102 Personal Finance Tips for 2019

102 Personal Finance Tips for 2019

Budgeting

personal finance budget tips

First thing is first when it comes to money and your personal finances – 80% of self made millionaires have a budget. So the #1 personal finance tip in the world is to start with a budget.

1. Have a Budget

Enough cannot be said about having a general working budget. Predicting life’s expenses is half the battle to staying ahead with regards to your finances. Make sure you factor every expense that can occur within a year and be sure to always be conservative with

2. Use Budget Apps & Calculators.

Don’t like spreadsheets? Budgeting apps like Mint, Personal Capital, and budgeting calculators can help you accurately predict, track and forecast spending. Roughly 6 in 10 households do not operate on a budget. Use budget tracking to manage and stay on top of finances.

3. Have Budget Meetings.

If you are in a relationship, consider having monthly meetings to discuss budgets and finances. Where did things go well, what can you adjust, and what are your goals for the next few months? No significant other, see about finding a trusted mentor or family member to discuss with. This will not only hold you accountable but create awareness about where your money goes each month.

4. Adjust Your Budget as Needed.

Make adjustments to your budget. As you track your spending habits and as bills decrease/increase you will want to adjust your budget. Overtime figure out how you can increase savings and decrease high spending areas.

5. Backwards Budgeting.

Want a new car? Need to create an emergency fund, vacation fund, or budgeting for a kids college? Use backwards budgeting. Just like it sounds, start with the end goal and work backwards. For example, if your goal is to save $3,000 in the next 6 months, that would mean each month you must contribute $500 per month. If you are paid bi-weekly, that would mean you contribute $250 per check. Use auto saving apps like Qoins or Acorns to help automatically do it for you!

Cars

personal finance car tips

When it comes to personal finance tips pertaining to cars, remember the purpose of a car – to get from point A to point B. Transportation costs are just behind housing costs as the biggest expenses for most Americans. Check out these car tips:

6. Car Maintenance.

Prior to ever buying a car factor maintenance costs.

Tires, brakes, oil changes, premium or regular fuel, and so on can all add up. Buying luxurious cars will cost more maintenance annually.  According to Your Mechanic, over a 10 year span a BMW will cost the average person $17,800 in maintenance, whereas a Honda owner should expect to spend just $7,2000.

7. Lease vs Own.

Is it better to own or should you rent lease a car? A car on lease can be a great asset if your a business owner with a fleet of vehicles, however leasing is not ideal for the everyday person. Essentially the word lease is code for “rent.” At the end of the term if you decide to give it back you have no equity in your car some lease terms can be quite binding.

In most cases, owning a car is the way to go. While car is considered a depreciating asset, owning is the best of option. Consider buying 2-3 years used and certified pre-owned. See #10 below.

8. Gas Hacks.

This goes without saying, but have a gas credit card that gives you cash back at the pump. Use it only for gas and on average you should accrue enough cash back to get a free tank every 2-3 months. Check out apps like Get Upside that allow you to double down and create more cash back when purchasing at the pump.

9. 50% Net Income Car Purchasing Rule.

As a general rule of thumb, never purchase a car that’s price tag is above 50% of your annual net income. This will help you decide what you can and cannot afford, no matter what the salesman tells you. For example, if your annual take home pay is $40,000 a year, you should never purchase a car with a price tag over $20,000.

10. Never by brand new.

General finance talk says buy 2 years certified pre owned cars. Paying for a brand new car will cost 40% more then buying two years used. In fact, a brand new car will drop on average 11% just driving it off the lot.

 

11. Pay Extra on Your Car.

Common wisdom says, “Well the interest on my car loan is only 2-6%, so it isn’t that bad.” Yes, true, but at the same time transportation accounts for more then ⅓ of most adult’s budget. Eliminating a car payment by paying extra, thus attacking the principal can free up cash to use in other places – savings, investing, student loans. Etc.

Credit Cards

personal finance credit card tips

Personal finance tip when it comes to credit cards: Have discipline and awareness of spending. Plastic typically leads to 12-18% more spending.

See also, My 1st Credit Card Mistakes

12. Asset Only Credit Card Use.

This is a concept, not a credit card. Essentially, only uses credit cards for regular spending – not frivolous or careless spending. Use credit cards for necessary things like gas and groceries and then reap the rewards.  Make sure you practice financial discipline and pay them off each month. Consider having a grocery card, a gas card, a travel card, as long as you have the financial discipline to pay them off monthly.

Note: If you have consumer debt skip these and go right to #16 “Cut Your Credit Cards Up.”

13. Miles Rewards Cards.

Use credit cards that give you miles in return for spending. Then flip the miles for family vacations and travel. Similar to asset only credit card use, here are some great miles rewards cards.