When it comes to financial matters, there are all kinds of advice out there, some great and some truly awful. We love getting good financial advice, but bad advice is pretty much a nightmare!
We’ve compiled a list of some of the very best. Hopefully, it will help you make good decisions and chart a path to financial stability and comfort!
Money Can’t Buy Happiness, but Happiness Doesn’t Buy Anything
This doesn’t mean happiness isn’t important, but you have to remember that money is a big part of life. It may not buy happiness, but it pays bills, and you need to manage it properly.
Create a Rainy Day Fund
Also called an emergency fund, a rainy day fund is money you set aside for unexpected expenses. At best, it’ll sit there and earn interest, but when you need it, that money can help you avoid wrecking your budget.
Make a Budget
One of the best ways to manage money is to keep track of what’s coming in and what’s going out. This also helps you avoid wasteful spending that might interfere with paying your bills on time and in full.
Don’t Spend More Than You Earn
Although this seems obvious, a lot of people struggle with this. One of the easiest ways to fall into this is by using credit cards since the bill comes later. Don’t do this. Make sure you know how much you have to spend before putting it on the credit card. Live within your means!
Don’t Spend More Just Because You Make More
If you get a raise, that doesn’t mean you should increase your spending accordingly. Doing that actually nullifies your raise, and you really aren’t earning more than you did before.
Cut Impulse Spending and Unnecessary Spending
Avoid the temptation of buying things that catch your eye and that you don’t need. Also, do you have to get Starbucks or go out for lunch with coworkers every day?
Pay Off Debts
Debt is a burden that looms over people and can interfere with their long-term financial goals. Some debts are unavoidable, but when you incur debts, try to pay them off as quickly as you can. You’ll also pay less interest that way.
Avoid Paying Interest
Pay off your credit card balance in full every month. Carrying balances over means you incur interest, which some people liken to stealing from yourself.
Use Cash Whenever Possible
There’s the saying that money burns a hole in some people’s pockets, but for some, there’s an opposite effect. Since cash is tangible, you know what it looks like to see it go away, and that can make you reconsider your spending decisions. Cash also helps you not overspend with credit cards.
If You Can’t Buy It Twice, Don’t Buy It at All
This is a way of saying not to buy things you can’t afford. If buying something is going to leave you broke, you shouldn’t buy it at all.
Don’t Attract Attention From the IRS
Being investigated or audited by the IRS is one of the most unpleasant experiences there is, and it can be costly or even lead to jail time. File your taxes on time, don’t cheat on them, and don’t claim questionable deductions and write-offs.
Don’t Break the Law
Here’s another one that should be obvious, but it’s worth repeating. Lawyer costs, court fees and fines, and prison all can be financially disastrous. Even speeding tickets can run several hundred dollars and cause your auto insurance rates to go up.
When the Housing Market Crashes, Buy Stock in Ford
This one might sound odd, but it’s rooted in the fact that Ford vehicles have a huge presence in the construction industry. If the housing market crashes, the stock will likely drop, and that’s the time to buy it. When the market eventually booms again, you’ll make a big profit.
Avoid Buying Designer Clothing
Designer clothing may look great, but it costs a lot of money. It also doesn’t last or perform any better than most other brands, but you pay a lot more for it.
Shop for Quality and Value
At the same time, don’t just buy what’s cheapest. For example, cheaply made products usually wear out quickly, and replacing them may end up costing you more in the long run.
Buy Used Cars
It’s nice to drive away in a vehicle no one else has ever owned, but that car depreciates in value by thousands the moment you do. You’ll get better value from a late-model used car that’s in good condition.
Buy Cars That Suit Your Needs
Also, don’t buy cars at the upper end of what you can afford. Buy reliable cars that meet your needs. Remember that cars are basically tools, not lifestyle statements.
Look for Discounts and Sales
You’re never too wealthy to not appreciate getting good bargains on what you buy. The savings really add up and can go towards other things, like a retirement or vacation fund.
Invest in a Retirement Plan
Open a retirement account and make regular contributions to it. If your employer offers a 401k plan, take it and have a part of your income automatically added with each paycheck. Many of these plans include employer matches.
Use Automated Payments
As much as possible, set up your regular payments to go off automatically each month. That helps you manage your budget, and you’ll also avoid penalties from forgetting to make a payment on time.
