12 Solid Personal Finance Tips to Live By

Published by Maku Seun on

Introduction

Every little personal finance tip can help make your finances better. That’s why I have curated this list of personal finance tips to live by for you to handle your personal finance better.

Although making resolutions to improve your financial situation is a good thing to do at any time of year, many people find it easier at the beginning of a new year. Regardless of the time you begin, the basics remain the same.

12 personal finance tips to live by

1. Invest your money

If you’re contributing to a retirement plan and a savings account and you can still manage to put some money into other investments, all the better.

Investing is one of the best ways to increase your net worth, but a lot of people stay away from it because they’re scared of losing money. So instead of investing, they keep their money in a savings account.

That’s great, and you should have some money in a savings account for emergencies, but the truth is:

Money in a savings account loses value over time.

See, the average savings account has a very tiny 0.06% APY (annual percentage yield), while inflation is around 1.7%.

That means that each year, the money you have in a savings account is going to have less and less buying power.

So, what can you invest in to stay ahead of inflation? Here are some options:

  • Real estate
  • Government bonds
  • Mutual funds
  • Stocks

2. Save at least 10 percent of your income

This is important if you want to have financial freedom and have peace of mind also.

This is equivalent to paying yourself first and having an emergency fund.

This money stays in your savings account gathering dust for rainy days.

3. Start a side business

Are you happy with the amount of money you’re taking home each year? If you’re like most of us, a little bit of extra cash each month could go a long way.

So, why not start a side hustle to supplement your income?

Don’t worry. You don’t have to sacrifice all of your free time to start a successful side business.

One of the big advantages of side hustling is that you can do it when you want and as much (or as little) as you want.

The best advice I can give you is to start. 

Use any extra time you can find and make a little bit of progress every day. Soon you’ll be addicted to the side hustle lifestyle.

So, how much money can you really make with a side hustle?

Well, that’s the other awesome thing about side hustling, the income is virtually limitless.

Since you’re not getting paid by the hour or a set salary, it’s really up to you to decide how much you want to earn.

The more you feed your side hustle, the more it grows.

4. Have more than one stream of income

This works hand-in-hand with starting a side business.

Because a side business will bring in some extra cash on the side, plus your salary, now you have two income streams incase something happens at your day job, you will have something to lean on.

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If you are as restless and ambitious like I am, two income streams won’t be enough for you.

You can start another income stream as soon as your second income stream starts fetching you real and consistent money.

The average millionaire have at least 7 streams of income which includes investments, stocks, bonds, real estate, their own businesses etc.

Let 7 streams of income be your minimum goal and you will soon have so much money you won’t know what to do with it.

5. Know who you are lending money to

Be careful who you lend money to.

If you can’t do without getting that money back, it is better not to.

Unless you can let the money go.

One more tip: Try not to lend money to friends.

Because if they can’t pay you back your relationship will be strained.

I only lend money to friends when I know I can let the money go so when they don’t pay back, I can let it go and it wouldn’t strain the relationship.

Also, try not to borrow money from friends.

6. What kind of partner do you have?

A spendthrift partner will hurt your finances no matter how tightly fisted you are.

This financial tip doesn’t just apply to married couples. Money fights can affect any relationship, like I have mentioned above.

The best way to avoid fighting about money with your significant other is to talk to them about it. 

Remember that you’re a team! 

You should be talking to each other about your financial goals, and you should set a date once a month to go over your finances together.

The bottom line?

Don’t let money ruin a great relationship.

7. Always budget

An important step to consider when trying to get ahead financially is budgeting.

After all, how can you know where your money is going if you don’t budget?

How can you set spending and saving goals if you don’t know where your money is going?

You need to set up a budget whether you make thousands or hundreds of thousands of dollars a year.

8. Change your money attitude

Many people have negative attitudes about money.

They say money is not everything and then they have sleepless nights worrying about money.

You have to know that money is a good thing and that it answereth all things.

Money won’t make you a bad person.

Instead it will give you many options in life and allow you help other people.

9. Get out of debt NOW!

Get out of debt today. Unless it is a good debt. Try to get your debt under control.

What is the difference between a good and bad debt?

Debt can cause you sleepless nights.

Debt means you owe someone money, and if I’ve learned anything from gangster movies, you NEVER want to owe someone money.

However, not all debt is necessarily bad debt.

So, what is bad debt?

Bad debt is any debt that’s acquired through purchasing something that’s going to lose value and generate zero revenue.

Once you’re out of debt, make it a commitment to stay out of debt (this is especially important if you’re a spender).

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You can’t do anything about the debt you got into in the past, but you can avoid getting into more debt in the future.

10. Spend less than you earn

It’s easy to KNOW that you should be spending less than you earn, it’s a lot harder to actually do it.

However, if you want to escape the paycheck-to-paycheck lifestyle that so many others live, you need to spend less than you earn. 

This is one of the most crucial but basic personal finance tips ever.

Practice wanting less.

This will give you inner contentment because you won’t always be looking at what someone else has and wanting something you don’t need.

Wanting less leaves you more fulfilled and happier with your own life.

11. Have financial goals

Very important.

Because if you don’t know where you are going, how will you know when you get there?

If you want to accomplish financial goals, you need to figure out what goals are important to you first.

Having a clear goal can keep you motivated and help you come up with a plan to reach that goal even faster.

Now, don’t think that you need to set outrageous goals.

If this is your first time thinking about personal financial goals, start off small and work your way up from there.

I’d suggest coming up with a few different goals in each of these categories:

  • What you want to achieve in the next 3-months
  • In the next year
  • In the next five years

This way you’ll have some short-term goals to look forward too, and some long-term goals to work towards as well.

Your short-term goals may even be small stepping stones towards your bigger goals.

12. Read books about finances

Educate yourself about personal finance.

This is what the greats do.

Below are some really good personal finance books and tools that will help you out:

The Richest Man in Babylon 1926 Edition

The Compound Effect by Darren Hardy

Total Money Makeover by Dave Ramsey

I Will Teach You to Be Rich by Ramit Sethi

Master Your Money (Super Bundle)

Are you in debt? Get free debt consultation and find a solution to your debt

Unshakable: Your financial freedom blueprint

Tools to make money in tough economic times

Financial Turnaround.

Conclusion

There you have it, the personal finance tips to live by laid out for you in 12 simple points. Now I’ve got a question for you:

Did you learn anything new from these personal finance tips to live by? 

If you did:

Take action. Start working on improving your finances today, not tomorrow.

It’s easy to read these tips and think, “Oh, I can calculate my net worth tomorrow” or “Ehh, I’ll set up that auto-deposit next month.”

But if you say that stuff, you’re just coming up with excuses. Take action today, and you’ll be one step closer towards financial success.

Finally, I want to hear from you:

What’s one personal finance tip you wish someone had told you earlier? 

Categories: Money Saving Tips

Maku Seun

Maku Seun is a blogger, an entrepreneur and author of Charge Your Life currently on Amazon. He has started various online businesses and is well experienced in saving and managing his money. Follow to get more money saving tips.

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