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Finance Tips & Financial Life Hacks that Everyone Should Know
Navigating through life can be frustrating at times. Especially when it comes to managing money. Not many of us were exposed to sound money management advice while we were growing up.
Actually, recent annual studies have consistently shown that most Americans are financially illiterate! So there’s a high chance that you are either a financial dud…and you know it. Or you’re overconfident with regards to your money management skills. Either way, your pocket is guaranteed to feel the burn!
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Fact: Most Persons Lack Basic Finance Knowledge!
Even if we did get financial tips from parents or older heads, the world is very different now. Many of those persons just preached what worked for them, a million years ago. It just doesn’t apply anymore!
Hey, even if you were one of the few that were lucky enough to be exposed to legitimate money management tips, or took a class 20+ years ago, you were probably not mature enough to appreciate it back then anyway.
Unfortunately, experience is the best teacher. Learning and recovering from mistakes can educate you in ways you never thought possible.
Fortunately though… It doesn’t always need to be your personal mishaps and mess ups that you learn from. Learning from the life lessons of others can be just as beneficial. Pair this with some established financial life hacks, and you’re golden!
It’s never too late to steer your life in the direction that you want. Let’s touch on some rock solid money management advice that everyone should know and implement, in order to make the most of your money. And get the best out of your financial life!
It’s time you shift your life away from merely surviving and into thriving! Let’s go!
Money Management Advice: 15 Tips for a Happy & Secure Life
Regardless of your age, background or financial status, these are the tips to ensure that you make the most of your money and live up to your full financial potential:
1. Create a Budget Plan
A budget plan is simply a plan on how you intend to utilize your money. It prevents financial mismanagement and wastage. And ensures that you are always in control of your money and stay on track with your financial goals.
When creating a budget plan, you firstly figure out exactly how much money you made over a period of time. You then allocate what amounts are to be spent, and what they are to be spent on. Savings, investments and other financial initiatives are also factored in.
The actual percentages that you allocate to the various sections of your budget plan, varies from person to person. And depends on your income and specific goals.
You can learn how it works and get the full details on How to Make a Budget Plan, here!
Expert Financial Tips for Your Budget Plan
When it comes to establishing and working with an efficient and accurate budget plan, it is important that you:
1.1. Stick to Your Budget
This may sound obvious but it’s human nature to try to bend rules and “beat the system”. It may start with simply buying some extra takeout one week, and planning to cut back on the other week’s food budget to compensate. This is asking for trouble.
Chances are that the next week would come around and the cycle would continue. You’d be continuously cutting into the budget of subsequent weeks, never getting back on track… Instead digging yourself into a deeper hole. Stick to your budget!
1.2. Live Within Your Means
If you can’t afford something, or it doesn’t fit into your budget, don’t spend on it! Don’t be bothered or tempted by the possessions and lifestyles of others!
1.3. Save First, Spend Later
Save money and once you can afford an item, without putting yourself in a financial predicament, you may proceed. This ensures that you pay for luxury products and services, or “wants”, with cash not credit.
1.4. Account for Every Dollar
Every dollar that you make, from every avenue, must be accounted for. Your 9-5, plus side hustle #1, side hustle #2, the gift card you received, your tax refund that just hit your bank account… All of it!
Whether it is directed towards an expense, your savings account or investment portfolio, every dollar must have a place.
Similarly, every expense must be counted. Those random coffees and muffins can add up. Be sure that they are accounted for. Even it’s from an assigned “Miscellaneous Expenses Section”. Ensure that it’s coming from somewhere and recorded.
1.5. Use Cash to Stay on Track
Swiping your card or using other electronic forms of payment is an easy way to lose track of spending and risk falling off your budget. Instead, assign monetary amounts to your various expenses and withdraw the cash associated.
As long as payment by cash is possible, pay with cash. This method works wonders when trying to stay on budget.
Check out the Cash Envelope System for all the details!
1.6. Differentiate Wants from Needs
Adequate food and shelter are needs. A vacation to a 5-star resort is not. Clothing is a need. New designer clothing and jewelry is not. Understand what you need and manage your “wants”.
