50 Ways to Be Smarter With Your Money While You’re Still young!
The personal finance habits you develop when you’re young will determine the standard of living you enjoy (or regret) when you’re older. Take it from me, adding just a couple of these to your financial routine can make a big difference at the end of the year when you look at your bank statements.
How many of these 50 ways to be smarter with your money do you commit to (most admit to less than half):
1.Maintain only two forms of debt: Mortgage and (minimal) car payment.
2.Donate your time, not your money. Getting involved is far more valuable to yourself and the organization.
3.Don’t panic when good investments go down. Investing should not be based on emotion, stick with your strategies.
4.Avoid any fees – they take from principal and reduce compounding.
5.Get your spouse involved in family finances – it’s better for your marriage and for future financial decisions.
6.Owning is cheaper than renting.
7.Have a 3 month cash reserve for unexpected emergencies.
8.Save up for your big purchases, don’t put them on credit – helps determine what you need/want and what was just an impulse buy.
9.Lend family members your time and expertise, not your money – sorry.
10.Max out company matching/contribution to 401(k).
11.Own as few investments as possible. Know the details of what you own – anything over 10 is too many.
12.Avoid school loans. If you must, calculate the potential return on your school loan investment – is it worth it?
13.Pay your 30 year mortgage off in 15 years by paying extra principal per month.
14.Never burn a bridge, ever.
15.Don’t become “Cash Poor” by over extending your monthly payments (housing, credit card, transportation).
16.Always have health insurance. Utilize COBRA if you have to keep it from lapsing.
17.Avoid extended warranties – they’re a scam.
18.Surround yourself with great people – great financial opportunities will arise from them.
19.Keep your equity in your house – don’t pull it out.
20.Do your own taxes.
21.Automatic deposits into savings account – $100 per check adds up quickly.
22.Max out Personal Injury Protection under your auto coverage.
23.Spend less than you make – the golden rule.
24.Invest in your health. Spending on nutrition and exercise will pay off in the long run.
25.Take career risks – follow your passions. You’re smart enough to switch careers.
26.Get an early start to the day – all successful people do.
27.Maintain a proper asset allocation of stocks and bonds.
28.Add a new professional certification/license every 5 years.
29.Only invest in mutual funds when you’re willing to pay for the expertise. An ETF Index fund may be a lot cheaper.
30.Pursue bankruptcy if you have to.
31.Track your investments’ performance – this helps to keep you stay engaged and informed.
32.Eliminate credit card debt – transfer balances to lower rates if you have to, then pay it off.
33.Own a term life insurance policy for you and your spouse.
34.Become an expert in your industry.
35.Check your credit report once a year. It’s free.
36.Live a minimalistic lifestyle. Spend your money on experiences and personal growth not on material possessions.
37.Finalize an estate plan – don’t burden your heirs with higher costs and confusion.
38.Eventually purchase an umbrella insurance policy – it covers any holes in your health or auto coverage.
39.Set out specific retirement goals. What’s your magic number to be able to retire…how are you going to get there?
40.Own your car for 7 years – it’s years 5, 6 and 7 that you “make money”.
41.Buy generic products when you can – they’re usually made by the brand name manufacturers!
42.If self-employed, open/contribute to an Individual 401(k) – it can decrease your taxable income.
43.Work toward a passive income stream. Could be dividend paying investments or an internet business, passive income is a great retirement strategy.
44.Know the professionals who work for you – accountant, lawyer and investment adviser.
45.Max out company matching of stock purchase program.
46.Invest in a moderate allocation – don’t over risk your retirement account.
47.Consider short selling your house if you’re 50% or more underwater – do the math, chances are you won’t break even in this lifetime.
48.Pay your bills on time – it boosts your credit.
49.Contribute to a Roth IRA – gains grow tax free!
50.Never give up – you’re never too old to right your finances!