and not give you enough time to save up in between.
This is a general rule that applies when you make enough to do so. If you're struggling to pay rent, do what you can to remove risk and cut down on costs. One thing that helps is aiming to have savings. Often times, its cheaper to have money up front to resolve emergencies rather than later.
Car is one of those things that can make sense to remove. If you're commuting one hour already by car, and there's no public transit option then a car is a necessity. If you can take public transit, that could save you money on car insurance, car payments, car maintenance, and possible accidents.
For me it's a matter of my mentality. I have tried to get away from the spending mentality. As soon as you get money you start thinking of ways to spend it. You should be thinking of ways to save it. I usually try to think of something that is important to me. For me I like to go out and see the world. That means buying gas. If I spend $5 on a cup of coffee that's about 20 mi I can't drive. As others have stated you got all these streaming media sites and stuff. If you add that all up over a years time is quite a bit of money. You should get rid of anything you don't need. There are two ways to have more money: Make more or spend less.
We have a credit card that gives 6% cash back on groceries, 3% on gas and some discounts on streaming services. It blows my mind that every few months I can cash out a $200 or so credit towards my balance. I needed to buy those things anyway and have autopay set to the full balance each month so it really is free money. So if you can get one, absolutely a credit card that gives cash back. The one I mentioned is Amex Blue Cash Preferred but there other options out there that give other bonuses, like 2% back on everything or 6% back on something up to a certain cap.
If you don't touch an account for 7 years, it disappears from your credit report. That means NO ACTIVITY at all. No usage of the card, no payments, no nothing.
There are some debts that this does not apply to, like school loans, but I know it works on credit cards.
Now, here's the real world disclaimer. During those 7 years, your credit will TANK. You will have a hell of a time trying to finance a Happy Meal. If you have good credit, it will take another 5-7 years to get it back to where it was. But, if your credit is already trash, and you can't afford to pay every bill, it is an option that could get you back within your means.
Is it ethical? I figure the system itself isn't ethical, so stealing back from the ones who take advantage of others doesn't bother me one bit, but I totally understand if someone would disagree.
If you’re worried about auto charges emptying your account when you need the cash for more immediate things, have another account where you can stash some money so it’s always accessible.
For example, this week I knew I was gonna get a big charge and didn’t have the $$ to cover it. But it was pre-authorized, and it was going to go through and put me to negative.
So I moved gas money (required for earning money) into my Chime account, so I could keep earning when my main account went negative.
Got some bad marks on your credit, even a 30-day late ding? Dispute them, even if they're legit.
Americans can request a free credit report every year, from all 3 credit reporting agencies. Mark everything negative as, "wasn't me". The debtor has 30-days to respond, if they don't, fuck 'em, it's off your record.
Worst case? They come back and say the challenge was verified as false. Oh well.
I had a ~20 paragraph reply on my clipboard but Voyager can't post it.
Edit: pasted it into Gmail instead, then copied it and pasted it again as plain text then copied it again and pasted as a child. Lost all the carriage returns in the process. (it's nearly 4am and I'm using my phone.)
For context, it was written for a small town Facebook group but Facebook also blocked it for breaching community standards so I never published it.
Money is easier to spend than to make.
Spending money on higher quality products makes more sense than having to buy the lower quality product multiple times in the same span. But also don’t assume just because it’s more expensive that it’s higher quality.
I was spending $80-120 each year on lower quality hiking boots. About 10 years ago I finally spent $250 on high quality Merrells, haven’t needed to buy a new pair since. I hope the quality is still the same when I need to buy a new pair in 2035.
Learn about taxes and get a good tax guy. There's a lot of "hacks" you could use to significantly reduce the amount you need to pay to the tax office. Best case scenario - you own an investment property which means you can write off all expenses, including mortgage interests.
Before buying a house, learn about home loans. Get yourself an offset account and for investment property get an interest only loan. Refinance your loan every time there's a better deal.
Put all your payments, bills, rent, etc. on a credit card that earns you some points. Over time you will get free stuff just for paying your bills.
If you can afford it, put away 10% of all your income to a savings account. If 10% is too much put away as much as possible.
If you're into risk, invest into stocks. I would recommend long term investments in well established companies that will give a nice return in 5-10 years. If you're a dare devil, look into penny stocks with large dividends.
Stay away from crypto and "lucky shots". If it's too good to be true it's not worth it.
Do not user Klarma-esque services unless it's important. Same with payday loans.
You can use credit cards to build your credit, but your goal should be to pay it off each month. The first month you cannot pay it off in full (sans emergencies), stop using that card until you pay it off.
Bills get paid first. For loans, if possible, try to pay every two weeks to help bring it down faster.
Having a pet is not just getting a buddy, you need to be prepared to take care of them. They cost money and will keep costing money until they pass.
Honestly, check your job's benifits. They hide a lot of stuff sometimes. It was a year into my employment before I realized my job could make monthly payments on student loans. Their payments have saved me in some tight months. 👀
Edit: if you live alone and your place is small (or at least one level) you may want to look into a portable ac, even if you have central air. I take a lot of depression naps so I'm usually in my room, so that's really the only pace I need it. My cat knows where to go when it gets warm and we usually hang out in that room until it gets cooler (of course, if it's bad, I'll turn it on). It's saved me on my electric this year enough to pay for the $160 I got it for (though I was kicking myself because Craigslist had them for cheap).
If you can afford this...
...Whenever you're at the store and make a debit card purchase with the option for cash back, get some back. $5, $10, $20...whatever. And put this into a rainy-day fund. You never know when you might need some quick cash or it'd be the make-or-break for a quick splurge.
Granted, I learned of this method from a friend of the family who used this method to hide money from her husband so take it with a grain of salt.
- Save first. If you aren't living paycheck to paycheck, then always put your money in a separated bank account for saving.
This help eliminating the need to keeping track of your spending.
- If you tend to be fined for overdraft, then use an overdraft protection service. The service fee is much lower than the OD fee.
No income taxes(up to 120k) if you live outside of the US most of the year.
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Spend less than you earn. Earning interest is better than paying interest.
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Debt can be good if used wisely. I took on debt to buy an apartment that saved me money due to cutting commute costs more than interest costs.
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Think long term.
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"Prevention > Cure" and "investment in you and the things you use most will pay dividends in terms of health, money, and mobility" is the very TL;DR version.
If you're in a country with an asinine healthcare system like the US, it's definitely prudent to take care of your health rather than being caught out by something. This includes regular dental check-ups and cleaning (trust me).
You spend a lot of time sleeping. A good mattress and linens are very valuable to your health.
If you are on your feet a lot, comfortable should also be a priority even if they cost more.
Work out to your ability. Being sedentary is detrimental to your health and causes pain (both physical and financial).
Try to save and buy better quality versions of things where it makes sense. If you only spend $10 on something but it lasts only a year, it's better to spend $30 or $50 on something that lasts you ten years or a lifetime.
Remember that investments can take many forms and pay out differently. Investing in your health is already mentioned, but invest in your education. If you don't have money, you can still find tons of free resources online or at the library to skill up in ways that help your life (either your job prospects, your home life, or even your mental well-being).
And, perhaps more importantly than most other advise, live within your means.
I realize that not all of these are possible to everyone all the time (I was homeless for a while; I understand). These are goals and any progress is worth it; do not let perfect be the enemy of good.
