50 Personal Finance Tips. Step into enlightenment | by Destiny S. Harris | Aug, 2022

Step into enlightenment

Photo Credit: Magda Ehlers

Keep your rent/mortgage payment 10–15% (or less) of your net income.

Avoid car payments. If you decide to take on a car payment, have the cash (in your bank account) to buy the car outright.

Keep your net worth positive — at all times.

Always have a minimum of 5 streams of income. But aim for at least 10+ streams. Never depend on one source of income. Diversify. Diversify. Diversify.

Budget daily. Keep track of your money daily. Always know what is happening when it comes to your money. Be in the know.

Stay in charge of YOUR money. Never leave the responsibility of your money up to someone else.

Pay for everything via credit card to earn money or points back on purchases, and increase your financial security.

If you can’t use a credit card responsibly, stay away from them altogether.

If you have kids, open up a retirement or investment account for them the day you get pregnant, adopt, or start prepping to have your kid. Why not set up your kid to be a millionaire before age 30?

Buy only what you truly desire. Don’t buy to impress. Don’t buy because everyone else is buying. Don’t buy to fill a void. Don’t buy things you won’t use consistently. Always buy intentionally.

Increase your income yearly. Never go a year without increasing your income. Get creative.

Repair your car instead of buying a new one.

Keep an eye on your credit score and credit health to ensure you’re the only one using it.

Until you reach financial independence, live with family, friends, roommates, etc., to save money and live below your means. But you may want to continue living with others even after reaching financial independence. Extra cash flow always feels good.

Be cautious of costly habits.

If you have an employer, max out your 401k match, and contribute the max amount per year. Find a way to live off the rest comfortably.

Spend substantially less than you earn. Always have money left over at the end of the month. Avoid living paycheck to paycheck at all costs.

Be careful who you shack up with, partner up with, or date; ensure they are money conscientious. Make sure the person you are with has a healthy relationship with money. Maintain firm financial boundaries. Do not let others divert you from your financial goals.

Don’t have kids you can’t afford.

Intake copious amounts of financial advice, but make your own decisions about which advice to follow. But the one piece of advice you should always follow is: Invest now. Invest early.

If you have debt, invest while you pay off your debt because one thing you cannot get back is time; and compound interest thrives off time.

Never cease your financial education. Read books and articles, attend seminars, listen to podcasts, and chat with financial experts. Be sure to acquire new financial knowledge consistently. When you know better, you do better. The earlier you can learn about money, the better off you will be financially.

Don’t spend money to impress people, not even yourself. What a waste this is.

Don’t live in states you can’t afford. Instead, take a vacation to the location.

Avoid student loans if you can. Aim to go to school for free, with scholarships, jobs, programs, etc.

Create a 1–2 year emergency fund. Traditional advice recommends 3–6 months, but this only buys you a little bit of time in true emergencies. Sometimes one emergency can wipe out a 6-month fund in no time.

Don’t buy furniture for your house when you first move in. Buy one or a few pieces at a time that you can afford to pay with cash. When I was a kid, I remember my neighbor’s house was unusually empty (according to American standards). She was smart, though. She slowly furnished her house as it made sense for her budget.

Don’t travel if you can only afford to with credit cards. Find deals and discounts to afford it. Never go into debt for leisure activities.

Consistently attend free financial, educational events to acquire knowledge and bounce ideas off other financially in-tune people.

Save 50% of your income.

For those who cannot save 50% of your income, ensure you have $500-$1000 leftover every month to put into savings/investments.

Don’t have kids until you can afford to raise them and invest in them fully without going into debt.

Ensure your car payment, car insurance, and car expenses add up to no more than 10% of your monthly net income.

When you travel, try to do cruises, group trips (split hotel rooms), and multiple destination style trips, so the costs are lower.

Use your credit card rewards as a second emergency fund.

Use your credit card as an emergency fund before dipping into your liquidated emergency fund.

Anything you buy from the store that you don’t use, return it or sell it. Go through your entire house, and get rid of sh*t. Remember, there are always hidden costs to accumulating things, and three of those hidden costs include your mental health, compromised mobility, and financial burden.

Buy intentionally. Buy less. Buy less frequently.

Create at least two passive income streams, as Ben Le Fort recommends. My one add: Create two passive income streams that do not require long-term work input (e.g., royalties).

Use hand-me-downs for babies, toddlers, and kids — they’re constantly growing, so why waste money?

Avoid overpriced luxurious name-brand clothing until you can afford it without hurting your soul and thinking twice about it.

Avoid prioritizing impressing others — this could save hundreds of thousands to millions of dollars over your lifetime.

Don’t buy gourmet groceries if it’s hurting your end-of-month budget.

If you’re struggling financially, don’t eat out.

When it comes to activities: get creative and search for free ones.

Ask for “cash only” for birthdays.

Use water filters instead of bottled water.

Read one personal finance article daily to increase your financial intelligence and expose yourself to various financial knowledge. You never know which article will spark a profitable financial idea that will change your life.

Stop wasting food.

“American households waste, on average, almost a third of the food they acquire, economists report. Divided among the nearly 128.6 million US households, the waste could cost the average household about $1,866 per year. This food waste has an estimated aggregate value of $240 billion annually.” — Futurity

Stick with what you know when it comes to investing (until you know enough about another specific area of investing). If you’re a techie, you’ll probably have better knowledge about what technology to invest in compared to someone in education, who has better knowledge of the educational trends.

Have at least one or more friends who are financially better off than you, financially smarter than you, and succeeding in the area of finance. They’re your ticket to financial elevation.

Christopher Lewis

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