Oct 17, 20224 min read

Personal Finance Tips To Live By

Personal Finance Tips To Live By

Learn self-control

Control your financial future

Know where your money goes

Start an emergency fund

Get an understanding of taxes

Take control of your health

Learn how to protect your wealth

By now we know personal finance is not a required subject in a lot of schools. With that being the case, a lot of adults lack basic financial education and it ends up leaving them clueless about how to manage their money, how to earn money, how to leverage money, when & how to apply for credit, and how to get or stay out of debt.

To help you gain clarity, I will list off a few things *not listed in any specific order* that will help you find some sort of direction in all of this.

1. Learn self-control Self-control, discipline… if you’re lucky, your parents developed this skill with you when you were a kid. If not, developing the habit may be easier said than done, but it isn’t impossible. Keep in mind that the sooner you adapt the necessary perspective and understand the reason why you are learning to control yourself and your finances, the sooner you’ll be fluent in managing and growing your wealth.

2. Control your financial future If you don’t learn to manage your own money, other people may find ways to (mis)manage it for you. Some of these people may be ill-intentioned, like immoral commission-based financial planners & advisors. Others may mean well, but may not know what they’re doing, like mom, dad, sister, uncle, granny, or cousin. Instead of going to others for advice, take control and tap into credible financial educators on YouTube & other social media platforms along with reading a few basic books on personal finance.

Check out our Personal Finance For Beginners eBook!

3. Know where your money goes Once you’ve gone through a few personal finance books, you’ll realize how important it is to make sure your expenses don’t exceed your income. The best way to do this is by budgeting. I know budgeting isn’t always fun, but it can definitely improve the quality of your life.

Once you see how your morning coffee or fountain drink adds up over the course of a month, you’ll realize that making small, manageable changes in your everyday expenses can have just as big of an impact on your financial situation as getting a raise.

In addition, keeping your recurring monthly expenses as low as possible will also save you a nice amount of money over time.

4. Start an emergency fund One of the personal finance’s top rules is “pay yourself first.” No matter how much you owe in student loans or other forms of debt, and no matter how low your income may seem, it’s wise to find some amount—any amount—of money in your budget to save in an emergency fund every month. I started with $5, although I am not necessarily recommending you do that.

Having money in a saving account to use for emergencies can really keep you out of trouble financially and help you sleep better at night. Also, if you get into the habit of saving money and treating it as a non-negotiable monthly “expense,” pretty soon you’ll have more than just emergency money saved up: you’ll have retirement money, vacation money, investment money, and even PLAY MONEY.

Don’t just tuck this money away under your mattress, instead maybe put it in a high-interest online savings account, a certificate of deposit, or a money market account. Otherwise, inflation will erode the value of your savings.

5. Get an understanding of taxes Understanding how income taxes work even before you get your first paycheck is important. When a company offers you a starting salary, you need to know how to calculate whether that salary will give you enough money after taxes to meet your financial goals and obligations.

Fortunately, there are plenty of online calculators that have taken the work out of determining your own payroll taxes, these calculators will show you your gross pay, how much goes to taxes, and how much you’ll be left with, which is also known as net, or take-home pay.

6. Guard your health If paying monthly health insurance seems impossible, what will you do if you have to go to the emergency room, where a single visit for a minor injury can cost thousands of dollars? If you’re uninsured, don’t wait another day to apply for health insurance; sht happens.

Also, by taking daily steps to keep yourself healthy, like taking multivitamins, eating fruits and vegetables, maintaining a healthy weight, exercising, not consuming alcohol in excess, and even driving defensively, you’ll thank yourself down the road when you aren’t paying crazy medical bills. Life is already expensive enough.

7. Protect your wealth If you want to make sure that all of your hard earned money doesn’t vanish, you’ll need to take steps to protect it. If you rent, get renter’s insurance to protect the contents of your place from things like burglary or fire. Disability income insurance protects your greatest asset—the ability to earn an income—by providing you with a steady income if you ever become unable to work for an extended period of time due to illness or injury.

If you want help managing your money, find a fee-only financial planner to provide unbiased advice that’s in your best interest, rather than a commission-based financial advisor, who earns money when you sign up with the investments his or her company backs.

You’ll also want to protect your money from taxes, which you have a few vehicles to do that with, like a retirement account, as well as inflation, which you can combat by making sure that all of your money is earning interest through vehicles like high-interest savings accounts, money market funds, CDs, stocks, bonds, and mutual funds.

So basically...

Just know, you don’t need any fancy degrees or unique backgrounds to become an expert at managing your finances. If you use these few financial rules and tips for your life, you can be prosperous.