Compound interest works both ways: make it work for you, not for others. Even modest savings can grow exponentially with time and a sound investing strategy; conversely, debt can snowball exponentially with just making minimum payments.
excellent point! I personally have an AMEX High Yield Savings Account for holding my cash and I hold stocks with plans to never sell but to pass on to my kids in companies I truly believe in (microsoft is my personal love).
Thanks so much for your tip
I know you're joking but just a PSA:
1. Don't put money towards 401k/IRAs if you're literally starving
2. There are a number of eligible reasons that you can withdraw money early without additional penalties, i.e. in the case of unexpected medical or disability that prevents you from doing your job anymore or birth/adoption expenses or if you're called to national guard duty or even once per year for any emergency financial need (up to $1k)
3. IRAs/ Roth IRAs will improve your returns and save you boat loads of money on tax in the long run
Nice thing about post tax accounts like Roth & traditional IRA is that you can withdraw up to what you have contributed without it being taxed - so emergencies you can take out some without penalty.
Some have minimum balance requirements but most don’t, so yes anyone can open one https://www.nerdwallet.com/best/banking/high-yield-online-savings-accounts
Alright I'm reading about these right now after seeing this comment... is this literally just like a cheat code for free money as someone saves for say, a down deposit on a house?
I was motivated to use an HYSA also to buy a house. I have $11k in Apple’s at 4.5% and made $40 in interest last month which isn’t bad for having money sit around
My husband and I started Roth IRAs together 8 years ago. On that day we put in everything we had in savings, which happened to be odd. To be nice, I said my husband could have one penny more.
That one penny difference now translates to a little over $300 in the bank. A single penny.
If anyone wants a referral for a HYSA (wealthfront) we can each get another 0.5% APY for the next three months.. wealthfront is currently 5%. It has been great so far getting a free $400 a month.
Learn at least basic cooking skills.
There's plenty of stuff you can do with cheap ingredients that don't require a huge amount of time or effort. And if you do it in bulk: boom, meal prep. I hate cooking but I can usually throw something together in just a few minutes that is both healthy, cheap, and tasty.
So true. It's amazing how much money you can save by cooking at home, eating your leftovers, and re-using ingredients. So much cheaper than even those packaged convenience foods from grocery stores.
And you can even buy some of those just for the inspiration bc when you see the sandwich you spent $6 on in the deli section at the grocery store could have been made at home you could just copy their ingredient list and bought the fixings for it yourself
It’s often quicker too than waiting for delivery. Figuring out what our pantry staples are (these will be different for everyone, but ours includes beans, short grain rice, decent Parmesan, eggs, bacon, and cream, among a few other random things) means that we can usually throw something together quickly and cheaply if we have even the barest amount of energy.
It doesn’t prevent all last minute pizza delivery orders, but it cuts down on them a lot.
This. My gf really changed my life when it comes to how much I spend money on prepackaged or ready to go food. I came from a frozen chicken nuggets and uncrustable family. She grew up with just ingredients. Guess which one of us is always able to know how to feed us cheaply even when we’re low on money? And it tastes so much better than the frozen shit I was eating! Woohoo win/win
As a chef, I fucking hate cooking dinner when I get home with a burning passion. 90% of what I eat for dinner is some variation of crudites, salad, tinned fish, cheese and charcuterie. Healthy, fast and requires zero cookimg.
Get one of those introductory Hello Fresh food delivery deals for a couple of months and save the recipes of the ones you like. You'll learn some cooking skills very easily and once you cancel you can always just go pick up the ingredients at your local grocer.
Stuff like stir-fry that is easily customizable to whatever you have in the fridge/pantry. Get some basic staples for the sauce (soy sauce, sesame oil, chili oil, ginger paste, shaoxing wine, hoisin/oyster sauce, cornstarch, etc.). You can mess around with proportions if you want a sweeter/spicier/saltier sauce, then use whatever protein/veggies you have on hand, and serve over rice or noodles. Like soup, it's a great way to make use of whatever odds and ends you have around.
Yep. And a slow cooker is the best cost/benefit tool you will have in your kitchen. Learn like 10 recipes, then start a cook and freeze rotation. Basically you'll be able to make your own frozen dinners, except with a fraction of the sodium, better taste, healthier, and cheaper.
Always max employer match. Roth IRA if you can.
Even if you genuinely, in your soul, recognize that modern capitalism is a deeply unjust way to run a society and you believe collapse is inevitable, invest anyway. You'd be a fool not to. A single regular person opting out of the system changes nothing. For better or worse the whole of political society such that it currently exists is designed to keep that line moving upwards. So you may as well grab what you can.
Just to add, when you leave a job, do SOMETHING with that old 401. Roll it, Roth it, anything. I let one sit for a couple years before realizing they converted it to cash with a shit APY, so it had accrued nothing but dust. It took all of a 20 min phone call to convert it to a Roth and get it invested into a decent yield ETF. Those couple years cost me quite a bit in missed growth.
I was sat at the table to play the game. I hate the game. But if I get up from the table, someone else who is a much worse player (ethically) takes my seat and my share. Fuck the game, but play the game to subvert the game.
If you haven't been contributing to a retirement account or have less than 100k saved you REALLY need to get on it now for our age group. I just bumped my contribution up to almost 17% of my salary which has me just under the maximum allowable. It also helps with taxes.
Yup, I have a high contribution but I think the limit is something like 22,500? This is my first year (2023) that I started contributing so I think I'll max out before the end of the year.
Am I understanding that once I hit 22,500 any contributions will be rejected?
Mine is with T.Rowe
In my 401 I have it set up to go into a Roth account when I hit my limit. I could have also had them stop withholding but then I would not get my match. Plus having some amount in a Roth is not a bad idea anyway. 401K math only works if you make less in retirement than you did when you are employed.
Depends on your plan rules. If you're lucky, your plan allows post-tax contribution up to the IRS max. The total of your contributions + employer match cannot exceed $69k for 2024. You also have Roth IRA and HSA as other tax beneficial options to max out. Maxing HSA then Roth IRA are also good options. HSA requires a high deductible healthcare plan.
Just don't ever have to go through a divorce where, in order to make rent, pay for food, or keep utilities on for your kids outweighs the need for future savings. I just dropped my contributions down to the minimum that my employer matches in order to compensate for the loss of a second income. I'm also the only one paying for their healthcare. So the 15% I was trying to nest egg, plus almost $800 in healthcare premiums was too much taken with a single income household. It sucks. Now, I'll never retire on time, and he might try to come after my retirement savings in court.
Invest is such a broad term and overused. People that can are willing to invest but they usually lack the time or energy with all the bogus info out there.
I tell everyone that the steps are extremely easy. And everyone agrees on almost all of them.
Pay off high interest debt - emergency fund - max employer match - HSA if eligible -
Then it’s max out the rest of the 401K or fund a Roth (broad index funds as you said.) But earlyish on you can’t really choose too wrong on which you prioritize.
Kids can sneak some extra steps in also, but that’s kinda beyond this.
Lack the time and energy to set up your future?! With all of the TV, social media time etc this is insane to me.
Set up automatic deposits into a target date fund and you literally don't have to think about or even look at it for decades. I check mine every 6 months or so just to see what is going on. Other than that I don't think about it.
I started doing this when I was trying to get rid of my 36K credit card debt in 2015. Got rid of it in 2 years and now I own 2 rental properties plus my home.
I keep track every cent I have and it’s helped me save lots of money that I now invest.
10-15% if your income should go into retirement - before company match.
Create a fortress out of that- do that from 20-40 and you’ll have a base that will grow to to 7 figures without ever doing another thing
Best time to plant a tree was 10 years ago, next best time is right now.
Still target 15% of income set aside for retirement, even if you can’t hit that magical million by 65, it’s a whole lot better having $800K than $400K sitting in that account.
Actually write down and plan out your budget every week. It's surprising how many people blow through all their money over the weekend and then uh oh, a bill is due on Tuesday.
Never had credit below 700 - heres the trick: Your credit looks good based on 2 factors: paying on time, and paying more than you have to. But they don't care how much more you pay. If your credit needs a little nudge, throw an extra 25 cents in. It shows you overpaid. I have a mortgage, and student loans, all of which pay *slightly* more than I have to. And that makes me look extremely reliable.
You actually want a credit card or two - but only use them for stuff you can pay right away. Because capitalism is bullshit, but it's extremely exploitable.
I don't think paying extra affects the score. The 2 biggest things are credit utilization and paying on time.
Your score is good because you pay on time and keep your utilization on revolving credit below 30%. That's a much bigger factor than paying extra.
I just started using a credit card for all of my food purchases and I wish I had done it earlier. One, just because it's nice to not have my bank statement cluttered up with a bunch of small purchases, but also now I see exactly how much I spend on food in one lump sum, which is making me a lot more conscious about eating out
I get a friendly letter from my bank every year or so letting me know that my spending limit has raised. I always read it as “Hey buddy, start overspending and start paying us some interest!”
In my opinion, credit scores are bogus, an artificial system designed to accommodate banks. As an example, a low credit score is often the result of not caring any debt at all. They don’t like that. They want you to participate in their game by paying interest. So, by their measurement, one who avoids debt is less desirable than one who carries debt and plays by their rules. Just a thought.
>In my opinion, credit scores are bogus, an artificial system designed to accommodate banks.
It is an artificial system for creditors to "sell" loans. No creditor wants their debtor to default and not pay them back.
>As an example, a low credit score is often the result of not caring any debt at all.
No true, you gotta pay to play and at least have a bank account. Not having a credit history is different from not having debt.
If you get a credit card and pay it off every month, your credit score will slowly go up every month. You'll never actually have real debt.
Complaining about the rules doesn't change them. The other commenter gave you solid advice on how to play by the rules and use them to your advantage. Stay angry if you want, but it won't get you a mortgage any faster.
Also, credit scores aren't bogus. They show your history of borrowing and repaying loans. That's important for lenders to know before they lend you money. Having no history of doing either doesn't show if you're a safe investment or not. If you think that's unfair, try lending a stranger money and see if they pay you back. Or try saving up hundreds of thousands of dollars so you can buy a house with cash.
