10 Personal Finance Tips for Anyone to Improve Their Life

Some people find lists super helpful. Here’s 10 tips for personal finance to get you on the right path no matter where you are financially in life. 

1. Get rid of toxic thoughts

I went to Rutgers in New Brunswick, NJ where we had this amazing bus driver named Stan. Every day, all day he would give motivational speeches. If not for the fact that I saw him all day driving buses, I would have thought he was actually a minister. I won’t lie – my first thoughts were “what’s up with this guy” and “why can’t he let us enjoy some peace and quiet.” He told everyone that walked onto our bus they would be successful and do well – class, life, whatever. I’m a realistic person driven by factual information so I mostly tuned him out in the beginning.

But one day, he was talking about winning and losing while I was at a low point. What he said struck me. When you’re winning, everything is easy – everything and anything seems possible. But when you’re losing, that’s when things are tough. Losing is like a disease. You start to blame everyone else and lash out instead of being supportive. And this causes the disease to grow and grow.

That was my come to Jesus moment. I looked for Stan every chance I could get. I needed to hear him say he knew I was going to achieve great things today – my test, my class, etc so I could believe it too. Stan chose to believe in some 60k odd students at any given moment because he knew positive belief would create success and he shared that belief with us excessively to get us through our losing times when we would need it most.

Unfortunately, we can’t all have a guardian bus driver, more legend than man, encouraging us with unwavering belief at every step and turn all day, every day. That’s why it’s important for you to learn to banish all thoughts that don’t start with “I CAN AND I WILL”. You need to learn to believe in yourself, but especially when the going gets tough. There’s going to be nothing more important than learning to change your mindset to accomplish something. That’s why this personal finance tip is 1st on this list and why I won’t take nearly as much time on any other tip. This is also a life tip. You’re welcome. 

2. Don’t forget to actually make a budget

Sometimes we rush and forget even the most basic of tasks. Every month put together a budget. If you need help check out How to Budget. 

3. Your housing should account for no more than 30% of your budget spend and savings should be at least 20%.

This should be self explanatory. If you get it, move on. If not, keep reading. 

Your money after taxes need to satisfy your expenses, but should still leave you with money left over for savings and wants. Housing is a big ticket item in a budget, but that’s only one expense. Most people have loans, credit card debt, phone and internet bills, utilities, and the list goes on. If your housing costs you more than 30% of your income, eventually the other expenses will be paid from either your savings, by greatly reducing discretionary spending, or overcharging your credit card.

In the end that means you’re going to choose to save less, either consciously or unconsciously.  And once that’s exhausted you’re really going to be in trouble. You’ll be living paycheck to paycheck and any incident will leave you in financial peril. Your personal situation could be different than what I described which is why I said should not must. Ultimately you decide how much percentage wise to account for all budget items.

4. Don’t skip out on savings

This is also self-explanatory, but I’m going to stress something here. When you make the decision to not save any money, that decision becomes easier and easier to repeat. If you make it a habit to always pay yourself first, you’re going to find ways to do it. 

If you have trouble making it a habit on your own, there are a few apps out there that can help. One is Qapital. They have two methods to make saving fun and easy – goals and rules. Their “rules” can be things like round ups where purchases are round to the nearest dollar and the change goes into savings, or even things like if it rains today save $5. Another option is digit.co. Digit.co has an algorithm to determine the perfect amount for you to save based on analyzing your spending habits. While that can make it difficult to save up for big things quickly, it is super helpful if you’re struggling with saving. 

5. Put your savings in a separate account

Ideally your savings should be in a high interest savings account earning you money while it sits there just waiting for you. Online banks can offer higher interest accounts than traditional banks. Barclays and Ally are two that come to mind. Still you should also check your local credit union. An important reason for it be in a separate account is it makes it harder to spend. When you pay and save right from your checking account it’s easy to tell yourself you won’t let your account get lower than X, but it can be difficult to follow through. Having your savings in a separate account forces you to be intentional.

6. Always do your homework 

This is actually another life tip, but it is especially important when it comes to finances. Don’t assume you know everything and don’t assume everything will be easy. The devil is in the details which is why you should RESEARCH RESEARCH RESEARCH. And if after all that work you do, you still don’t understand get someone who does to help you. When you’re unprepared and there’s pressure, you’re going to more easily cave in to that pressure. Such decisions can ultimately hurt you. I’m not saying your life will be ruined – I think anything can be fixed, but there’s a difference in the levels of magnitude. Don’t turn molehills into mountains through ignorance. 

7. Check out your local credit union

Local credit unions may be able to offer you better deals than commercial banks. Look at them for things like car and home loans, savings accounts, CDs and more.  

8. Emergency savings are for emergencies

This one should be self explanatory, but people tend to classify a lot of things as emergencies. The following are good reasons to dip into an emergency fund: 

• Medical emergencies
• Funeral travel 
• Car repairs
• Essential home repairs 
• Loss of a job

Get out of the habit of always using your emergency fund to bail out of normal day to day living. If you’re using this money to do that, then you’re living beyond your means and you should go back and reread tip #2. 

9. Start with small money goals

Remember in tip #1 how great winning is? Success breeds more success. By starting with a small, achievable goal you can build the confidence and foundation needed for bigger money goals down the line. 

10. Invest after you’ve saved for emergencies

Investing after you’ve saved ensures you have already set aside money for emergencies and goals. If you decided to invest money in the hopes of a huge return to put into savings later, you will hurt yourself if it doesn’t work out. Nothing is a sure thing. There could be a recession, company turmoil, changes in attitudes or policies, etc. The last thing you should do is create a situation for yourself with nothing to fall back on. In the end it will only set you back even farther. A bird in the hand is worth two in the bush. 

When your emergency savings is in a good place, there are a few online companies that can make investing easy and successful.

Acorns, which I personally use, works by rounding your purchases to the nearest dollar and investing that extra change. You can also opt to make recurring transfers. Acorns offers both regular investment accounts and IRA (individual retirement account) accounts. They only offer their portfolio funds based on your risk tolerance, not any individual stocks. Overall, it’s very simple for those just starting out in investing. Qapital also offers something similar which if you’re already using it for a savings account makes it an easy choice.

If you’re looking for something slightly more challenging, Charles Schwab has recently come out with Slices. For a small amount you can invest in big companies (think the S&P 500) by buying fractions of shares. Stockpile is also another company that allows for fractional share buys. On top of that you can purchase stocks to gift to someone else like a nephew or niece. For more on investing check out some of my other posts.