Financial advice that is not "Don't have kids" or "Don't get married".
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Don't spend more than you earn. Honestly. Also: A penny saved is a penny earned.
If it's not essential write it down and sleep at least one night before buying it.
Before you leave your parents house, before you start your new life, SAVE! SAVE as much money as you can, it will never be enough, but it will save later headaches. Put aside as much money as you possibly can.
well yes, unless you leave your house from your parents to move to a well-paying job, in which case you are sorted. That's what I did. I was lucky.
Before you make any financial decisions ask yourself HAL
am I
Hungry
Angry or
Lonely
Pay yourself first. Take a % of every paycheck, before you ever build a budget, and save it. Start at 10% and increase it every time you get a pay increase.
credit ratings are a scam to keep you in debt
As a former credit counselor, I can honestly say that you should worry less about your credit rating and more about your debt to income ratio. While having a good credit rating will help you get a better interest rate on car and home loans, you shouldn't buy too much on credit as a lot of companies like to push their interest levels up to near-usury levels. When in doubt, read the paperwork on anything that you're going to pay off over time. Check out the potential interest rates, late fees, and other random charges that can come up without warning.
Also, after you've had a loan/credit card/whatnot for a couple of years and haven't missed a payment, see if you can negotiate a lower interest rate. If not, find a lender that can and get a loan to pay off the higher interest debt so that you save more money in the long run.
And, when in doubt, live within your means. Don't feel the need to buy first generation electronics, new cars, or any kind of vanity items. That's where the creditors get you - and they know it. If you have any other question, just reply below. :)
Any spare change you have save it. Even the low denomination coins. It all counts and the majority of high street banks have coin counting machines so it’s easy to pay into your account.
Can’t afford something? Then don’t buy it. Save up for it.
Clothing and footwear - look after them. Do not replace them if it’s not needed. So what if you’ve had that jumper for ages? There’s no holes in it, it still looks smart so you don’t need a new one. Make do and mend.
Crowdsourcing (go fund me) after an unexpected/expected death is not Life Insurance. It might be a bridge for the short term, but if you are building a family, Life Insurance is important. Don’t scoff. Young families wait too long and then can’t qualify for appropriate term policies. Don’t neglect.
Cook more often and do less food deliveries.
As my husband doesn't cook other than the basics, after I had back surgery, we decided to do frozen dinners. Then he could stress about me and not cooking. I lived!
before each month make a list of extra expenses of the month and try to stick to it
Usually the extra expenses come as a surprise though. But by principle yes.
Living below one's means and saving regularly is important but then investing your savings is just as crucial to achieve long term financial safety and indepence. Sticking to tried and tested ways are doable for everyone, no need to be the next Warren Buffett
Tried and tested ways: put your money in a broad low-cost ETF like the iShares Core S&P 500 ETF (IVV) or the Vanguard S&P 500 ETF (VOO). It means you invest in the entire Standard & Poor's index of the 500 biggest American companies. Find a broker that will charge you no money or very little for every purchase. Do it every month. Keep doing it forever. You'll be amazed.
Always pay debt first before saving. I know so many people who are trying to save up when they are still accumulating debt interest. Holding that €100 feels good, but it's fake, pay debts, pay debts!
Strange one, but working in the travel industry because you often get jobs with accommodation included. The saving in rent in your early life is incredible.
Don't buy a car if you can possibly survive without one - absolute money pit.
Work all the overtime while you're young and can bounce back from it. You don't want to have 3 jobs in your 50s so set yourself up well.
Don't smoke!
Don’t do taxes , launder money , sell children , eat IRS agents and buy as much Lego sets as you can (JOKE)
Don’t die – funerals are expensive. But seriously, eat and live healthy. Being sick costs money not only in the US.
Stay out of debt. Once you get into debt, it’s very hard to get out. Pay off your credit cards every month, or don’t use them at all.
In theory, this is good advice. BUT whether we like it or not, credit is necessary in modern (American) society. As my husband and I found out. My personal credit is excellent, but he managed to stay 100% debt free-meaning that his credit score was literally 0. This affected our ability to rent a house in our area because even though I have good credit, he was the only income-earner, so it was only his credit that got checked.
Take care of your health. Longer you stay healthy, longer you will be able to earn money. Also you will save on healthcare as it can get expensive in every country.
The below advice are for employed people with a decent salary. If you are poor and have a low salary, you need to first escape poverty. There are two things you need to do to escape poverty. (1) Open yourself to opportunities. Hang out at bars and similar places that are frequented by rich people. Make friends with rich people and meet their friends. (2) Develop some unique marketable skills, like ICT or management science. Casually mention those skills while networking. At some stage, someone will "know a guy" and will offer you a better job. BUT you can't escape poverty without a marketable skill. And yes, networking and socialising is crucial. People give jobs to people they know. Despite job adverts, I've discovered that nepotism really is the best route.