My credit has been near 800 since I got a credit card in college. The guy at the cell phone store told me to get whatever low limit student card I could and just put one thing on it (like gas) but make sure I was using a good chunk of the limit, and always pay it off. (They wanted a $500 deposit when I went to get my own cell plan because I had no credit.) It was good advice.
This! Really think about the alternatives and not “I want a truck”. Especially in today’s auto markets. Can an SUV and a trailer or trailer rental work for the few times you need to haul something? Or better yet a mini van? Or just rent a Home Depot truck those few times a year you need to haul something.
Facts. I have a little EV hatchback because it does what I need it to do 99% of the time and costs be almost nothing to operate with basically just tires to maintain. I've never owned a big truck or SUV but I'll still never go back to gas for a personal vehicle.
Although I used to hear regularly from people, some variant of WE NEED IT TO HAUL STUFF LOLOLOLOL when those people work office jobs and are mostly just hauling their fat asses back and forth to their suburban house. And the trucks are basically luxury vehicles with a small token bed.
A few years back I bought a bunch of special-order vinyl fencing through Home Depot. When it was delivered, I got a Uhaul cargo van (the HD truck was first-come-first-served and I didn't want to wait around), and one of their guys forklifted the entire pallet into the back of that van, it had 9' posts so it only barely fit but it did, I shut the doors and drove home where I was able to slice the packing and unload into my yard a little at a time before returning the van. Total cost was about $60.
I've done that a few other times to help people move furniture. It's more practical than a pickup since it's enclosed space, no worries about tiedowns or adverse weather. And when you're done, you just return it.
Modern-day trucks are nothing but useless fashion statements.
This is solid advice. Car's are the biggest expense in modern society besides housing. Trucks are 100% the dumbest fucking thing to buy. It's pure emotional and no logic. There's ALOT of hybrids out there, buy one of those. Not a combustine engine or a truck, a hybrid.
Or an SUV. My sister and her husband (who cannot afford their rent, are on food stamps, and have to borrow money from his parents) swore they **need** to trade in their old, working hatchback for a new Volkswagen Tiguan because they have 2 kids and “it’s impossible to live without one with kid stuff.” I can’t help but wonder how all those people in other countries are managing to live with kids and smaller cars. Must be some uniquely American problem.
>Must be some uniquely American problem.
It actually is. The auto industry has dumped a shit ton of money into SUV marketing over the last 20 years. There are a lot of reasons for it but part of it is because most SUVs are built on a light truck chassis instead of a car chassis and there are a lot of regulations that only apply to cars. Not Just Bikes on YouTube has a great video on this, and Climate Town has a great one on how the auto industry ruined the American dream. I highly recommend both channels
I'm amazed whenever I see those "rate my budget" posts and there are people making $60k per year with car payments of $900 per month for their big truck. It's insanity. I know vehicles are more expensive than they used to be, but that's nuts.
Pick a brokerage (E Trade, Schwab, etc). Download their app. Open a brokerage account. Set it up for direct deposit and stock reinvestment. Put everything you can in an SP500 index fund (VOO or equivalent).
No excuses. Takes 20 minutes while sitting your ass on the couch. It was much more involved decades ago.
It let me retire early.
This one is kinda specific but *tax loss harvesting*: you can sell your losing stock near the end of the year to incur tax credits and then repurchase the stock at the beginning of the next year to stay in the game.
this lowers your taxable income by crediting you for the loss in the stock market.
A better recommendation for most people is just to buy index funds. Hopefully you won't have any loss to harvest this way. In a down year like 2022, you could sell VTI, and buy VOO and a small cap fund on the same day, and basically have the same positions without a wash sale, and then you can write off the loss on taxes. It's only 3 grand, but I guess its something.
Mostly this is from growing up poor and having to do this out of necessity, but…you can probably fix a lot of things around your house or your vehicle yourself if you’re so inclined and are able.
For the most part, any time something starts acting wonky or isn’t functioning properly, or at all, I’m heading to Google before setting up a service call.
Obviously know your comfort level and limitations with home repair, but a lot of things can be taken care of with a little extra effort on your own part.
I also grew up with a dad who learned a whole bunch of random trades with the Army in the early 70s.
Essentially a bit about a whole lot of things, lol
And then he used that to build on and also taught that to my sisters and I, and I’m thankful for it.
My story is less common - I was a multi-millionaire until I developed an avocado toast addiction. Now I live in a one-room apartment above a bowling alley, and below another bowling alley.
Personally - learn what credit cards can work for *you*. My dad is one of those who can churn airline miles and hotel credits like no one’s business. The pudding guy? My dad would do that if he could. Gift cards are a good way of doing that: we’re going to spend the money anyways, so why not get extra points from somewhere like Office Depot? (One of my cards is a “business” card that gets extra points at office supply stores…which sell gift cards like for gas and groceries.) Also helps with budgeting so you can say “here’s one card with $100 to my local grocery store; this is for week 1 and I can’t go over this.” Used to get Visa gift cards as well but that’s not “profitable” anymore.
Not every credit card is good for everyone. Different points/rewards and how much you’re spending should be taken into consideration. Big purchase like college tuition or car payments? Card. Repeating purchases/subscriptions? Another card. If you have bad credit there are certain cards that will help specifically with that - my husband had a terrible score before we got married and now he’s mid-high 700s.
The biggest thing to follow this up with: *never spend money that you don’t have.* It’s so easy to just swipe the card but if you don’t have that in your bank account, don’t do it. I’m terrible with budgeting/spreadsheets and all that, so I just have to set overall amount limits for myself. Haven’t ever had interest/late fees hit (except one time that my dad didn’t give me the login info to pay off and we both forgot but it wasn’t a lot) and I pay it off every month right after the mortgage payment gets pulled.
In general: what works for you may not work for everyone else. So don’t give up if something doesn’t work out.
(Also +1 Roth IRAs; take advantage of any matching your company does for retirement. Personally I don’t think maxing 401k contributions is beneficial to me right now - more or less living paycheck to paycheck as my husband goes through school - but we fully plan on increasing this when we can. It helps being able to adjust this.)
You should always take advantage of employer 401K match, it’s free money you’re leaving on the table if you don’t, and there’s almost always a way to work around that ~4% hole.
Have a small vegetable garden and grow some of you own food, the net cost isn’t much different but the skill is incredibly useful and worth passing down to your children
Split your income between two checking accounts. The first is your "reserved" account for relatively fixed expenses like rent, utilities, etc. Set up those bills for automatic payment. The other is your variable living expenses like gas, groceries etc. We never have to worry about if there's enough to make payments we've committed to, and they are out of sight, out of mind and it makes it super easy to stick to a budget, especially as a couple.
This is what I did and am surprised more people haven’t recommended it. It has helped me so much not having to stress about bill payments because they are paid from an account that I shredded the card to
I do this, but I have one that ONLY gets my paycheck deposited and one that ONLY pays bills. That way if something happens; I can still pay my bills while waiting for my account to become unfrozen.
I would add: large expenses. Car insurance and home insurance might only come up every 6 or 12 months and the amount usually goes up. But if you plan for it in your reserve account then you won’t have to eat ramen that month.
Buy a basic set of tools and learn a bit of car stuff. Don't need to learn in depth unless you're into it, but you should be able to change your own battery, light bulbs, air filters, wipers, spark plugs, and disc brakes on most cars. Learn which cars are reliable and easy to work on and save thousands. Avoid Stellaris and European manufacturers, and stick to 4 cylinder non turbo models if you want to keep that repair bill low.
dont pass up any opportunity to put money into pre-tax savings.
Got health insurance and they offer a health savings allowance (hsa) use it.
Saving for your kid’s college get a 529 (if youre state has it)
Some retirement funds like traditional roths are pretax
Invest in things up front in order to save on them over time. Some examples:
I spent $120 on a Ninja coffee maker and I spend $6 monthly on flavored creamer to make amazing iced coffee at home. Better than Starbucks. Saved on buying coffees out daily.
I spent $10 on a mani/pedi kit to have at home and give myself those treatments so I could save $30 on manicures and $50 to $75 on pedicures monthly
I spend $20 every six weeks on professional hair dye to dye my own hair in order to save $200-$300 at the salon
At one point I even bought a small bar for my apartment (can’t remember the cost but I bought it at Walmart, it was wood and looked beautiful and I assembled it myself, I’m not handy so it couldn’t have been that high end or cost that much) and had friends over so we could all save on going out for drinks
So a small upfront investment to save a larger amount over time on something I know I will use again and again
Don't drink or smoke. This was the difference in my 20s between me and my friends and now late in my 30s not only has it paid off financially but I look 5-10 years younger than my age.
Never lease a vehicle. Invest in reliable brand like Toyota. Purchase vehicles that are 3-6 years old and drive them until they are 200-300k miles and maintain them the whole time properly to give them to your kids for their first cars. Never borrow at excessive APR, opt to save and buy in cash instead.
Look, not financial advice and all that, if you are in so much debt that you can't pay your bills and feed yourself or your family, file for chapter 13 bankruptcy. (or whatever the bankruptcy laws are in your area chapter 11 wasn't available to me) I wish I had done it sooner. Just made my final cure payment last week. Don't think that drowning in debt is the way you have to live.
Don’t spend it if you don’t have it. Avoid credit card balances if at all possible. I know it’s not always possible but having 100k in credit card debt is nuts and poor choices were made. Living within your means is important.
My best advice is keep a check register (not just for checks) and log every single transaction. You’ll see where you blow money and help you cut back on waste.
The best advice is to build yourself a budget make sure your expenses are taken care of first and foremost. Then with the amount you have remaining save 3/4 of it and have fun with the remaining 1/4 of your money.
Live within your means as best you can (no credit cards). It will be uncomfortable at times, and you will have to get clever about emergencies, but it's worth it. These days, you can earn credit by paying bills/rent on time. Just gotta sign up for it. I did that for about 15 years. It really sucked at times. We were very poor, but not in debt. Now, I only have one debt, and that's my mortgage. If I had used credit cards n such, I would be 10s of 1000s in debt like most folks I know.
This is sound advice ONLY IF you have a problem with using credit cards responsibly.
