Do you talk to your friends and family about money? I was talking to a friend, and we got on the topic of money. I am not one to openly discuss my own personal finances, but when the subject of money comes up, I do perk up and show interest in the subject. Anyway, she asked a few questions about where her money should be invested. I told her I didn’t know because I’m not a financial advisor. I don’t know her entire situation, so I could only tell her how I’ve managed my own money over the years. I told her about some mistakes I made and some basic things I learned to help me to save and grow my money faster. Our conversation went on longer that I thought it would, but I figured I would share some of things we talked about.
And, I Repeat…
I am NOT a financial advisor. Don’t blame me or any other random person that gives you some “money tips” for any of your financial decisions. Don’t be talking about, “but Che said…”. Anything you read past this point is for entertainment purposes only. Take that as advice for most things uncertified people tell you. LOL! Anyway…here are some of my tips.
Start Where You Are
Realize that everyone is not starting from the same point. Don’t compare your finances to someone else. You don’t know what help someone received to get started, so start with what YOU have and build from there. If you are earning, saving and investing more money this year than you did last year, then you are winning. The goal is the be better than your “yesterday” self.
Learn the Art of Saving
Regular everyday savings accounts (traditional banks) are convenient, but they have terrible interest rates. I only keep up to $1000 at most in my traditional (for quick emergencies) savings account. Anything over that is getting transferred to a high interest online savings account. The interest rates on savings accounts suck in general, but you might as well squeeze as much interest out as possible by putting extra funds into your online account.
F-You Money
Get some F-You money. There will come a point in your life when you need to get out of a situation (whether with family, friends, or acquaintances) really quick. Like…I’m catching the next flight out quick! Some call it an emergency fund, but I’m talking about more than just an emergency fund money. This is that side-side money…you know, your F-You stash money. This is basically financial independence money. You know, that money you have so that you are not dependent on someone else in a wary situation. Get you some of that money!
Spend Wisely
Live below your means. Invest in purchases that will give you a return. If you invest in or pay for something that will give you a return in the end, you’re on your way to better managing your money. Also, when you buy something that is of quality, it lasts longer. So, you often “save” in the end by not buying cheap things over and over again. So start spending on quality purchases that will last.
Budgets Do Work
Learn how to budget. Some people hate that word. I equate budgeting to counting calories. Everyone doesn’t have to count calories. Counting them isn’t fun, but once you know what you are doing, you don’t have to be so regimented. There are many budget apps that you can use if you don’t like making spreadsheets. It’s just good to have an overview of your where you are spending your monthly income. Once you know your spending patterns, you’ll be able to better control where your money is going.
Get Out of Debt…FAST
If you are in debt, pay off your debt with the highest interest first. That’s what I do, but others may feel more comfortable paying off the lowest balance first, to motivate themselves to keep going. This is a good option too. Whenever I pay off a debt, I use the “extra” money towards paying off the next debt. After all debts are paid, you can build your savings faster. Do what works best for you, but just keep going with paying your debt down until it’s GONE!
Invest in Something
After you have paid off your debt and built up some savings, start investing your money. REALLY START. Contribute more to your 401K or retirement account. Or simply invest it in yourself, to start a business or learn something new. Maybe just start with buying one index fund. Just figure out where you can put your money, so that it can eventually work for you.
Keep an Eye on Your Credit
I use Credit Karma to check my credit score and check up on my financial status. You can sign up for free and periodically check on your credit score to make sure it is going up and not down. Using that site does not impact your credit score. It really doesn’t matter what you use, but keep track of what’s on your credit record especially in today’s age, where people are getting hacked left and right.
And Be Responsible with Credit
Use credit cards to your advantage. For instance, I have a travel credit card with no foreign transaction fees. I also received a $250 bonus when I signed up for it. I ONLY use it when I travel. If I charge anything to it, I pay it off in full. Be smart when using your credit cards.
Lazy Money Works
Find a way to make passive income. Make your money work for you. As we get older, I feel we should aim to work less and still make more money. Start today building up for your passive income future. You can invest in stocks or index funds, start a “passive income” business, invest in real estate, write a book. Whatever you decide you will have to put up some money or time at first, but over time, that money will start paying you back. Although income is called passive, it usually comes at a cost (time or money) at the beginning.
Change Your Money Mindset
This is an entire topic in itself, but basically get rid of a broke mentality. Stop hating on people with money and judging people for how they spend THEIR OWN money. People value different things, and that is OK. Worry about your own finances. People with wealth are not focused on others. More on this later.
Finally…
I AM NOT A FINANCIAL ADVISOR. So, with that being said, at some point, maybe you should invest in hiring a financial advisor for guidance.
Do you have any financial tips that you want to share? Do you talk openly about finances with your friends and family? Let’s talk!
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