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Managing our finances is an essential aspect of life that should be part of the school curriculum.
So many of us grew up without any idea of how to save, grow our credit score, or where to invest our money.
Someone who’s facing this predicament asked other forum members for advice on how to handle money. Here are their best tips.
1. Think About the Total Price
Countless users caution that lenders make you focus on the monthly payments to obscure the exorbitant total cost.
One person recounts how they made monthly payments for a car and were close to paying the total amount.
The bank sent them a letter saying they could skip monthly payments for the next month at a fee.
This would accrue more interest, which they’d have to pay, but the bank presented it as a kind gesture. They used the pre-paid mailer to send a handwritten note declining the offer. The bank had to pay for the postage.
2. Pay Your Credit Card Before It’s Due
How often do you pay your credit card? An individual recommends paying your card off every week or on payday, even if it auto pays.
This way, you are not surprised by the total. They add that you should only buy something with your card if you can afford it in cash.
3. Don’t Spend Money on Compost Fodder
You always think you’re saving money while buying in bulk, but you may be buying manure. A prudent spender states you should stick to shelf-stable foods when shopping in bulk.
Buy what you can reasonably prep and eat before it spoils.
When they were younger, they thought they were saving money by buying three packs of strawberries for five dollars instead of one for three dollars.
They couldn’t go through the three packs since they were only two people. Instead of saving money, they spent two more dollars on compost fodder.
4. Consider Savings as a Bill
One person proposes setting up a separate savings account. Then, you can save automatically whenever your payment checks in.
Ensuring it’s not connected to your checking account limits access and the temptation to dip into your savings. Save and forget about it. You’ll feel great after accumulating a considerable amount.
5. Prepare for a Rainy Day
Life is unpredictable, and you can never prepare enough for an emergency. However, having an emergency fund makes it easier to navigate such times.
A commenter suggests having a minimum of a thousand dollars in your emergency fund. It’s ideal to have three to six months of expenses covered. If you can afford one year, that’s safer.
This money will help you avoid depending on loans and credit cards on a rainy day.
6. Think Before You Buy
Can you count the unnecessary things you’ve bought after payment comes in? According to one, you should evaluate whether you need something before purchasing.
If it falls outside your necessities, wait twenty-four hours before buying it.
7. Track Every Cent You Spend
A responder endorses creating a budget where you note all your expenses against how much you make each month.
Categorize your expenses into mandatory living, fixed mandatory living, and fluctuating optional expenses.
Mandatory expenses include food, gas, and clothing; fixed mandatory expenses include phone bills, rent, and car payments, while fluctuating optional expenses are frivolous.
8. There’s Food at Home
Anyone who grew up in a household where money was tight has heard the above statement more than they’d like.
A money saver indicates you should cancel your Uber Eats, DoorDash, Starbucks, or other eating-out arrangements. Instead, cook all your meals at home.
9. Build Mental Awareness
Using cards to make payments reinforces the idea of bottomless cash. Another budgeter says using physical cash and envelopes system enforces the idea that you’re losing something.
A physical exchange makes you aware of what spending means.
10. Up Your Game
Finally, a frugal living enthusiast writes that you should learn how to get the items you need at a good price. Note what items are worth paying more for and those you can get at the dollar store.
There are events you may need to pay for, but others you can attend for free. Put some effort into spending less and saving more.
They recommend reading the book, Your Money or Your Life for tips on frugal living.
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This thread inspired this post.
I have over 15 years experience in the financial services industry and 20 years investing in the stock market. I have both my undergrad and graduate degrees in Finance, and am FINRA Series 65 licensed and have a Certificate in Financial Planning.
Visit my About Me page to learn more about me and why I am your trusted personal finance expert.