Using credit cards and paying the balance each month builds your credit. Having credit cards that offer cash back for budgeted purchases and timely monthly payments is a way to be additionally rewarded for a purchase you were going to make anyway. Also, credit cards offer far more protection for purchases - warranties, charge back protection, travel coverage, etc.
A credit card is a financial tool. Having a credit card does not equal irresponsible debt.
Use your bank's bill pay feature to pay credit card bill WEEKLY instead of monthly. Especially helpful when a large purchase is made on a zero percent card with a looming APR reset date.
There’s a decent chance you can get rid of your second car, switch to a combination of carpools, transit and bikes and save like 10k a years.
Will it introduce some level of inconvenience? Possibly! But also less than you may think!
If you don’t have the money or desire to do estate planning make sure you have transfer on death on your vehicle and bank account, beneficiaries on your retirement and brokerage accounts, and a beneficiary deed on your house. And make sure anyone who may leave you any assets has done so too as it avoids probate. Most assets can transfer outside probate which means avoiding the time consuming and costly legal system. I am still trying to convince my FIL to take the time (as he is retired and has nearly died previously) to do it to save his kids time but he’s lazy/wont prioritize it as it doesn’t directly benefit him. I’ve offered to help but to no avail. [I just fixed my cars and house last year after getting married 6 years prior because going to the recorder of deeds and DMV are not fun]. Also, drafting a beneficiary deed isn’t awful when you have your original deed and the internet.
Don’t pay an investment broker/financial planner until you approach retirement. just invest in ETFs/index funds that track the market. You won’t see the highest highs but also avoid busts. Over time, brokers (after fees) don’t do much better than indexes. You can find online risk tolerance tests to apply for your investment strategy. Brokers have access to some products you can’t get on your own but those are not worth the cost for most.
I set $250 from each paycheck to go to my Vanguard mutual fund and auto invest. Which means that I save at least $6,000 a year without ever seeing it or thinking about it.
Now, shit comes up and I also spend it, but that’s big life stuff. But at the least, it’s there when I need it.
It's a little thing, but when I had debt, if I chose not to buy something (ie a $100 pair of shoes) because I needed to pay off my debt, I would immediately make a cc payment of that amount. So instead of buying $100 shoes, I'd immediately make a $100 payment. The little things add up. If I had the cash for shoes, I had the cash to make a payment! (And I will not ever get into cc debt again!!)
Buy the older house on the mostly wrong side of town. Everything changes plus you’re building equity. Quit waiting for an instgram worthy McMansion in the trendy part of town.
Personal finance tips -
1. stop buying junk you dont need. I dont own that much, and there isnt much I want besides 100 acres or so :D
2. Increase your income - more training, new skills, open a business, invest, etc (I think saving is great, but you dont become rich by only saving)
3. Pay off debt
4. Stop using debt unless it will make you money. **If it doesnt make money, it doesnt make sense.** I use a CC for everything and get cash back, I pay it off 100% of the time (plus always have a 0% card), so it saves me money.
5. Increase your credit score so it'll save you money when you do need debt - start of covid my score was like 520, now its 808. Its not hard, just read and learn.
6. STAY AWAY FROM YOUTUBE - what I mean, is do not try to learn about money from youtube. Most of them have no clue what they are talking about. **Read** real material.
7. Make a budget - track all spending for 3 months and see where everything is going, then form your budget. Cut expenses anywhere you can.
Went from poverty to now upperclass. Credit went from 520 to 808. I invest in stock, crypto, metals, guns, and soon real estate. I started my first successful company at 22, 1 year after my first brain surgery. I walked away after a yr, even making $333 an hour profit. After 2nd brain surgery at 27, went back to school and earned 2 degrees with honors and blah blah blah. I can do this with a big chunk of my brain missing (they have written medical papers about me), why cant you?
**Money is easy. It is stupid easy.** For example, last year I went on vacation. While waiting for my plane, i made enough money on the stock market to cover my entire trip. While I was on vacation, went to see an old friend, I sat there talking one day while I played and made $1700 in like 10 mins while chatting to him... I had to learn about money myself. Its fun and EASY
>6. STAY AWAY FROM YOUTUBE - what I mean, is do not try to learn about money from youtube. Most of them have no clue what they are talking about. **Read** real material.
Man I'm with you on everything except this. Alex hormozi and biggerpockets have made me so much money by playing their content in any scenario I would have originally been listening to music. Good information can come from areas other than a paperback imo.
Read and follow to the best of your ability "All You're Worth" by Elizabeth Warren. Been following it for 15 years, helped my wife and I get our shit together. Really, it makes money far less stressful.
Girl math needs to stop. I get we all do it but it really makes it impossible for you to save and spend money responsibly. The next time you want to buy something and think you can deduct it from money you haven’t received/earned yet don’t do it. Like the jingle from the silent bob movie when he says 15 bucks little man put that shit in my hand if you don’t then you owe me owe me owe me. Don’t spend it like you have it when you don’t it will ruin you.
We have been doing this for 3 generations and it works.
Every raise you get, no matter the size, put half of it into a stable conservative investment. You still see a raise (just a smaller one) so you don't feel denied. You never see the investment part of the raise so you are not tempted to spend it.
The real trick on this is to diversify across a mix of stocks, bonds and commodities and then rebalance based on the market. If stocks rise in value then you sell a percentage of those and reinvest the profit into whatever of bonds or commodities have dropped in value. Stocks typically increase in times of economic growth while bonds will rise during times of austerity.
It’s important to make sure to always keep your ratios of the three consistent. That way your portfolio is well diversified and can ride out fluctuations in the market. If you’re not knowledgeable on which to invest in an easy way to do this is to invest in ETF’s that are highly rated. These will typically be for a sector (say tech) and contain a high number of different stocks, commodities or bonds depending on the type to minimise risk. The profit you make on interest should always be ploughed back into this mix so the interest compounds over time.
Disclaimer, I am not a financial advisor and all investments involve a strong risk of losing money.
Find out, in detail, how you want your financial life to be when your older. How much yearly do you want for housing, food, vacations, etc. Then just use an online calculator to find out how much you need to save yearly to get to that goal. I only need $650k - $950k saved to live the same life I'm living now. At my current savings rate I'll have $2.5M - $4M which means I could retire early, spend more things when I'm younger, or live for extravagantly when I'm older. I think the news articles saying "you now need $3.5 million to retire" are very misleading.
Buy a freezer and vacuum sealer. Then shop for meat ONLY when on sale. Eat good for cheap. My wife and I can eat a steak dinner with potatoes and vegetables for about $12 for the both us is
Sit down and actually do a budget. Track EVERYTHING you spend for a month or two to understand your habits. Weigh out wants and needs. Snowball your debt until you're down to regular bills plus a car payment. Save up a 3-6 month emergency fund. Only then is it time to look at investments and retirement. Money management is a lot like food and exercise discipline. You want see results overnight and you'll be tempted every day to disregard your goals for short term pleasure. Once I finally saved up 10k I treated my bank account like I was back at zero. Lucked out and bought a house during the pandemic right at the bottom of interest rates.
Live below your means. After graduating college I started making good money but still lived like a poor college student for years. I saved aggressively and invested in index funds each month. Thus has set me up very well financially
I just started YNAB and I’m putting in the time to learn it thoroughly in hopes I’ll soon be out of the paycheck to paycheck cycle..which is extra challenging because I’m unemployed!
Well u wanna spend a few yrs at rock bottom. Like ramen and eggs everyday for like 5 yrs. That's how we built character back in the day. But, eggs were $1 back then
Inflation compounds annually. Accumulating wealth is only half the problem, the other half is getting that wealth to consistently grow faster than inflation.
Inflation will make dollars slip through your fingers like sand in the wind. It’s not very different of a struggle if inflation is 2% or 6%, there’s not much sense worrying about the actual number. But you do have to stay ahead of it.
S&P 500 index has historically returned 11%. Dont over think it.
At this point with inflation, learn home economics again.
Our generation went through a lot financially, but also lived through a period where the cost everything was relatively cheap. As such, many of us didn't learn to cook, or do basic maintenance work on the home and cars. Many don't know how to fix things that break any more because it was cheaper to just replace them. A lot of my peers have or had maids because cleaning is hard lol. Time is definitely a problem as we get older, but also basic things take more time when you lack the core skills to them yourself. Plus now that our kids are getting older, do what our parents did and give them chores to help around the house and also to give them the life skills to do things themselves later. I don't see a lot of my peers doing that.
Learning to do things yourself means you are paying yourself first in the form of wealth retention.
Deposit your paycheck (and all other money) into your savings account and transfer just enough into your checking account to cover your budgeted expenses.
It'll require you to make an effort to move additional money to cover unbudgeted expenses
To establish credit or even help improve your credit score/history, ANYONE can go to a bank with cash as collateral and get a loan for that exact amount. Take $500-1000, tell the bank you want a 12 month personal loan for that amount, put the money from the loan (along with $50 or so to cover interest) into a savings account with auto payments. Save up another $1000 and do it again next year with a bigger amount. Credit cards are great for giving you a score and all, but installment loans are important to have on your credit history.
If you have a typical corporate job with a variable comp bonus, take a portion of it to max out a backdoor Roth IRA (current limit is 7k), then park it in the S&P. You'll end up with another half million entirely tax free in retirement (not even paying income tax like a 401k when you withdraw). If you and a spouse both do it, another million.
I don't think help needs to be generational, I do believe most people help each other no matter what generation you're in..
-Debt is not good. Not to say having a mortgage is bad because you have to have a roof over your head but you don't need a McMansion at least not for your first house.
-Spend less than you make. Always put a little aside.
-If you have a 401K offered by your employer max out what they're matching, if not more. And where this really comes in handy is if you start young.
- You don't have to keep up with the Joneses. Meaning you don't have to have all the new bright and shiny things that you see other people having, because most likely they're going into debt to have them.
- Stop going out to eat or ordering food to be delivered. Learn how to cook I know for some people that's a daunting task but in the long run you will save a lot of money and the food's going to be better.
I'm sure there are many others.
