Leaving the nest, living on your own for the first time, and embarking on your career is not easy. This is the reason why practicing good spending habits is essential since your ultimate goal is to start off on a good footing. Still anxious? Well take a deep breathe and know that everything will turn out all right.
Another thing? Here we have prepared 15 personal finance tips that will lend you a helping hand.
Let’s start off with the basics.
1. Spend less than you earn each month
This is common sense. Unless you’re a Kardashian your first two priorities should be paying for rent on time and feeding yourself. Designer bags, trendy clothes, makeup, and traveling to the Bahamas (because the rest of your friends are going) are all secondary.
2. Have a budget for everything—and don’t treat this like an exception
Yes, recent studies have shown it is frankly impossible to leave Target with just one item. But the trick to avoiding making rash decisions like, for instance, those throw pillows you purchase last week, is to have a set budget. This way, even if you do feel like treating yourself from time to time (which we all do) your investments will still be structured and less damaging to your wallet.
Take this as one of the most vital personal finance tips on our list!
3. Consider an all-cash budget
You put $239.45 on credit because you couldn’t let go of the clothes you recently found at a department store. Fast forward and—ding-dong! Hey, your rent is due. Suddenly you find yourself in a panic. You’re a little less than $300 short. ‘’Where did it go?’’ you mutter, and follow this with ”Oh, that.”
Here’s the thing: An all-cash budget literally forces you to spend less than (enter an amount) on personal expenses. Once the money is used up, that’s it, honey. This method especially comes in handy for those who struggle to discipline their credit card usage.
In the long run, you may even consider switching back over to credit once you notice an improvement in your spending habits.
4. Practice saving
Depending on your paycheck, try to make a habit where every week you set aside $50-$100. By the end of the month (saving $50) you would have already saved $200. 12 months? $2,500.
5. Avoid debt
Sometimes the trick to staying out of debt is just avoiding it all together. If you don’t have the money in your account to pay for a personal expense, consider saving that purchase for another time in the future.
If you do have the money, otherwise, pay it off as soon as possible.
6. Keep track of your financial transactions
You may have heard of the saying ‘’Put your money where your mouth is.’’ Well, in this case, we’re going to change that to ‘’Put your money where your eyes are.’’ If you don’t keep track of your expenses you are bound to either fall behind on payments or, in a seemingly worse scenario, not notice that you were recently charged $58 for gas in Las Vegas, $678.54 on a hotel check-in, and hold on a second—$689.28 for adult entertainment?
Remember: You’re not just keeping track of your money. You’re also keeping an eye on any strange activity on your account.
Consider this the second most vital of our list of personal finance tips!
7. Ask yourself the three big questions (when faced with larger purchases)
You’re standing in a thrift store and wondering if you should go ahead and purchase that vintage Art Deco lounge chair. It’s classic. It’s beautiful. But your answer to the questions ‘’Will this benefit me in one year,’’ ‘’Will this benefit me in three years,’’ and ‘’Will this still satisfy me in that third year,’’ are no, or mostly no’s, then it’s probably best if you take a picture and move on.
Practicing this not only benefits your spending habits but cluttering too!
8. Sell previous/unwanted purchases
Nothing is worse than a closet that accumulates out into your bedroom and living room. If your previously adored items could use some more loving, consider selling your belongings on sites such as Depop or eBay to earn at least some of your cash back.
9. Don’t spend too much on gifts
Of course, we all want to show our loved ones during the holiday season/celebrations that we care about them. But this doesn’t mean you have to break the bank to impress the other person.
A pro tip: For great deals check out Amazon!
. . . COUPONS. They exist for a reason. Take advantage of them and use them passionately.
Imagine the amount of money you could have saved each time you missed the $2.50 discount on those makeup wipes you love. Let’s say you purchase them 3-4 times a month. That’s roughly $10. Multiply that by 12 and now you have $120. This isn’t just a number but money that could have gone towards something else.
11. Keep track of your credit score
Do this annually. This is important because you want to make sure all information is updated and correct. Furthermore (and touching back on #3) you want to make sure your identity hasn’t been compromised.
12. Research different insurance options
Don’t always settle for the first option you see. Especially when it comes to medical, vision, casualty, and home insurance, every penny counts when suddenly faced with an unexpected financial scenario.
Especially when faced with a situation (such as a family tragedy) that provokes your emotions and mental stability, having these things already taken care of will prove itself to be a weight lifted off your shoulders at the time of.
13. Start a side hustle
With tax on the rise and minimum wage seemingly at a standstill, it’s not uncommon for individuals to depend on their side job in order to meet their rent.
Starting a blog and selling eBooks and course guides are just some of the many ways you can earn extra money!
14. Work in a job that pays what you’re worth (in the market)
Periodically check the job market for titles similar to your own. Are you being underpaid? If so, use this information wisely and ask for a raise. Money is time. Effort is time. And if both of these things are not being recognized it’s probably time to start applying.
15. Invest in programs that will help you grow professionally
If you strive to become a novelist, invest in the classics and study the greats. If you fear public speaking but recognize that having this experience will benefit you, invest in professional classes.