On buying things on debt: You have to ensure that your assets outweigh your liabilities. As long as you "have" something that is appreciating in value, you can sell it at a later date to recover your funds. Obviously, this assumes you can afford to buy anything at all. My suggestion if you are poor is to buy small amounts of shares in companies and leave them for years. It's a relatively sure way to make money. Speaking from experience, and speaking from a position where I started out poor.
A credit score will determine how much debt the bank thinks you can manage. If your credit score is low, you will never be able to buy an asset because you'll never be able to save up for it. Let me give a simple example. When I was about 25, I bought a house (2 bedroom), for amount X. After three years, the housing market had improved so much I sold it for 2X without having done any significant improvements. I would never have been able to afford the amount X without borrowing from the bank. They lent it to me because for five years prior, I had had a credit card and managed it well, so my credit rating was (and still is) outstanding.
Choose your debts wisely; different accounts have different interest rates. A homeloan is generally better than a credit card, and a personal loan better than a credit card. However, a credit card pays good interest on positive balance so it is better than a savings account. At least in my country (SA).
Don't do funerals. The dead person does not care and it makes no difference to them. Just cremate or compost if that option is available and walk away.
Buy gadgets second-hand (laptops, sports watches, cars, cellphones etc.). Cost to repair secondhand is always lower than new cost. Always insure your gadgets particularly cars. Pay insurance before food if you can. Without a car you won't get to work and won't earn money for food.
"Saving" is a myth. All you are doing is putting your spare cash into a low-interest account. Your bank takes that money and invests it in something aggressive and makes a fortune with YOUR money and gives you a tiny profit. Rather buy stocks and shares yourself. You do not have to buy an entire share in a company; some brokers let you buy portions of shares. Or crypto, if you really want a wild ride.
Buy quality shoes and avoid puddles like crazy because one puddle can turn your shoes into a mouldfest.
Assume that your monthly random unexpected costs will be about 20% of your salary and keep it aside if you can, for those emergencies. If the emergencies don't happen, throw it into either stocks or debt servicing.
Without having even read other replies my advice is not to get financial advice from a social media group of people who are in many cases less than 16 years old.
Buy yourself a monthly gift card. If you have trouble over spending your credit immediately.
I use my credit cards like a debit card. I don't go over my limit. The only reason I don't use only debit cards is ✨Credit Card Benefits✨
I do this too. People find it odd but I find it useful to have to pay off a bill every month as to exactly how much I spent. I can quickly see increased spending or particularly expensive months in a way I don't see with my bank account. And the benefits!
Never have debt. Never use a credit card or get a loan. Screw your credit score.
nope, most people can't afford a house or car from savings. This is nonsense. PS I went from poor to owning 3 cars and 2 houses so yeah, take my advice. You buy a house and fix it up and sell it as soon as the market is up. Result: profit, and a deposit on the next place. rinse repeat.
Dont spend a ton of money on stupid stuff you wont use in 2 weeks even if it looks cool.
A couple of good pieces of advice. One: Always pick through your bank statements every month in detail and make sure everything looks 'right'. Sure, it's a chore but it's also a good way to highlight where you're overspending AND remind you of what money is going out of your account as well as what's coming in.
Always pay off loans (even money borrowed from family members) as soon as you're able to. If you get an option to pay a loan off early without too much of a penalty and can afford to, always do that first as the ongoing cost in interest is bound to stack up (though again pay close attention to how much an early payment penalty will be vs how much the overall interest may change over the course of the loan - in the current financial climate all bets are off!)
Never treat an overdraft or a credit card as 'real money' and don't try to live off either. That's the quickest route to unrecoverable debt that I can think of (and I speak from bitter experience here, overdraft charges are extortionate so if you go overdrawn every month you're probably costing yourself a considerable fortune).
Buy low, sell high
Nothing is a bargain if it’s something you don’t have the money for. I have a (grownup) child who is always:
*Showing me all this stuff she buys that she bought because they were so much cheaper than they usually cost
* tells me at the end of the month that she doesn’t make enough money to pay her bills.
I will and do, buy the coffee my husband loves, when it is on sale, or it 2 bags. I have never seen it below 7.00 a bag, but it happened on Sat! So bought two bags. I do different coffee, but grind my own beans each week, keeps the ground coffee in a sealed container. So even though his coffee was 6.37 a " pound" really 12 oz. A bag of my beans is 19.99, but will last me 2 months. I don't drink as much as him. So, buying extra for him on sale works well and is money well spent!