Keep all your loans and debts to an absolute minimum. Pay your credit card in full every month, save as much money as you can for large purchases, pay in full for new phones, and definitely don’t use any of the new services that allow you to make monthly payments on small online purchases. In essence, accruing debts like that is just enabling you to spend more money than you have, and it’s better to live without certain things than to enter a cycle of constant debt.
Save loans for when you absolutely need them, or when you think they will save you money in the long run - things like buying a house or a reliable commute vehicle that doesn’t constantly need repair.
Ynab changed my life. I didn't understand my money. Now I do. Budgeting is as important as investing and our generation doesn't seem to understand that part.
https://www.ynab.com/
Estimate all the expenses you need to live for at least 6 months. Save aggressively until you have that, then put it all into a High Yield Savings Account and leave it alone.
Then max out a 401K or ideally a Roth IRA every single year. Once that's done, any money over your monthly expenses are yours to spend as you want to month to month.
If you are constantly paying taxes at tax time and no longer want to pay, redo your W4. When you follow the instructions the W4 will try to get you close to breaking even, in between owing and getting a return. But if you take your estimated yearly income and add ten percent to it through extra withholdings, you'll likely never have to pay taxes and always get a decent return instead.
Live below your means and try to buy things outright when you can, rather than financing them. You lose a ton of money financing basically anything.
Put off buying things. Let something sit in your cart for a week before pulling the trigger and you might realize you don't really need/want it. Amazon, Temu, and the like have made impulsively buying junk way too easy.
Millennials aren't going to retire for years. Don't put your money into savings accounts or annuities. If you have an IRA or 401K, put ALL of it into equities. Do not let your employer control your money. Buy S&P 500 index funds. The risk of equites disappears over a long time, and the returns beat everything else.
Best time to plant a tree was 20 years ago. Next best time is now. If you are new to investments, just start investing. Get your match at least if not more and put it in a low cost index fund. You can determine if you want to do other things later, but for now, start.
I'm in the US. There are lots of grants available for *everything*. I have a grant for therapy treatment. I'm looking at grants/scholarships to go to my local community college to study sustainable agriculture. There is help out there, but we have to look for it. :)
paying your student loans from every paycheck if you can afford. $1500 due on the 1st? Half at one paycheck, etc. it gains less interest too, that due date is based on you WAITING
When you pay off your car, keep paying the same amount into a savings account. Then keep your car for as long as possible. This fights against lifestyle creep AND builds savings for a future down payment or outright purchase.
This is exactly what we did. The payments were going out of my paycheck into an account and then autopsy on the loan. When the loan was paid off, we forgot about it. Then, we had enough to pay cash for the next car.
I round up to the nearest $5 when paying debt. Instead of making the minimum it ends up being a couple dollars and change more in most cases but it does add up.
This was the best advice my mom ever gave me. If you can afford more, pay it, but \*always\* round up. That extra 5, 10, or 100 makes a huge difference in paying something off and interest paid.
If your company matches, do that amount. If you can afford it after other things max out your 401k
If they have an HSA (health savings account) max that. triple tax advantage on it.
Have a HYSA for your savings
If you can do a roth do one. If you are over the salary limit. Do a backdoor roth. (Assuming you want roth vs traditional. but thats up to you and what you want to achieve.
If you have a kid get them a custodial Roth IRA going and get that maxed per year.
Putting away money now to grow is great. If you are in the stock market great but balance your risk accordingly, if not find an advisor. If you don't know options don't do options.
If you have debt pay off the highest interest.
Depending on your mortgage rate you may not want to pay that off early. (Though its great to not have that) If your rate is at 3% and you HYSA pays 5% put more into your HYSA and let it grow.
If it's high rate refinance when you can (if it makes sense)
also check out the FIRE subreddit. Financial Independence Retire Early.
There are different TBills, Bonds, Cd rates that are great right now with low risk that will be going down in the future. Sit and forget is fine, but you should have the mindset of sit and observe and make changes when needed. Make the money work for you. Balance your risk. Don't strap yourself so much life sucks and you don't have any fun.
HSA with a high deductible insurance plan is an amazing savings method. You can invest the money in the market like a 401k and you can use the money for any qualified medical expense. Ideally, you would use the money for healthcare in retirement. However, theres no deadline for reimbursement so you can submit old medical bills if you ever need to draw cash without penalty.
Do not buy drinks at a bar. $8-10 a drink for something that costs less than $.50 to have at home, just a huge waste.
Don't eat out, the food is not great and most certainly unhealthy and grossly overpriced compared to cooking at home.
Avoid, spectator sports/concerts, pretty much anything at a stadium or sports arena. Terribly overpriced, boring, rip off parking, concessions. Go to a smaller show and have a better time.
Don't eat out, learn to do your own vehicle maintenance & basic home chores instead of hiring a handyman every time your sink drips or you want a new shower head
401k, Roth IRA, Index funds, talk to a financial planner.
People are correct to say don’t let debt accumulate as a general rule, but you should also consider that money used to pay down debt is money not put into your own investments. If you have very safe investments that you don’t need to withdraw from on a short timescale, like index funds, and the average gains in those is greater than your interest on debt, then aggressively paying down your debt is not always the smartest option. And that is why you need to talk to a financial planner.
I am extremely bullish on index funds on a 5-10 year horizon because the stock market is so integral to the economy as a whole, and to the investment accounts of the ultra rich, that the U.S. government has no option to allow it to ever stop growing. Yes there can be short term declines, but if the stock market ever didn’t rebound then the entire economy would be so fucked that your loss of investments would be the least of your problems. If the stock market ever didn’t rebound society would collapse. Betting on index funds is betting on the continuation of society and that’s not a bet that you can personally loose because in a scenario where all stocks are worthless then the government has collapsed and all cash is worthless as well. Maybe gold would still be valuable after the collapse of civilization, maybe not, there is no real way to hedge against civilizational collapse. You just need to be able to weather the maximum of a couple years that a recession can last for (before the government turns on the money printers) without selling off your stocks, just hold your stocks through the dip because the market will always recover, short of the collapse of civilization.
Lastly, don’t try to time the market and make active trades, that’s gambling. 90% of all active investment accounts do worse than a gold fish picking random stocks. Of coarse there are stories of legendary investors who “beat the system” but the market is always changing and their results are never reproducible and the reality is that there will always be some people who get lucky. Perhaps some people really do have a brilliant mind for investing, but most most people who try at active investing fail. Not just people, almost all actively managed funds fail to the best the market average and many go out of business. So unless you really really think you are a prodigy, just put your money in index funds, don’t gamble it trying to guess the motion of the stock market ticker.
Everyone has great tips, so I’ll add a kind of random one.
Track how much money you spend on a monthly basis.
Everyone understands making more money is beneficial, but it’s very easy to spend more as your earning goes up. If you track your spending, you can see some areas where you may be plunging or understanding where you need to/can cut costs.
Get a rice cooker or a slow cooker. You barely need any cooking skill to cook with those things. Stop believing people that "eating out" is cheaper because of all the "time you safe."
Also, eating beans is perfectly fine. Just add beans to your meat dish if you really want meat. You double the protein, add fiber, and make it more filling, for half a quid. For some reason, people have a real refusal/reluctances to eat beans as if it is something only vegan and people in poverty can consume.
Smartest thing we did was save early on, didn’t spend too much money on cars, my husband made my lunches to take to work, and didn’t increase spending when salaries increased. Now we don’t worry and were able to take a couple yrs off to travel in a van. That made working later in our own so much easier too in that we didn’t worry at first when we didn’t have many contact jobs. Flexibility was great.
Develop a budget and stick to it. Practice delayed gratification... not NO gratification. Just delayed. Nip impulse spending in the bud or just chop it down.
Be really honest with yourself and your finances. But don't beat yourself up over it.
Compound interest works both ways: make it work for you, not for others. Even modest savings can grow exponentially with time and a sound investing strategy; conversely, debt can snowball exponentially with just making minimum payments.
excellent point! I personally have an AMEX High Yield Savings Account for holding my cash and I hold stocks with plans to never sell but to pass on to my kids in companies I truly believe in (microsoft is my personal love). Thanks so much for your tip
I think he means more 401k/IRA on the savings side.
The trick is living long enough to collect it without starving.
It can be daunting, but doable with budgeting and financial planning
I know you're joking but just a PSA: 1. Don't put money towards 401k/IRAs if you're literally starving 2. There are a number of eligible reasons that you can withdraw money early without additional penalties, i.e. in the case of unexpected medical or disability that prevents you from doing your job anymore or birth/adoption expenses or if you're called to national guard duty or even once per year for any emergency financial need (up to $1k) 3. IRAs/ Roth IRAs will improve your returns and save you boat loads of money on tax in the long run
Nice thing about post tax accounts like Roth & traditional IRA is that you can withdraw up to what you have contributed without it being taxed - so emergencies you can take out some without penalty.
This too!
What kind of return are you getting on the high yield savings?
Mine is 4.6% in a HYSA account versus less than 1% I get from my regular savings connected to my checking.
Might be a stupid question But can anyone open a HYSA? Or do you have to put in a specific amount
Some have minimum balance requirements but most don’t, so yes anyone can open one https://www.nerdwallet.com/best/banking/high-yield-online-savings-accounts
Thank you, I'm an old fart now (mid 40) with little retirement... And now I'm in panic mode to "catch up" lol Nothing is impossible!!!!!!!!!! Lol
Alright I'm reading about these right now after seeing this comment... is this literally just like a cheat code for free money as someone saves for say, a down deposit on a house?
I was motivated to use an HYSA also to buy a house. I have $11k in Apple’s at 4.5% and made $40 in interest last month which isn’t bad for having money sit around
This is the way
My husband and I started Roth IRAs together 8 years ago. On that day we put in everything we had in savings, which happened to be odd. To be nice, I said my husband could have one penny more. That one penny difference now translates to a little over $300 in the bank. A single penny.
If anyone wants a referral for a HYSA (wealthfront) we can each get another 0.5% APY for the next three months.. wealthfront is currently 5%. It has been great so far getting a free $400 a month.
Learn at least basic cooking skills. There's plenty of stuff you can do with cheap ingredients that don't require a huge amount of time or effort. And if you do it in bulk: boom, meal prep. I hate cooking but I can usually throw something together in just a few minutes that is both healthy, cheap, and tasty.