1.7. Budget Based on Confirmed Income
Income that you “may receive soon” should not be considered in your budget plan. Only when it hits your hands or your bank account, then you may assign it to an expense.
You do not want to end up in a bind with expenses that you cannot cover, because of funds being delayed for whatever reason.
1.8. Be Happy with Your Budget Plan
Your budget will never work, or you’d never be able to enjoy life, if you are dissatisfied with your budget plan. Appreciate sacrifices, while treating yourself from time to time.
Your budget must be practical and you must consider your mental health. Even if you set an aggressive budget, with saving money as your number one priority, balance is key!
1.9. Your Budget Plan Needs to Suit You
Your budget plan needs to be YOUR budget plan! What works for Peter may not work for Paul. Your income, lifestyle and goals could never be identical to someone else.
While it is fine to take pattern from established budget plans or the model that other people use, ensure that you ultimately customize something that fully suits your specific needs.
2. Make as Much Money as You Can
It goes without saying that you need to work and you need to make money. Bills aren’t gonna pay themselves and financial goals are not going to materialize magically. You need a steady baseline hustle or “job” as society prefers to call it. And you need at least one side hustle!
Here’s the money making breakdown:
2.1. Have a Steady Main Income
A steady job or running a routine business adds a certain level of stability to your life. While you side hustle for supplemental income or work on figuring out your next multi-million dollar endeavor, your main job keeps a certain portion of your financial obligations covered.
It offers a “worst case scenario” buffer, which is great for your mental health.
Get a steady job, run a business, or build a career in a field that you are interested in. Whether it requires a college degree or not, whether it’s a 9-5, a brick and mortar or online business, a corporate career, a shift job, a trade job, a fly in / fly out, a short term rotation… whatever you are comfortable with.
Even if it’s steady consulting or freelancing work. That’s a business! Just put in the work and get paid.
The truth is, even if you hate your job, just love getting paid. At least until you figure out a better option. As long as it pays well enough, do it with a smile, get paid and get out. Get out and get to your SIDE HUSTLES!
2.2. Side Hustle
There are no two ways about it: a single job just doesn’t cut it anymore. Gone are those days! Even if your main job pays a fortune, and you can afford all your life expenses. In an ever changing world and volatile economy, it’s just too risky to depend on a solitary income!
There must be something that you can do to make money on the side. This is a must! Whether it’s an in-person gig or something online… Having a side hustle brings a ridiculously good sense of comfort to your life.
Looking for ideas for a side hustle? Check out these High Paying and Easy to Start Money Making Ideas!
2.3. Diversify Your Income
It’s tough to predict what changes are about to take place in the world, and their implications. Having a few income streams, spread across a few different industries, is the way to go. This offers a safety net in the event of major changes or sudden collapses.
Your time, money and energy are investments. And you need to protect your investments as much as possible.
Think about this: It’s the early 2000s and you work at Blockbuster Video. Your boss’s business is booming so you start a side hustle buying and selling videotapes and DVDs. Your side hustle is now booming. You invest all your extra money in Blockbuster stock.
A few years later, it all comes crashing down and you’re financially dead in the water! It’s now gonna take years for you to recover! This is exactly what not to do!
I’m sure the guy who worked a 9-5 at Blockbuster and then detailed cars on evenings, or coached little league baseball, while hustling as a landscaper on weekends bounced back just fine when they went under.
Change is inevitable. Think big, but think broad as well! Spread yourself! Diversify!
2.4. Set Up a Passive Income Stream
Figure out a way to make money while you sleep. This takes your financial game to a whole other level! Content creation, blogging, vlogging and other influencer activities, are great options these days.
Car rentals and Airbnb rentals are tried and trusted passive income options as well. Or you can start smaller by renting a room, parking space or storage space. Or even just by renting stuff such as tools, sporting equipment, electronics, etc.
Passive money is easy money. And we all love easy money!
2.5. Enjoy Making Money
Enjoy strategizing and earning money. Get a kick out of seeing your bank account grow. It’s actually extremely fulfilling and takes the monotony out of life. Not to mention, you feel proud knowing that you are building a better future for you and your family.
3. Save Money
No matter how much money you make, if you don’t keep your spending in check, you’d blow it all. Our lifestyle has a tendency to always grow into our budget. Either willingly or subconsciously. As our income grows, our standard of living grows. And we may not even realize it.