My advice is for those who make less than $40K/year and live in the USA because a lot of people aren't tech workers making 6-figure salaries:
(1) IMO credit scores are actually important and will make it easier for you when emergencies hit and you need a loan, or if you need to move to a new apartment, or even get a job. Yes, there are jobs out there that check your credit rating.
(2) Your credit is based both on your payment history AND your debt-to-available credit ratio. For example, if you have a $5,000 credit limit, try not use more than 30% ($1,500) and pay your cards off every couple of weeks before they accrue interest. Each time you sign up for a new card, or shut down an old card, it can negatively impact your credit.
(3) If you're an impulsive spender, an old-school way of keeping track of your money is to pay your bills first and then get the rest of your money in cash. Keep it in an envelope in a safe place. That way you can see how much money is actually left each week instead of waiting for it to be pulled from your bank account (takes 2-3 days) or accumulating debt on a credit card.
(4) Get trustworthy roommates.
Invest, invest, invest. If a windfall ever falls into your lap, even if it's only $10,000, find someone you trust who can steer you toward some solid investment(s) to put your money into, and just do it! You'll be glad you did come a rainy day, or, if you're young, you will be glad come retirement time that you have that extra nest egg.
Common sense; that's what I've always tried to live by. Also, make allowances for those little extras and don't be ashamed to bargain shop!👍
I note there's a lot in the news about student loans and whether or not you have to pay them back and when. My advice to anyone who has student loans on hold: pretend you DO have to pay them back. If you have spare money left over (and I know some folks won't), put it aside as if you're making a payment. When you DO end up paying it back you'll have some saved, and if you don't have to pay it back you'll have some savings to help you when you're out of school.
If you have balances on multiple credit cards and/or loans and you want to pay them off:
Pick the one with the smallest balance, and put your extra $$ towards it (plus the $$ you were previously paying on it). When that is paid off, once again, pick the one with the smallest balance. Put the $$ you are no longer paying towards the first card, plus any extra, towards that one. Continue till your debts are paid.
Oh, and BTW, don't use your cards until this is done. Live within your means.
Take your time selecting contractors for the renovations etc. Rather spend a bit more than paying double later for correcting stuff after wrong contractors.
I subscribe to Dave Ramsey’s baby steps. I like that it’s customizable to each person’s circumstance. He does base it off of biblical finance but even if you aren’t religious, the principles work. And find a local financial advisor who is endorsed by Dave’s brand. So important to find this when you reach the step for investing! They have a tried and true formula for diversifying your investments that helps build wealth safely over time and can work with you on how much you need to invest each year to reach your retirement goals. Get started while you are young! At our lowest moment, my hubs and I thought we were going to have to file for bankruptcy but after going through Dave’s Financial Peace University, things are finally getting back on track. Can’t recommend it enough.
It's fairly simple. 1.stop making anything but the minimum payments on everything. Save up 1000k as an emergency fund. 2. Once you have that, start paying anything extra you have toward the lowest balance, regardless of the interest rate. Pay lowest to highest. 3. Do not spend literally any extra money. You will not see the inside of a restaurant unless you work there. Get an extra job if possible. Suffer short term so you can prosper long term. Cancel all subscriptions. You shouldn't have anything but your utilities, food and rent. Gazelle intensity. Once you've paid off debt you can relax more and start to live a little more normally. 3. Now you start to save for a home. Do not take out any debt except a mortgage and only a 15 year fixed but put a good downpayment down. 4. Invest smart. Do not invest in get rich quick stuff. low risk index funds, mutual funds etc. Eventually you will become a millionaire, especially if you continue working extra or increase your income.
I know this sounds kind of dumb, but hide your credit/debit card from yourself. You know where it is, but it’ll make you ask yourself if you really need that coffee or remind you that you can make a perfectly good sandwich at home. I’ve saved a lot of my earnings this way, controlling my impulse purchases.
Does it need to be good financial advice? If not, sell all your worldly possessions and buy GOLD DUBLOONS!!!
If you don’t have the money to pay your bills at the end of the month don’t buy anything but necessities at the beginning of the month!
My parents used to take the money from our ( myself and sister ) piggy banks. Continued even after we got older. As a consequence my sister and I learned to spend it before they took it from us. As you can guess this screwed my relationship with money. My financial advice: teach your kids to save. Teach them to plan. Don't touch what they have earned/been given, it's theirs. All you do is teach them to spend it quick like my parents ended up teaching me.