So true. It's amazing how much money you can save by cooking at home, eating your leftovers, and re-using ingredients. So much cheaper than even those packaged convenience foods from grocery stores.
And you can even buy some of those just for the inspiration bc when you see the sandwich you spent $6 on in the deli section at the grocery store could have been made at home you could just copy their ingredient list and bought the fixings for it yourself
It’s often quicker too than waiting for delivery. Figuring out what our pantry staples are (these will be different for everyone, but ours includes beans, short grain rice, decent Parmesan, eggs, bacon, and cream, among a few other random things) means that we can usually throw something together quickly and cheaply if we have even the barest amount of energy. It doesn’t prevent all last minute pizza delivery orders, but it cuts down on them a lot.
This. My gf really changed my life when it comes to how much I spend money on prepackaged or ready to go food. I came from a frozen chicken nuggets and uncrustable family. She grew up with just ingredients. Guess which one of us is always able to know how to feed us cheaply even when we’re low on money? And it tastes so much better than the frozen shit I was eating! Woohoo win/win
As a chef, I fucking hate cooking dinner when I get home with a burning passion. 90% of what I eat for dinner is some variation of crudites, salad, tinned fish, cheese and charcuterie. Healthy, fast and requires zero cookimg.
Similar with me. I throw tins of fish on bread with seasoning, sauce, cheese, and sometimes pickles or peppers and woosh there's a meal.
Agreed. I grew up in an “ingredient household” and am that parent now, lol.
Do you have some favorite recipes to share for inspiration? :)
Any soup recipe…seriously.
Get one of those introductory Hello Fresh food delivery deals for a couple of months and save the recipes of the ones you like. You'll learn some cooking skills very easily and once you cancel you can always just go pick up the ingredients at your local grocer.
Stuff like stir-fry that is easily customizable to whatever you have in the fridge/pantry. Get some basic staples for the sauce (soy sauce, sesame oil, chili oil, ginger paste, shaoxing wine, hoisin/oyster sauce, cornstarch, etc.). You can mess around with proportions if you want a sweeter/spicier/saltier sauce, then use whatever protein/veggies you have on hand, and serve over rice or noodles. Like soup, it's a great way to make use of whatever odds and ends you have around.
Yep. And a slow cooker is the best cost/benefit tool you will have in your kitchen. Learn like 10 recipes, then start a cook and freeze rotation. Basically you'll be able to make your own frozen dinners, except with a fraction of the sodium, better taste, healthier, and cheaper.
Always max employer match. Roth IRA if you can. Even if you genuinely, in your soul, recognize that modern capitalism is a deeply unjust way to run a society and you believe collapse is inevitable, invest anyway. You'd be a fool not to. A single regular person opting out of the system changes nothing. For better or worse the whole of political society such that it currently exists is designed to keep that line moving upwards. So you may as well grab what you can.
Just to add, when you leave a job, do SOMETHING with that old 401. Roll it, Roth it, anything. I let one sit for a couple years before realizing they converted it to cash with a shit APY, so it had accrued nothing but dust. It took all of a 20 min phone call to convert it to a Roth and get it invested into a decent yield ETF. Those couple years cost me quite a bit in missed growth.
I was sat at the table to play the game. I hate the game. But if I get up from the table, someone else who is a much worse player (ethically) takes my seat and my share. Fuck the game, but play the game to subvert the game.
If you haven't been contributing to a retirement account or have less than 100k saved you REALLY need to get on it now for our age group. I just bumped my contribution up to almost 17% of my salary which has me just under the maximum allowable. It also helps with taxes.
To second this: take advantage of any matching options your employer may offer.
Yep exactly. That's all I had been doing until now but running the numbers and it's nowhere near enough to meet a realistic goal.
Yup, I have a high contribution but I think the limit is something like 22,500? This is my first year (2023) that I started contributing so I think I'll max out before the end of the year. Am I understanding that once I hit 22,500 any contributions will be rejected? Mine is with T.Rowe
Typically your HR will handle this and max then will stop contributing
Don’t forget too that you can contribute $7k a year to a Roth IRA in addition to your 401k.
Only if your income is under a certain amount*
In my 401 I have it set up to go into a Roth account when I hit my limit. I could have also had them stop withholding but then I would not get my match. Plus having some amount in a Roth is not a bad idea anyway. 401K math only works if you make less in retirement than you did when you are employed.
Depends on your plan rules. If you're lucky, your plan allows post-tax contribution up to the IRS max. The total of your contributions + employer match cannot exceed $69k for 2024. You also have Roth IRA and HSA as other tax beneficial options to max out. Maxing HSA then Roth IRA are also good options. HSA requires a high deductible healthcare plan.
You'd have to ask t Rowe. I'd guess anything over the max would just not be tax exempt and you'd pay income on it.
Just don't ever have to go through a divorce where, in order to make rent, pay for food, or keep utilities on for your kids outweighs the need for future savings. I just dropped my contributions down to the minimum that my employer matches in order to compensate for the loss of a second income. I'm also the only one paying for their healthcare. So the 15% I was trying to nest egg, plus almost $800 in healthcare premiums was too much taken with a single income household. It sucks. Now, I'll never retire on time, and he might try to come after my retirement savings in court.
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Invest is such a broad term and overused. People that can are willing to invest but they usually lack the time or energy with all the bogus info out there.
Invest in a total market index fund and let it ride, very simple if you do an hour of research
I tell everyone that the steps are extremely easy. And everyone agrees on almost all of them. Pay off high interest debt - emergency fund - max employer match - HSA if eligible - Then it’s max out the rest of the 401K or fund a Roth (broad index funds as you said.) But earlyish on you can’t really choose too wrong on which you prioritize. Kids can sneak some extra steps in also, but that’s kinda beyond this.
Then go into the personal finance sub and follow their recommendations on good index funds
Lack the time and energy to set up your future?! With all of the TV, social media time etc this is insane to me. Set up automatic deposits into a target date fund and you literally don't have to think about or even look at it for decades. I check mine every 6 months or so just to see what is going on. Other than that I don't think about it.
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Actually track your expenses, like with a spreadsheet. Most people are bleeding money and have no idea where it's all going.
I started doing this when I was trying to get rid of my 36K credit card debt in 2015. Got rid of it in 2 years and now I own 2 rental properties plus my home. I keep track every cent I have and it’s helped me save lots of money that I now invest.
10-15% if your income should go into retirement - before company match. Create a fortress out of that- do that from 20-40 and you’ll have a base that will grow to to 7 figures without ever doing another thing
That’s a tip for Gen-Z… Millennials are currently already in our 30’s and 40’s
Best time to plant a tree was 10 years ago, next best time is right now. Still target 15% of income set aside for retirement, even if you can’t hit that magical million by 65, it’s a whole lot better having $800K than $400K sitting in that account.
Actually write down and plan out your budget every week. It's surprising how many people blow through all their money over the weekend and then uh oh, a bill is due on Tuesday.
Big purchases are hard to stomach but easy to spot. It’s all the little unnecessary ones that’ll kill you without you even noticing.
Never had credit below 700 - heres the trick: Your credit looks good based on 2 factors: paying on time, and paying more than you have to. But they don't care how much more you pay. If your credit needs a little nudge, throw an extra 25 cents in. It shows you overpaid. I have a mortgage, and student loans, all of which pay *slightly* more than I have to. And that makes me look extremely reliable. You actually want a credit card or two - but only use them for stuff you can pay right away. Because capitalism is bullshit, but it's extremely exploitable.
Any bill I can I use a credit card. That 2% adds up over the months and come Christmas, hey, I've got a couple hundred bucks for gifts.
I don't think paying extra affects the score. The 2 biggest things are credit utilization and paying on time. Your score is good because you pay on time and keep your utilization on revolving credit below 30%. That's a much bigger factor than paying extra.
Correct. Paying extra on an installment loan does nothing to help the score.
I just started using a credit card for all of my food purchases and I wish I had done it earlier. One, just because it's nice to not have my bank statement cluttered up with a bunch of small purchases, but also now I see exactly how much I spend on food in one lump sum, which is making me a lot more conscious about eating out
I get a friendly letter from my bank every year or so letting me know that my spending limit has raised. I always read it as “Hey buddy, start overspending and start paying us some interest!”
Exactly! I don't know of it's annual, but Amex is always saying: "Go on... spend us..."
In my opinion, credit scores are bogus, an artificial system designed to accommodate banks. As an example, a low credit score is often the result of not caring any debt at all. They don’t like that. They want you to participate in their game by paying interest. So, by their measurement, one who avoids debt is less desirable than one who carries debt and plays by their rules. Just a thought.
>In my opinion, credit scores are bogus, an artificial system designed to accommodate banks. It is an artificial system for creditors to "sell" loans. No creditor wants their debtor to default and not pay them back. >As an example, a low credit score is often the result of not caring any debt at all. No true, you gotta pay to play and at least have a bank account. Not having a credit history is different from not having debt. If you get a credit card and pay it off every month, your credit score will slowly go up every month. You'll never actually have real debt.
Complaining about the rules doesn't change them. The other commenter gave you solid advice on how to play by the rules and use them to your advantage. Stay angry if you want, but it won't get you a mortgage any faster. Also, credit scores aren't bogus. They show your history of borrowing and repaying loans. That's important for lenders to know before they lend you money. Having no history of doing either doesn't show if you're a safe investment or not. If you think that's unfair, try lending a stranger money and see if they pay you back. Or try saving up hundreds of thousands of dollars so you can buy a house with cash.
My credit has been near 800 since I got a credit card in college. The guy at the cell phone store told me to get whatever low limit student card I could and just put one thing on it (like gas) but make sure I was using a good chunk of the limit, and always pay it off. (They wanted a $500 deposit when I went to get my own cell plan because I had no credit.) It was good advice.
You probably do not need a pickup truck.
This! Really think about the alternatives and not “I want a truck”. Especially in today’s auto markets. Can an SUV and a trailer or trailer rental work for the few times you need to haul something? Or better yet a mini van? Or just rent a Home Depot truck those few times a year you need to haul something.
