Personal Finance Guru Shares Tips Everyone Wants to Know


When it comes to money, debt, budgeting and investing, it can be difficult to know where to start. The path to financial success is different for everyone, and can even mean different things to different people.

For you, financial success may mean having enough money in savings to leave for your children and grandchildren. For someone else, financial success may mean being able to book as many flights as you like.

But in order to be financially successful as you navigate this expensive life, it’s important to understand your money and know the goals that are important to you.

Below, financial experts share their key tips.

organize finances

“So I think the first thing, and the biggest thing I would say, is get organized,” said Kimberly Palmer, a personal finance expert at NerdWallet. “I think keeping your finances in order is the first step to controlling your spending and savings.”

Finance has many moving parts. Some invoices come by mail, some by email, and some are debited directly from your bank account.

Palmer said he needs to track all the different financial factors that fluctuate and build a system that works for him.

“For some it means uploading everything to a spreadsheet or using an app that helps you track your spending, but whatever method you choose, most importantly, keep your finances in order. I think it’s about sorting things out,” she added.

Align your financial goals with your values

Gaby Rincón, personal finance coach and founder of Realistic Personal Finance in Los Angeles, says it’s important to make sure your finances align with your goals and values. .

Therefore, if you wish to retire early, you should make financial decisions that reflect that goal. Or, if you want to travel more, you should keep that in mind when deciding what to spend your money on.

“What I mean is normalize the fund. It doesn’t have to be negative, it doesn’t have to be deficit based,” Rincon said. So, just because you have a budget doesn’t mean you can’t budget for something you love, like a luxurious massage or a trip to visit family.

Instead, when you hit your financial goals, you know you’re working towards what you want and making decisions that you can actually afford.

Don’t try to “catch up with Jones”

Garrett Prom, founder of Prominent Financial Planning (Texas), said: “Too many people come to me who are spending too much money on things that don’t bring them joy in their lives.”

This could mean buying a house you can’t afford, or getting a car that’s technically out of your budget, just because your friend buys a big house. .

“My number one piece of advice is…don’t try to keep up with Jones. Live within your means. Make sure you’re saving and investing for your future,” Prom said. Told.

Instead, focus on buying affordable items rather than the latest “it” products.

Create an emergency fund — you can start small

According to experts, creating an emergency fund is a good idea.

“I think having an emergency fund is very important not only for unexpected expenses, but also for surviving big events like unemployment,” says Palmer.

Plus, having an emergency fund ensures that unexpected expenses don’t derail larger financial goals. Ohio accountant and financial activist Ashira Nelson.

How much you put in your emergency fund depends on what you are comfortable saving. So no, you don’t have to follow the old advice of saving three to six months. It would be great if it could be done, but it is also unattainable for many people.

“It’s fine to start with a smaller goal, like $500. It might go up, it might go down,” Palmer said.

No matter how much money you save, you can get through it without resorting to high-interest credit cards. It costs money in the end.

Consider opening a high-yield savings account

Palmer said you could consider keeping your emergency funds in a high-yield savings account.

High-yield savings accounts usually have higher interest rates than traditional savings accounts, so interest rates can help you make more money. She pointed out that it is important to know that the yields on these accounts are constantly fluctuating depending on market conditions.

“They can earn [around] 3% [annual percentage yield]By comparison, the national savings average is 0.37% per annum,” says NerdWallet.

You can open a high-yield savings account through banks such as Ally, Marcus by Goldman Sachs, and Citizens Bank. A Google search will reveal more options.

Moreover, opening one of these accounts in the current situation has double the benefits.

“Of course, right now we are in an environment where interest rates are rising, so it’s easy to earn some interest on your savings,” Palmer said.

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Marco Gaber via Getty Images

Experts say tracking spending is an important way to manage your finances, and it can be done with mobile phone apps and journals as well.

Stay away from shame-based financial advice

“It’s hard to talk about money in general,” Rincon said. “We’re taught, ‘Don’t talk about it.’ It’s hard, isn’t it?”

This means that we often don’t ask the questions necessary for economic growth or end up in the personal finance arena where we rely on shame to argue our point of view.

please think about it. You’ve probably heard someone say, “Why don’t you invest more?” or “Why am I still in debt?” There’s a lot of shame in phrases like this, Rincon said.

“I’m going to go out with you, so please don’t get too close. [money] I tend to hold onto negative emotions and shut down or give up,” she added.

A step towards a financial goal is don’t have to be all straight away.

concentrate on repaying high-interest debt

If you have debt, especially credit card debt or other high-interest debt, figure out a way to pay it off, Nelson said.

“I’ll list everything. I’ll list all your debts, I’ll list them all, then I’ll put them in order of highest interest rate, then I’ll go down the list and attack,” Nelson added. rice field.

It’s important to start with the debt with the highest interest rate, known as the avalanche law. Because it’s the debt you’re spending the most money on every month.

Nelson said you can also allocate extra money to your monthly debt.

“I’m passionate about helping people pay off their debts,” Nelson said. I believe in planning, [destroying] your debt. “

track your spending

According to Palmer, tracking your spending is a great way to see your cash flow and where your money is going.

“It also allows us to really keep an eye on when there are recurring expenses that we forget or don’t even really need anymore,” she said.

You can track your spending for a month to see your money patterns and obligations. You can do this in whatever way works best for you.

You can try Google Sheets (which Palmer and her husband use), Excel docs, or budgeting apps that automatically track your spending.

YNAB, Honeydue, and Mint are all popular budgeting apps.

You can also write down your daily expenses in a diary or check with your financial institution to see if there are any tools available.

“It’s important to make sure you know where your money is going. And I think that also applies to the bigger picture of feeling organized about your finances,” Palmer said. .

Consult books, podcasts, and experts for additional advice

“The best way to expand someone’s knowledge is to read, read, read,” said Nelson. “When I was trying to improve my financial knowledge, it was one of the things I did constantly.”

Rincón agrees, getting books on personal finance from your local library (and it’s free), financial experts posting tips, and sharing must-read books and must-listen podcasts. I said you can look to social media where you are.

Specifically, prom says “The Psychology of Money by Morgan Hauser, Rincon Get Good with Money by Tiffany “the Budgetnista” Alice, The Richest Man In Babylon by George S. Clason, Financial Feminist by Tori Dunlap ]is recommended.

If you need more advice and tips customized to your situation, you can talk to an advisor or money coach for additional guidance, Nelson said. Having a baseline financial knowledge is also beneficial when embarking on your financial journey.

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