If you don’t manage spending and establish a strategy for saving, you’d always be broke. Saving money is a must!
Everyone can save money, even with a small salary. Learn how to save here!
Saving Money is easy when you:
3.1. Establish a Solid Budget Plan
Create a budget plan that works for you, and stick to it. The numbers would vary from person to person but the 50-30-20 Budget Rule is an excellent starting point for most!
3.2. Make Saving Fun
Enjoy saving money. Set yourself challenges or compete with your partner, and watch your money grow.
3.3. Find Creative Ways to Save
Saving money is not about starving yourself or completely doing without. It’s about being responsible and somewhat clever with your spending. If you must make a purchase, save money by:
i. Bartering Instead
ii. Buy Second Hand Items if Possible
iii. Use Cashback Rewards and Coupons
iv. Minimize Waste – Reduce, Reuse, Recycle. Don’t waste food, etc.
3.4. Save on Food
Food is your most volatile expense! It can make a budget or it can ruin your budget. Be smart about how you handle your food expenses. Meal prep, cook frugally and find ways to enjoy food without spending all your money.
Check out our Frugal Weekly Meal Prep for a week’s worth of meals for just $1 each!
4. Find the Balance Between Saving Money & Making Money
This is a tricky concept for many to grasp. Sometimes you need to trade off and spend a little, in order to make a lot. Frugality requires some intelligent thinking at times.
For example, on some days it may make sense to buy some takeout instead of cooking, in order to jump on a money making opportunity such as a Paid Survey or Focus Group.
It doesn’t make sense forfeiting a $1000 opportunity in order to save $10. Remember, the more you earn, the more you are able to ultimately save. Be smart with how you go about it.
5. Have an Emergency Fund
As a fully functional, independent adult in this world, you must have an emergency fund. This is to cover unexpected expenses such as car issues, repairing a broken appliance or having to hire a plumber or handyman at a moment’s notice, etc.
Financial expert, Dave Ramsey recommends starting with $1000. You can choose to hang on to more if you wish.
This money is to be used for emergencies only. And craving a steak dinner, on a random Tuesday, does not constitute an emergency!
Note: Your emergency fund is not company provided insurance. This is something separate. Health insurance, vehicle insurance, home insurance and other forms of emergency insurance need to be budgeted separately.
6. Save for Specific Future Goals
You must set aside money for your future goals. You know what you want to accomplish and you need to start planning accordingly. Everyone is different and long and short term goals vary from one individual to the next.
The earlier you can figure out your financial goals the better off you are. And the earlier you can commit to them, the greater your chances are of accomplishing them.
Short Term Goal Examples:
Taking a Vacation
Hosting a Party
Home Repairs / Upgrades
Purchasing a Vehicle
Paying off a Loan
Paying off Credit Card Debt
Long Term Goal Examples:
Purchasing a Home
Paying off Your Mortgage Early
Having a College Fund
Retirement Account / Pension
401K
Early Retirement Fund
Owning an Investment Property
Starting a Business
7. Invest
Investing in stocks or getting involved in legitimate money making ventures, are great ways to make money and diversify your income.
As for stocks, this is a long term investment strategy. For details on investment in the stock market, you should discuss details with a licensed financial advisor. Just understand that there are certain risks involved.
If you are looking to dabble in stocks a bit, without risking too much, you can check out Acorns! They start you with a $10 free sign up bonus!
Other areas for investment opportunities include: real estate development or flipping property, businesses, vehicles or other items.
8. Manage Your Expenses Wisely
There will be products and services that you cannot avoid. They are just essential for survival. However, whatever you must buy or whatever you must pay for, do it with some degree of thinking involved.
i. Shop around for the best deals on recurring expenses such as: internet, utilities, maintenance services, etc.
ii. Shop online to avoid in-person temptations at the store.
iii. Utilize cashback promotions, coupons, deals, discounts and special offers whenever possible.
9. Manage Your Debt
Unless you were a trust fund baby or blessed with a huge inheritance or financial windfall of some sort…you will have to seek support from the bank or other financial institutions to get ahead in life. Even though it may be intimidating to some, this is reality.