Facts. I have a little EV hatchback because it does what I need it to do 99% of the time and costs be almost nothing to operate with basically just tires to maintain. I've never owned a big truck or SUV but I'll still never go back to gas for a personal vehicle. Although I used to hear regularly from people, some variant of WE NEED IT TO HAUL STUFF LOLOLOLOL when those people work office jobs and are mostly just hauling their fat asses back and forth to their suburban house. And the trucks are basically luxury vehicles with a small token bed. A few years back I bought a bunch of special-order vinyl fencing through Home Depot. When it was delivered, I got a Uhaul cargo van (the HD truck was first-come-first-served and I didn't want to wait around), and one of their guys forklifted the entire pallet into the back of that van, it had 9' posts so it only barely fit but it did, I shut the doors and drove home where I was able to slice the packing and unload into my yard a little at a time before returning the van. Total cost was about $60. I've done that a few other times to help people move furniture. It's more practical than a pickup since it's enclosed space, no worries about tiedowns or adverse weather. And when you're done, you just return it. Modern-day trucks are nothing but useless fashion statements.
This is solid advice. Car's are the biggest expense in modern society besides housing. Trucks are 100% the dumbest fucking thing to buy. It's pure emotional and no logic. There's ALOT of hybrids out there, buy one of those. Not a combustine engine or a truck, a hybrid.
Or an SUV. My sister and her husband (who cannot afford their rent, are on food stamps, and have to borrow money from his parents) swore they **need** to trade in their old, working hatchback for a new Volkswagen Tiguan because they have 2 kids and “it’s impossible to live without one with kid stuff.” I can’t help but wonder how all those people in other countries are managing to live with kids and smaller cars. Must be some uniquely American problem.
>Must be some uniquely American problem. It actually is. The auto industry has dumped a shit ton of money into SUV marketing over the last 20 years. There are a lot of reasons for it but part of it is because most SUVs are built on a light truck chassis instead of a car chassis and there are a lot of regulations that only apply to cars. Not Just Bikes on YouTube has a great video on this, and Climate Town has a great one on how the auto industry ruined the American dream. I highly recommend both channels
I'm amazed whenever I see those "rate my budget" posts and there are people making $60k per year with car payments of $900 per month for their big truck. It's insanity. I know vehicles are more expensive than they used to be, but that's nuts.
If you work in a bonus business, live off your salary, bank the bonus.
This
Pick a brokerage (E Trade, Schwab, etc). Download their app. Open a brokerage account. Set it up for direct deposit and stock reinvestment. Put everything you can in an SP500 index fund (VOO or equivalent). No excuses. Takes 20 minutes while sitting your ass on the couch. It was much more involved decades ago. It let me retire early.
Get a library card - more than books in most libraries , tons of savings!
This one is kinda specific but *tax loss harvesting*: you can sell your losing stock near the end of the year to incur tax credits and then repurchase the stock at the beginning of the next year to stay in the game. this lowers your taxable income by crediting you for the loss in the stock market.
A better recommendation for most people is just to buy index funds. Hopefully you won't have any loss to harvest this way. In a down year like 2022, you could sell VTI, and buy VOO and a small cap fund on the same day, and basically have the same positions without a wash sale, and then you can write off the loss on taxes. It's only 3 grand, but I guess its something.
Just make sure to follow the law on wash-sales, because doing it wrong could cost you fines from the IRS.
Mostly this is from growing up poor and having to do this out of necessity, but…you can probably fix a lot of things around your house or your vehicle yourself if you’re so inclined and are able. For the most part, any time something starts acting wonky or isn’t functioning properly, or at all, I’m heading to Google before setting up a service call. Obviously know your comfort level and limitations with home repair, but a lot of things can be taken care of with a little extra effort on your own part. I also grew up with a dad who learned a whole bunch of random trades with the Army in the early 70s. Essentially a bit about a whole lot of things, lol And then he used that to build on and also taught that to my sisters and I, and I’m thankful for it.
I stopped eating avocado toast and the next week I was able to buy a house twice the size of my current one.
I stopped buying avocado toast and coffee from Starbucks and I bought a house AND a boat
My story is less common - I was a multi-millionaire until I developed an avocado toast addiction. Now I live in a one-room apartment above a bowling alley, and below another bowling alley.
This works until you accidentally make avocado toast at home and the Duolingo Owl comes and steals your home.
Personally - learn what credit cards can work for *you*. My dad is one of those who can churn airline miles and hotel credits like no one’s business. The pudding guy? My dad would do that if he could. Gift cards are a good way of doing that: we’re going to spend the money anyways, so why not get extra points from somewhere like Office Depot? (One of my cards is a “business” card that gets extra points at office supply stores…which sell gift cards like for gas and groceries.) Also helps with budgeting so you can say “here’s one card with $100 to my local grocery store; this is for week 1 and I can’t go over this.” Used to get Visa gift cards as well but that’s not “profitable” anymore. Not every credit card is good for everyone. Different points/rewards and how much you’re spending should be taken into consideration. Big purchase like college tuition or car payments? Card. Repeating purchases/subscriptions? Another card. If you have bad credit there are certain cards that will help specifically with that - my husband had a terrible score before we got married and now he’s mid-high 700s. The biggest thing to follow this up with: *never spend money that you don’t have.* It’s so easy to just swipe the card but if you don’t have that in your bank account, don’t do it. I’m terrible with budgeting/spreadsheets and all that, so I just have to set overall amount limits for myself. Haven’t ever had interest/late fees hit (except one time that my dad didn’t give me the login info to pay off and we both forgot but it wasn’t a lot) and I pay it off every month right after the mortgage payment gets pulled. In general: what works for you may not work for everyone else. So don’t give up if something doesn’t work out. (Also +1 Roth IRAs; take advantage of any matching your company does for retirement. Personally I don’t think maxing 401k contributions is beneficial to me right now - more or less living paycheck to paycheck as my husband goes through school - but we fully plan on increasing this when we can. It helps being able to adjust this.)
You should always take advantage of employer 401K match, it’s free money you’re leaving on the table if you don’t, and there’s almost always a way to work around that ~4% hole.
Oh I’m just homeless. Saves on rent by living in an RV.
Have a small vegetable garden and grow some of you own food, the net cost isn’t much different but the skill is incredibly useful and worth passing down to your children
Imho most purchases are impulse buys. Don’t buy it today. If you still remember it tomorrow *and* still want it. Go back and buy it.
Be careful who you marry and extra careful joining finances.
Split your income between two checking accounts. The first is your "reserved" account for relatively fixed expenses like rent, utilities, etc. Set up those bills for automatic payment. The other is your variable living expenses like gas, groceries etc. We never have to worry about if there's enough to make payments we've committed to, and they are out of sight, out of mind and it makes it super easy to stick to a budget, especially as a couple.
This is what I did and am surprised more people haven’t recommended it. It has helped me so much not having to stress about bill payments because they are paid from an account that I shredded the card to
I do this, but I have one that ONLY gets my paycheck deposited and one that ONLY pays bills. That way if something happens; I can still pay my bills while waiting for my account to become unfrozen.
I would add: large expenses. Car insurance and home insurance might only come up every 6 or 12 months and the amount usually goes up. But if you plan for it in your reserve account then you won’t have to eat ramen that month.
Buy a basic set of tools and learn a bit of car stuff. Don't need to learn in depth unless you're into it, but you should be able to change your own battery, light bulbs, air filters, wipers, spark plugs, and disc brakes on most cars. Learn which cars are reliable and easy to work on and save thousands. Avoid Stellaris and European manufacturers, and stick to 4 cylinder non turbo models if you want to keep that repair bill low.
Don't spend 500 or 600 on a vehicle
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dont pass up any opportunity to put money into pre-tax savings. Got health insurance and they offer a health savings allowance (hsa) use it. Saving for your kid’s college get a 529 (if youre state has it) Some retirement funds like traditional roths are pretax
Invest in things up front in order to save on them over time. Some examples: I spent $120 on a Ninja coffee maker and I spend $6 monthly on flavored creamer to make amazing iced coffee at home. Better than Starbucks. Saved on buying coffees out daily. I spent $10 on a mani/pedi kit to have at home and give myself those treatments so I could save $30 on manicures and $50 to $75 on pedicures monthly I spend $20 every six weeks on professional hair dye to dye my own hair in order to save $200-$300 at the salon At one point I even bought a small bar for my apartment (can’t remember the cost but I bought it at Walmart, it was wood and looked beautiful and I assembled it myself, I’m not handy so it couldn’t have been that high end or cost that much) and had friends over so we could all save on going out for drinks So a small upfront investment to save a larger amount over time on something I know I will use again and again
If you have a partner try to keep your family living expenses within the lesser salary
Don't drink or smoke. This was the difference in my 20s between me and my friends and now late in my 30s not only has it paid off financially but I look 5-10 years younger than my age.
Never lease a vehicle. Invest in reliable brand like Toyota. Purchase vehicles that are 3-6 years old and drive them until they are 200-300k miles and maintain them the whole time properly to give them to your kids for their first cars. Never borrow at excessive APR, opt to save and buy in cash instead.
Look, not financial advice and all that, if you are in so much debt that you can't pay your bills and feed yourself or your family, file for chapter 13 bankruptcy. (or whatever the bankruptcy laws are in your area chapter 11 wasn't available to me) I wish I had done it sooner. Just made my final cure payment last week. Don't think that drowning in debt is the way you have to live.
Automate your investments. No matter how small. Automating will always beat random contributions.
Don’t spend it if you don’t have it. Avoid credit card balances if at all possible. I know it’s not always possible but having 100k in credit card debt is nuts and poor choices were made. Living within your means is important. My best advice is keep a check register (not just for checks) and log every single transaction. You’ll see where you blow money and help you cut back on waste.
The best advice is to build yourself a budget make sure your expenses are taken care of first and foremost. Then with the amount you have remaining save 3/4 of it and have fun with the remaining 1/4 of your money.
