Here are the 20 top money tips which will change the way you think about money. From the best ways to budget to how to boost your earning potential like a pro, these snippets of financial wisdom are fresh and meant for you.
1. Create a Financial Calendar
If you don’t trust yourself to remember to pay your quarterly taxes or periodically pull a credit report, think about setting appointment reminders for these important money to-dos in the same way that you would an annual doctor’s visit or car tune-up.
2. Track Your Net Worth
Your net worth—the difference between your assets and debt—is the big-picture number that can tell you where you stand financially. Keep an eye on it, and it can help keep you apprised of the progress you’re making toward your financial goals—or warn you if you’re backsliding.
3. Set a Budget
This is the starting point for every other goal in your life. Here’s a checklist for building a knockout personal budget.
4. Allocate at Least 20% of Your Income Toward Financial Priorities
By priorities, we mean building up emergency savings, paying off debt, and padding your retirement nest egg. Seem like a big percentage? Here’s why we love this number.
5. Budget About 30% of Your Income for Lifestyle Spending
This includes movies, restaurants, and happy hours—basically, anything that doesn’t cover basic necessities. By abiding by the 30% rule, you can save and splurge at the same time.
6. Draft a Financial Vision Board
You need the motivation to start adopting better money habits, and if you craft a vision board, it can help remind you to stay on track with your financial goals.
7. Set Specific Financial Goals
Use numbers and dates, not just words, to describe what you want to accomplish with your money. How much debt do you want to pay off—and when? How much do you want to be saved, and by what date?
8. Adopt a Spending Mantra
Pick out a positive phrase that acts like a mini rule of thumb for how you spend. For example, ask yourself, “Is this [fill in a purchase here] better than Bali next year?” or “I only spend on items that are Rs. 3000 or below.”
9. Love Yourself
Sure, it may sound corny, but it works. Just like paying off all your debt by realizing that taking control of your finances as a way to value yourself.
10. Learn How to Savor
Savoring means appreciating what you have now, instead of trying to get happy by acquiring more things.
11. Get a Money Buddy
According to one study, friends with similar traits can pick up good habits from each other—and it applies to your money too! So try gathering several friends for regular money lunches, like this woman did, paying off Rs350,000 of debt in the process.
12. Evaluate Purchases by Cost Per Use
It may seem more financially responsible to buy a trendy Rs. 5000 shirt than a basic Rs. 500 shirt—but only if you ignore the quality factor! When deciding if the latest tech toy, kitchen gadget, or apparel item is worth it, factor in how many times you’ll use it or wear it. For that matter, you can even consider cost per hour for experiences!
13. Spend on Experiences, Not Things
Putting your money toward purchases like a concert or a picnic in the park—instead of spending it on pricey material objects—gives you more happiness for your buck. The research says so.
14. Shop Solo
Ever have a friend declare, “That’s so cute on you! You have to get it!” for everything you try on? Save your socializing for a walk in the park, instead of a stroll through the mall, and great shopping with serious attention.
15. Spend on the Real You—Not the Imaginary You
It’s easy to fall into the trap of buying for the person you want to be: chef, professional stylist, triathlete.
16. Start Saving ASAP
Not next week. Not when you get a raise. Not next year. Today. Because the money you put in your retirement fund now will have more time to grow through the power of compound growth.
17. Get More Life Insurance on Top of Your Company’s Policy
That’s because the basic policy from your employer is often far too little. Not convinced? Read how extra life insurance saved one family.
18. Make Savings Part of Your Monthly Budget
If you wait to put money aside for when you consistently have enough of a cash cushion available at the end of the month, you’ll never have money to put aside! Instead, bake monthly savings into your budget now. Read more on this and other big savings mistakes —and how to fix them.
19. You Can Have Too Much Savings
It’s rare but possible. If you have more than six months’ savings in your emergency account (nine months if you’re self-employed), and you have enough socked away for your short-term financial goals, then start thinking about investing.
20. Rebalance Your Portfolio Once a Year
We’re not advocates of playing the market, but you need to take a look at your brokerage account every once in a while to make sure that your investment allocations still match your greater investing goals. Here’s how to rebalance.