Are you looking for the best personal finance tips? If so, then you are in the right place!
The world of personal finance can be a scary place. It seems that with every passing day there is another fresh set of tax rules, bank fees, or sneaky insurance adjustments.
Many young adults have a tendency to resist these forms of knowledge because they seem so complicated, but if you ignore them you could find yourself in a lot of trouble.
The first step to improving your finances should be education, and we’re here to give you the resources you need to get started.
Best Finance Tips For Every Young Adult
These 15 tips are a great place to start, and if you follow all of them you should be well on your way to a more financially stable future.
1. Make A Budget And Track Your Spending.
A budget is the best way to gain control of your money. The trick is to make a budget that works for you, and track your spending so you always know where you stand.
A good way to do this is by creating a “zero-based” budget. This means every dollar needs a designated purpose before it can be spent. If you simply can’t spare $5 for dry cleaning, then you won’t be tempted to use it on that $4 pack of gum.
2. Pay Yourself First.
Above all else, pay yourself first! If you receive a paycheck take 10-15% off the top and save it for later. This will ensure you build up your savings enough so that when things get tough (and they always do) you have a cash cushion to fall back on.
3. Cut Your Expenses.
Don’t be wasteful with your money! There are lots of little things we spend money on every day that aren’t necessities – eating out, Starbucks coffee, and designer clothes to name a few.
Cutting these expenses would save an average person over $1000 annually, which could go towards paying down debt, building savings, or even helping you to get ahead of the game with your retirement planning.
4. Use A Rewards Credit Card.
Every time you spend money, take out your rewards credit card and get rewarded for it! Reward cards offer cashback incentives on things like groceries, gasoline, and department store purchases, and most carry no annual fee. 5. Refinance Your Debt
If you’re paying 18% on your student loans, 15% on credit cards, and 8% on a car loan then it’s time to refinance!
Most large financial institutions now offer low-rate mortgage options that can help save thousands in interest payments. If refinancing isn’t an option, or you have no debt, start building credit by getting a prepaid credit card.
6. Don’t Be Afraid To Negotiate.
Most people are afraid of negotiating because they don’t want to offend the person on the other line of the conversation. This is silly!
Everyone wants to save money, so if you simply ask for a lower price and explain why you can’t pay more then you will be surprised at how many people will accommodate your request.
7. Get A Roommate or Two.
It’s getting tougher and tougher to afford a place to live these days, but if you’re willing to share a living space it might be an option for you.
If even that’s out of the question, find a nice roommate and split the rent in half. It could be one of the easiest and most effective ways to save money each month.
8. Buy Used And Save A Bundle!
One man’s trash is another man’s treasure, so don’t hesitate to buy used ones! You can save thousands per year by purchasing used products over brand-new ones, and the best part is that these items are often in great condition.
9. Turn Your Hobby Into A Business.
If you have a hobby or passion, turn it into a business! There are lots of ways to make money with hobbies, but one of the simplest ways is through an online blog. If your blog is successful you might even earn enough to quit your day job.
10. Invest Your Money Wisely.
Piggybacking off the last point, if you have extra money lying around it is time to invest. If done right, investing can help you grow your money exponentially. This will not only improve your financial situation, but it will make you wealthy in the long run.
11. Get Rid Of Unneeded Expenses.
Do you really need that car payment, cable bill, and gym membership? Chances are the answer is no, but if you get rid of these expenses then not only can you save hundreds each month, but you’ll have more money to put towards your savings or debt.
12. Use An Online Bank Account For Extra Savings.
If you routinely find yourself having more money than you know what to do with, then it’s time to up the ante!
There are lots of great online banks that offer 2% interest rates on savings accounts, which is better than your typical brick-and-mortar bank. You can also save money by using an online bank that doesn’t charge fees for things like monthly maintenance and minimum account balances.
13. Shop Around For Insurance Rates.
Are you paying too much for insurance? If your answer is yes, then it’s time to shop around! It’s not uncommon to save hundreds on car, home, and life insurance just by switching companies.
Oftentimes it’s simply a matter of calling up your current insurer and asking for a lower rate.
14. Review Your Insurance Coverage Once A Year.
Have you reviewed your auto, home, health, and life insurance coverage in the last year? If not, then there might be areas where you could stand to save.
For example, if you’re paying for earthquake coverage when your home is nowhere near an earthquake zone, then you might be overpaying. It never hurts to review insurance policies annually in order to make sure that you’re not wasting money on unnecessary coverage.
15. Eat Out Less Often.
Eating out at restaurants is much more expensive than eating an easy, homemade meal. If you can cut back on eating out then you can save hundreds each month by not purchasing dinner or lunch at restaurants.
This might be tough to do if you’re currently living with roommates that don’t cook, but it’s certainly doable even though this might mean bringing lunch to work every day.
The Bottom Line
So there you have it – 15 personal finance tips every young adult should live by. If you follow these simple guidelines then it will be much easier to live within your means and successfully manage your money. So what are you waiting for?
If you want to learn how to budget effectively, then check out this great article here!