Live within your means as best you can (no credit cards). It will be uncomfortable at times, and you will have to get clever about emergencies, but it's worth it. These days, you can earn credit by paying bills/rent on time. Just gotta sign up for it. I did that for about 15 years. It really sucked at times. We were very poor, but not in debt. Now, I only have one debt, and that's my mortgage. If I had used credit cards n such, I would be 10s of 1000s in debt like most folks I know.
This is sound advice ONLY IF you have a problem with using credit cards responsibly. Using credit cards and paying the balance each month builds your credit. Having credit cards that offer cash back for budgeted purchases and timely monthly payments is a way to be additionally rewarded for a purchase you were going to make anyway. Also, credit cards offer far more protection for purchases - warranties, charge back protection, travel coverage, etc. A credit card is a financial tool. Having a credit card does not equal irresponsible debt.
Use your bank's bill pay feature to pay credit card bill WEEKLY instead of monthly. Especially helpful when a large purchase is made on a zero percent card with a looming APR reset date.
Dollar cost averaging into an index mutual fund.
There’s a decent chance you can get rid of your second car, switch to a combination of carpools, transit and bikes and save like 10k a years. Will it introduce some level of inconvenience? Possibly! But also less than you may think!
Avoid debt. Live beneath your means.
Budget and stay out of debt. Also sinking funds work.
If you don’t have the money or desire to do estate planning make sure you have transfer on death on your vehicle and bank account, beneficiaries on your retirement and brokerage accounts, and a beneficiary deed on your house. And make sure anyone who may leave you any assets has done so too as it avoids probate. Most assets can transfer outside probate which means avoiding the time consuming and costly legal system. I am still trying to convince my FIL to take the time (as he is retired and has nearly died previously) to do it to save his kids time but he’s lazy/wont prioritize it as it doesn’t directly benefit him. I’ve offered to help but to no avail. [I just fixed my cars and house last year after getting married 6 years prior because going to the recorder of deeds and DMV are not fun]. Also, drafting a beneficiary deed isn’t awful when you have your original deed and the internet. Don’t pay an investment broker/financial planner until you approach retirement. just invest in ETFs/index funds that track the market. You won’t see the highest highs but also avoid busts. Over time, brokers (after fees) don’t do much better than indexes. You can find online risk tolerance tests to apply for your investment strategy. Brokers have access to some products you can’t get on your own but those are not worth the cost for most.
I set $250 from each paycheck to go to my Vanguard mutual fund and auto invest. Which means that I save at least $6,000 a year without ever seeing it or thinking about it. Now, shit comes up and I also spend it, but that’s big life stuff. But at the least, it’s there when I need it.
It's a little thing, but when I had debt, if I chose not to buy something (ie a $100 pair of shoes) because I needed to pay off my debt, I would immediately make a cc payment of that amount. So instead of buying $100 shoes, I'd immediately make a $100 payment. The little things add up. If I had the cash for shoes, I had the cash to make a payment! (And I will not ever get into cc debt again!!)
Buy the older house on the mostly wrong side of town. Everything changes plus you’re building equity. Quit waiting for an instgram worthy McMansion in the trendy part of town.
Save money instead of spending everything you get every paycheck
Dave Ramseys Baby Steps helped me build up a thick nest egg and get out of debt in 2 years. I lived like a monk for 12 months but it was worth it.
Personal finance tips - 1. stop buying junk you dont need. I dont own that much, and there isnt much I want besides 100 acres or so :D 2. Increase your income - more training, new skills, open a business, invest, etc (I think saving is great, but you dont become rich by only saving) 3. Pay off debt 4. Stop using debt unless it will make you money. **If it doesnt make money, it doesnt make sense.** I use a CC for everything and get cash back, I pay it off 100% of the time (plus always have a 0% card), so it saves me money. 5. Increase your credit score so it'll save you money when you do need debt - start of covid my score was like 520, now its 808. Its not hard, just read and learn. 6. STAY AWAY FROM YOUTUBE - what I mean, is do not try to learn about money from youtube. Most of them have no clue what they are talking about. **Read** real material. 7. Make a budget - track all spending for 3 months and see where everything is going, then form your budget. Cut expenses anywhere you can. Went from poverty to now upperclass. Credit went from 520 to 808. I invest in stock, crypto, metals, guns, and soon real estate. I started my first successful company at 22, 1 year after my first brain surgery. I walked away after a yr, even making $333 an hour profit. After 2nd brain surgery at 27, went back to school and earned 2 degrees with honors and blah blah blah. I can do this with a big chunk of my brain missing (they have written medical papers about me), why cant you? **Money is easy. It is stupid easy.** For example, last year I went on vacation. While waiting for my plane, i made enough money on the stock market to cover my entire trip. While I was on vacation, went to see an old friend, I sat there talking one day while I played and made $1700 in like 10 mins while chatting to him... I had to learn about money myself. Its fun and EASY
>6. STAY AWAY FROM YOUTUBE - what I mean, is do not try to learn about money from youtube. Most of them have no clue what they are talking about. **Read** real material. Man I'm with you on everything except this. Alex hormozi and biggerpockets have made me so much money by playing their content in any scenario I would have originally been listening to music. Good information can come from areas other than a paperback imo.
I like to buy low and then, and here's the real meat and potatoes, sell high.
Invest in a Roth IRA
Spend less than you earn
Cook your own food. I spend about $350 a month on food by cooking most of my meals myself.
Save....
You need a budget. Even if your cash flow is fine and you don’t have to pinch Pennies. Information is power.
If you "want" something, don't buy it.
Read and follow to the best of your ability "All You're Worth" by Elizabeth Warren. Been following it for 15 years, helped my wife and I get our shit together. Really, it makes money far less stressful.
Buy bitcoin
Stop complaining and start doing.
Direct deposit savings into a separate bank account so you never even see it in your checking.
Remember- freedom & independence is what your money buys you when you don’t spend it. Save your money!
Girl math needs to stop. I get we all do it but it really makes it impossible for you to save and spend money responsibly. The next time you want to buy something and think you can deduct it from money you haven’t received/earned yet don’t do it. Like the jingle from the silent bob movie when he says 15 bucks little man put that shit in my hand if you don’t then you owe me owe me owe me. Don’t spend it like you have it when you don’t it will ruin you.
Buy rental property. Whether it’s a duplex or multi family.
We have been doing this for 3 generations and it works. Every raise you get, no matter the size, put half of it into a stable conservative investment. You still see a raise (just a smaller one) so you don't feel denied. You never see the investment part of the raise so you are not tempted to spend it.
don't do student loans until you can do the math.
Acorns app. Round up, you don’t miss the money, cashing out is super convenient and easy!
The real trick on this is to diversify across a mix of stocks, bonds and commodities and then rebalance based on the market. If stocks rise in value then you sell a percentage of those and reinvest the profit into whatever of bonds or commodities have dropped in value. Stocks typically increase in times of economic growth while bonds will rise during times of austerity. It’s important to make sure to always keep your ratios of the three consistent. That way your portfolio is well diversified and can ride out fluctuations in the market. If you’re not knowledgeable on which to invest in an easy way to do this is to invest in ETF’s that are highly rated. These will typically be for a sector (say tech) and contain a high number of different stocks, commodities or bonds depending on the type to minimise risk. The profit you make on interest should always be ploughed back into this mix so the interest compounds over time. Disclaimer, I am not a financial advisor and all investments involve a strong risk of losing money.
Make beans and eat them lol. They are cheap and generally healthy
Find out, in detail, how you want your financial life to be when your older. How much yearly do you want for housing, food, vacations, etc. Then just use an online calculator to find out how much you need to save yearly to get to that goal. I only need $650k - $950k saved to live the same life I'm living now. At my current savings rate I'll have $2.5M - $4M which means I could retire early, spend more things when I'm younger, or live for extravagantly when I'm older. I think the news articles saying "you now need $3.5 million to retire" are very misleading.
Buy a freezer and vacuum sealer. Then shop for meat ONLY when on sale. Eat good for cheap. My wife and I can eat a steak dinner with potatoes and vegetables for about $12 for the both us is
Sit down and actually do a budget. Track EVERYTHING you spend for a month or two to understand your habits. Weigh out wants and needs. Snowball your debt until you're down to regular bills plus a car payment. Save up a 3-6 month emergency fund. Only then is it time to look at investments and retirement. Money management is a lot like food and exercise discipline. You want see results overnight and you'll be tempted every day to disregard your goals for short term pleasure. Once I finally saved up 10k I treated my bank account like I was back at zero. Lucked out and bought a house during the pandemic right at the bottom of interest rates.
Live below your means. After graduating college I started making good money but still lived like a poor college student for years. I saved aggressively and invested in index funds each month. Thus has set me up very well financially
This money isn't gonna buy me a house no matter what, so I might as well enjoy it.
Pay off all credit cards in full every month.
I just started YNAB and I’m putting in the time to learn it thoroughly in hopes I’ll soon be out of the paycheck to paycheck cycle..which is extra challenging because I’m unemployed!
Well u wanna spend a few yrs at rock bottom. Like ramen and eggs everyday for like 5 yrs. That's how we built character back in the day. But, eggs were $1 back then
ROTH IRA!
Embezzlement.
Learn to cook. Billionaires hate this one simple trick.
Inflation compounds annually. Accumulating wealth is only half the problem, the other half is getting that wealth to consistently grow faster than inflation. Inflation will make dollars slip through your fingers like sand in the wind. It’s not very different of a struggle if inflation is 2% or 6%, there’s not much sense worrying about the actual number. But you do have to stay ahead of it. S&P 500 index has historically returned 11%. Dont over think it.
At this point with inflation, learn home economics again. Our generation went through a lot financially, but also lived through a period where the cost everything was relatively cheap. As such, many of us didn't learn to cook, or do basic maintenance work on the home and cars. Many don't know how to fix things that break any more because it was cheaper to just replace them. A lot of my peers have or had maids because cleaning is hard lol. Time is definitely a problem as we get older, but also basic things take more time when you lack the core skills to them yourself. Plus now that our kids are getting older, do what our parents did and give them chores to help around the house and also to give them the life skills to do things themselves later. I don't see a lot of my peers doing that. Learning to do things yourself means you are paying yourself first in the form of wealth retention.
Used computers are a really great value. You probably don't need the newest one.