From personal loans, mortgages, business loans, vehicle loans, credit cards, college loans, etc… We need them all. However, we need to manage them well.
i. Make payments on time to avoid additional charges.
ii. Only borrow when absolutely necessary and you have a solid repayment plan.
iii. Pay off debt as soon as possible.
iv. Respect credit cards as a loan and not “free money”.
v. Monitor credit card usage and try to pay before incurring interest.
vi. Tackle debt with the debt snowball method.
vii. Stay out of debt as much as possible.
10. Think Before You Spend
No impulse buying! If you are thinking about making a big purchase, sleep on it, put some careful consideration behind it, run some numbers, and then purchase if everything checks out. Avoid spur of the moment financial decisions.
11. Educate Yourself Financially
We have a way of investing time in whatever we are interested in. Instead of hours consuming empty social media content and Netflix drama series, why not invest a little time in educating ourselves?!
Knowledge is power and exposure to the right money management advice can make or break us. Use your time wisely!
12. Start Early
The earlier you start taking control of your finances, the better off you’re destined to be. Saving money takes time, building a good credit score takes time, accruing returns on your investments takes time. Start early to reap early benefits!
13. Be Happy
All your efforts could never be worth it if you are miserable all the time. Even if you are stretched thin right now, take comfort in the fact that a short term sacrifice would bring about long term benefits. Be happy with your decisions and the financial road map that you’ve laid out for yourself.
Additionally, it’s crucial that you balance ambition with contentment! It’s okay to want more and to set bigger goals for yourself. But you need to be satisfied on a deeper level, as you are…while striving further.
Appreciate the journey!
14. Get Your Spouse Involved
One of the biggest financial decisions that you could ever make in your life is picking a spouse. Whether you have a joint bank account or manage your money separately…your finances could never be 100% independent of each other.
Set ground rules, agree on goals, learn together and work together as much as you can. Teamwork makes the dream work!
15. Stay Informed
The world is constantly changing. Some things positive and some negative. Also, it depends on your perspective and which side of the fence you are at times. And everything affects money in one way or the other!
Trade wars, technology advances, international conflicts, social media trends, fashion choices, climate change, green energy, industrial shifts, artificial intelligence, sports, food, health, you name it… Every day it’s something different!
Know what to avoid and what to invest your time, money and energy into. Stay informed on a daily basis!
Frequently Asked Questions for Money Management Advice
FAQ: What is the 50/30/20 rule for managing money?
The 50/30/20 money management rule is a budgeting guide where 50% of your income is allocated to cover your needs, 30% towards your wants and 20% towards saving.
Housing, transport, food and essential bills are covered by 50% of your earnings. Luxury products and services, entertainment and other forms of leisure make up the next 20%. The final 10% is saved.
FAQ: What is the 70/20/10 rule money?
The 70/20/10 budgeting guide is better suited to the average person surviving through life in today’s economy. Due to the rising cost of living these days, it offers a more relaxed, achievable and realistic budgeting solution. 70% of your income goes towards needs, 20% to wants and 10% to savings.
FAQ: What is the 7 day rule for money management?
The 7-Day Rule for money management is an evolution of the idea of “sleeping on a decision”. If you have the sudden urge to buy a non essential item, or to make an “impulse purchase”, delay your decision for 1 week. Take the week to review your decision and decide whether you genuinely want to proceed with the purchase.
More often than not, your desire for the item would fade away during that time frame, preventing you from making a poor financial decision.
FAQ: What is the right way to manage money?
The right way to manage money is by following basic finance tips in a manner that is customized to your lifestyle, situation and goals. You need to: budget, save money, diversify your income, set up an emergency fund, manage debt efficiently, educate yourself financially and develop healthy spending habits.
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Final Thoughts on Financial Literacy Lessons for Adults
Money management advice is something everyone needs and being financially literate is priceless. Continue to invest time in learning and growing so you can make the best decisions for your life.
Ultimately, your financial accomplishments would boil down to the initiatives that you took and the decisions that you made. Once you give it your best shot, you could never be disappointed with the outcome.
Are there any other finance tips that you think are worth mentioning? We’d love to hear your thoughts in the comments section below!
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