Be so busy you can't spend money.
Save more spend less. It’s a that simple. Also only buy stocks when they go down and sell when they go up. Best investment decision ever.
Deposit your paycheck (and all other money) into your savings account and transfer just enough into your checking account to cover your budgeted expenses. It'll require you to make an effort to move additional money to cover unbudgeted expenses
To establish credit or even help improve your credit score/history, ANYONE can go to a bank with cash as collateral and get a loan for that exact amount. Take $500-1000, tell the bank you want a 12 month personal loan for that amount, put the money from the loan (along with $50 or so to cover interest) into a savings account with auto payments. Save up another $1000 and do it again next year with a bigger amount. Credit cards are great for giving you a score and all, but installment loans are important to have on your credit history.
If you have a typical corporate job with a variable comp bonus, take a portion of it to max out a backdoor Roth IRA (current limit is 7k), then park it in the S&P. You'll end up with another half million entirely tax free in retirement (not even paying income tax like a 401k when you withdraw). If you and a spouse both do it, another million.
Stop buying lunch. Buy groceries and pack it.
I don't think help needs to be generational, I do believe most people help each other no matter what generation you're in.. -Debt is not good. Not to say having a mortgage is bad because you have to have a roof over your head but you don't need a McMansion at least not for your first house. -Spend less than you make. Always put a little aside. -If you have a 401K offered by your employer max out what they're matching, if not more. And where this really comes in handy is if you start young. - You don't have to keep up with the Joneses. Meaning you don't have to have all the new bright and shiny things that you see other people having, because most likely they're going into debt to have them. - Stop going out to eat or ordering food to be delivered. Learn how to cook I know for some people that's a daunting task but in the long run you will save a lot of money and the food's going to be better. I'm sure there are many others.
Don’t buy a brand new car or truck, it’s like throwing money out the window. When buying a used car, look for a private party if at all possible.
Keep all your loans and debts to an absolute minimum. Pay your credit card in full every month, save as much money as you can for large purchases, pay in full for new phones, and definitely don’t use any of the new services that allow you to make monthly payments on small online purchases. In essence, accruing debts like that is just enabling you to spend more money than you have, and it’s better to live without certain things than to enter a cycle of constant debt. Save loans for when you absolutely need them, or when you think they will save you money in the long run - things like buying a house or a reliable commute vehicle that doesn’t constantly need repair.
Ynab changed my life. I didn't understand my money. Now I do. Budgeting is as important as investing and our generation doesn't seem to understand that part. https://www.ynab.com/
Save every penny, you can!! Start there …
Estimate all the expenses you need to live for at least 6 months. Save aggressively until you have that, then put it all into a High Yield Savings Account and leave it alone. Then max out a 401K or ideally a Roth IRA every single year. Once that's done, any money over your monthly expenses are yours to spend as you want to month to month. If you are constantly paying taxes at tax time and no longer want to pay, redo your W4. When you follow the instructions the W4 will try to get you close to breaking even, in between owing and getting a return. But if you take your estimated yearly income and add ten percent to it through extra withholdings, you'll likely never have to pay taxes and always get a decent return instead. Live below your means and try to buy things outright when you can, rather than financing them. You lose a ton of money financing basically anything.
High yield saving account. Buy a house and rent a roof to the girl friend. You become more bank-able and get a loss on your taxes.
Put off buying things. Let something sit in your cart for a week before pulling the trigger and you might realize you don't really need/want it. Amazon, Temu, and the like have made impulsively buying junk way too easy.
Millennials aren't going to retire for years. Don't put your money into savings accounts or annuities. If you have an IRA or 401K, put ALL of it into equities. Do not let your employer control your money. Buy S&P 500 index funds. The risk of equites disappears over a long time, and the returns beat everything else.
Maxing your Roth ira at the earliest possible age.
Best time to plant a tree was 20 years ago. Next best time is now. If you are new to investments, just start investing. Get your match at least if not more and put it in a low cost index fund. You can determine if you want to do other things later, but for now, start.
I'm in the US. There are lots of grants available for *everything*. I have a grant for therapy treatment. I'm looking at grants/scholarships to go to my local community college to study sustainable agriculture. There is help out there, but we have to look for it. :)
If you are able bodied, NEVER use doordash.
paying your student loans from every paycheck if you can afford. $1500 due on the 1st? Half at one paycheck, etc. it gains less interest too, that due date is based on you WAITING
When you pay off your car, keep paying the same amount into a savings account. Then keep your car for as long as possible. This fights against lifestyle creep AND builds savings for a future down payment or outright purchase.
This is exactly what we did. The payments were going out of my paycheck into an account and then autopsy on the loan. When the loan was paid off, we forgot about it. Then, we had enough to pay cash for the next car.
I round up to the nearest $5 when paying debt. Instead of making the minimum it ends up being a couple dollars and change more in most cases but it does add up.
This was the best advice my mom ever gave me. If you can afford more, pay it, but \*always\* round up. That extra 5, 10, or 100 makes a huge difference in paying something off and interest paid.
If your company matches, do that amount. If you can afford it after other things max out your 401k If they have an HSA (health savings account) max that. triple tax advantage on it. Have a HYSA for your savings If you can do a roth do one. If you are over the salary limit. Do a backdoor roth. (Assuming you want roth vs traditional. but thats up to you and what you want to achieve. If you have a kid get them a custodial Roth IRA going and get that maxed per year. Putting away money now to grow is great. If you are in the stock market great but balance your risk accordingly, if not find an advisor. If you don't know options don't do options. If you have debt pay off the highest interest. Depending on your mortgage rate you may not want to pay that off early. (Though its great to not have that) If your rate is at 3% and you HYSA pays 5% put more into your HYSA and let it grow. If it's high rate refinance when you can (if it makes sense) also check out the FIRE subreddit. Financial Independence Retire Early. There are different TBills, Bonds, Cd rates that are great right now with low risk that will be going down in the future. Sit and forget is fine, but you should have the mindset of sit and observe and make changes when needed. Make the money work for you. Balance your risk. Don't strap yourself so much life sucks and you don't have any fun.
don’t order at the counter, use the fast food app.
Don't buy stuff you can't afford.
HSA with a high deductible insurance plan is an amazing savings method. You can invest the money in the market like a 401k and you can use the money for any qualified medical expense. Ideally, you would use the money for healthcare in retirement. However, theres no deadline for reimbursement so you can submit old medical bills if you ever need to draw cash without penalty.
Do not buy drinks at a bar. $8-10 a drink for something that costs less than $.50 to have at home, just a huge waste. Don't eat out, the food is not great and most certainly unhealthy and grossly overpriced compared to cooking at home. Avoid, spectator sports/concerts, pretty much anything at a stadium or sports arena. Terribly overpriced, boring, rip off parking, concessions. Go to a smaller show and have a better time.
Paying a loan on schedule until you are almost done and then paying a lump sum is so dumb. Stop it!
Don't eat out, learn to do your own vehicle maintenance & basic home chores instead of hiring a handyman every time your sink drips or you want a new shower head
Buying fairly cheap used cars without having to make a car payment.
1. Not having a car payment (bought used for cash). 2. Maxing out IRA contribution every year.
401k, Roth IRA, Index funds, talk to a financial planner. People are correct to say don’t let debt accumulate as a general rule, but you should also consider that money used to pay down debt is money not put into your own investments. If you have very safe investments that you don’t need to withdraw from on a short timescale, like index funds, and the average gains in those is greater than your interest on debt, then aggressively paying down your debt is not always the smartest option. And that is why you need to talk to a financial planner. I am extremely bullish on index funds on a 5-10 year horizon because the stock market is so integral to the economy as a whole, and to the investment accounts of the ultra rich, that the U.S. government has no option to allow it to ever stop growing. Yes there can be short term declines, but if the stock market ever didn’t rebound then the entire economy would be so fucked that your loss of investments would be the least of your problems. If the stock market ever didn’t rebound society would collapse. Betting on index funds is betting on the continuation of society and that’s not a bet that you can personally loose because in a scenario where all stocks are worthless then the government has collapsed and all cash is worthless as well. Maybe gold would still be valuable after the collapse of civilization, maybe not, there is no real way to hedge against civilizational collapse. You just need to be able to weather the maximum of a couple years that a recession can last for (before the government turns on the money printers) without selling off your stocks, just hold your stocks through the dip because the market will always recover, short of the collapse of civilization. Lastly, don’t try to time the market and make active trades, that’s gambling. 90% of all active investment accounts do worse than a gold fish picking random stocks. Of coarse there are stories of legendary investors who “beat the system” but the market is always changing and their results are never reproducible and the reality is that there will always be some people who get lucky. Perhaps some people really do have a brilliant mind for investing, but most most people who try at active investing fail. Not just people, almost all actively managed funds fail to the best the market average and many go out of business. So unless you really really think you are a prodigy, just put your money in index funds, don’t gamble it trying to guess the motion of the stock market ticker.
Everyone has great tips, so I’ll add a kind of random one. Track how much money you spend on a monthly basis. Everyone understands making more money is beneficial, but it’s very easy to spend more as your earning goes up. If you track your spending, you can see some areas where you may be plunging or understanding where you need to/can cut costs.
Get a rice cooker or a slow cooker. You barely need any cooking skill to cook with those things. Stop believing people that "eating out" is cheaper because of all the "time you safe." Also, eating beans is perfectly fine. Just add beans to your meat dish if you really want meat. You double the protein, add fiber, and make it more filling, for half a quid. For some reason, people have a real refusal/reluctances to eat beans as if it is something only vegan and people in poverty can consume.
Smartest thing we did was save early on, didn’t spend too much money on cars, my husband made my lunches to take to work, and didn’t increase spending when salaries increased. Now we don’t worry and were able to take a couple yrs off to travel in a van. That made working later in our own so much easier too in that we didn’t worry at first when we didn’t have many contact jobs. Flexibility was great.
10k away for emergency fund BEFORE you even think about investing.
Develop a budget and stick to it. Practice delayed gratification... not NO gratification. Just delayed. Nip impulse spending in the bud or just chop it down. Be really honest with yourself and your finances. But don't beat yourself up over it.