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21 Tricks That Improve Your Personal Finance Skills


Personal finance skills are difficult to come by, but they are so important in the long run. In order to save money for emergencies or retirement, you must be at least decent when it comes to personal finance.

There are many personal finance tips on the web, but some are more important than others. Likewise, some of the personal finance tips have to be implemented before some of the more complex tips can be applied to your life. You have to start somewhere, and the basics are the place to do so.

21 Personal Finance Tips

1. Create a budget.

Most people don’t realize just how important a budget is when it comes to their personal finances. Skipping this step can be devastating to your finances, and can leave you with too much month and not enough money.

You have to know ahead of time how much money you can spend on each part of your life. Budgeting can further benefit your personal finance skills because, once you see where your money is going, you will be able to decide what you want to cut out of your budget. Without this useful tool, you will just notice a decrease in your bank account but have no real register of where the money went.

You have to be sure to include all spending categories when you are creating a budget. These categories may include:

  • Housing
  • Utilities
  • Food (both groceries and eating out)
  • Clothing for everyone in your family
  • Pets (food, medical, grooming)
  • Entertainment (or “extras”)
  • Transportation (vehicle payment, insurance, gas, maintenance)

2. Learn to negotiate.

When it comes to salary, interest rates, vehicle costs, or any other financial aspect, you should be comfortable negotiating. Never settle for what you think isn’t fair, but you also have to remember to be fair yourself. Most often, if you are respectful and fair with your negotiation, you will get a bit more of a break (or a salary increase).

3. Force yourself to separate needs from wants.

When you think that you “need” a new cell phone, reconsider that thought. Ask yourself if your current cell phone still works to make phone calls and send text messages and if you are still able to search and take pictures. If you answer ‘yes’ to all of those, you don’t “need” a new cell phone, you “want” a new cell phone.

This should be your thought process with all material items in your life. If your current item still works, then you should put it in the “want” category, and come up with a savings plan to buy it.

4. Educate yourself on interest rates.

Interest rates could cost you a ton of money over the course of your repayment plan. When it comes to any kind of loan (vehicle, mortgage, etc.) or credit card, you should check the interest rates before you ever apply.

Additionally, if you are offered a loan or a line of credit and the interest rate is higher than you’d like it to be, you can try to negotiate to bring the rate down. If the rate cannot be brought down, you should just pass on the loan or credit. High interest rates could mean that you pay double or triple what your original cost would have been.

5. Invest money wisely.

By investing your money, you are taking a step to grow your money in another way. This is one way to save up money for retirement, with a higher rate of return than most other options offer. Investing is also a way for you to keep up with never ending inflation, ensuring that your savings doesn’t lose value over the years.

6. Never pay full price for anything.

Unless the item or service you are paying for doesn’t ever go on sale or have some type of deal available, you should never pay the full price. Be patient and plan ahead. Wait to buy until the price comes down at least a little, and you’ll save some money.

If you do this with every purchase you make, you will save a noticeable amount of money throughout a year. This allows for more saving, paying off debt, or investing.

7. Upcycle whenever possible.

Upcycling is becoming increasingly popular and occurs when an old, unwanted item is used to create something different. Lumber and other types of wood can be upcycled into furniture.

Any type of container can be upcycled to become a planter, and an old dresser can be used as a bathroom vanity. If the dresser can’t be used as a vanity, the drawers can be used as shelves. The possibilities are endless when it comes to upcycling, so you just have to remember to take something old (or just unwanted) and make it into something new and desirable.

8. Prepare all food at home.

Eating out is expensive. When you make a habit of it, you are wasting a large amount of money each month. Instead of going out to a restaurant or fast-food joint each day for lunch, pack something from home instead.

Not only will you save money, but your body will thank you for the more nutritious food options. You can prepare sandwiches, chicken and rice, soup, or you could even take dinner leftovers from the day before.

9. Try DIY projects.

Instead of paying more money for items that are already made, try to make things on your own. You can build yourself a bench, or you can even put in your own flooring. If you need a hair trim, research a DIY method for a hair trim.

You can do DIY projects for so many things, and it will save you so much money almost instantly. Whenever you want something new, ask yourself if you can make it yourself for cheaper. The money saved will likely be well worth the time and effort you put into it.

10. Learn to say no to things that cost you money.

You don’t have to buy something from every fundraising catalog brought to your door. Likewise, you don’t have to order magazine subscriptions to help with random causes, either. If you don’t want (or need) any of the items, politely say no.

Your personal finance is worth more than any of the wasted money on items you didn’t really want. Additionally, if someone invites you somewhere that costs money (or may cost money once you get there) and you really aren’t that excited about it, just say no to this, as well.

11. Do all of your shopping at one time.

This trick can make you have better personal finance skills in multiple ways. First, you will be using less gas (and, in turn, less money) going back and forth to stores. Secondly, whenever you walk in the store, there is a high chance that you pick up something you don’t really need. Doing all of your shopping at one time can save you from the random impulse purchases.

12. Be happy with what you already have.

Be content with your “old” laptop or cellphone. There is no need to spend money on new items when you should be happy with what you already have. This concept goes for all things in your life, you should really just focus on being thankful.

You don’t need a newer car if your old one works just fine, and you don’t need new furniture each year. Appreciate that you already have these things, and move on without buying what you don’t need.

13. Start an emergency fund.

An emergency fund should cover all of your expenses for 3-6 months. This is in case someone in your family becomes extremely ill, you lose your job, or some other extreme situation occurs that prevents you (or your spouse) from earning an income.

To do this, simply transfer money into a separate saving account each time you get paid. This money isn’t to be touched at any time unless you are in desperate need and have no source of income.

14. Use envelopes for anything you have to spend money on.

This is an old concept, but it works really well. Set a grocery budget and each time, pull out that exact amount of cash. Put this cash in the envelope, and that is all you have available to spend on groceries.

You should do this with gas money, spending money, and money for holiday spending, as well. It helps you keep track of how much you have already spent, how much more you can still spend, and it prevents you from overspending. If it helps, you can leave your debit and credit cards at home and only take the envelopes of cash with you when you go out.

15. Don’t get a car loan.

This may not be possible for everyone, but if you have the means to buy a used car outright, do that! You don’t need the newest car, and if you can save hundreds of dollars each month (instead of putting it toward a vehicle loan), you can use that money to pay off other debt.

16. Be aware of your credit score.

One of the most important personal finance tips is to know your credit score. You will be able to quickly notice any drastic changes and see what is causing issues on your credit score. You can’t have excellent personal finance skills if you don’t know your credit score, and not knowing can cost you quite a bit of money.

17. Have insurance plans.

Health issues can cause serious damage to your finances. If anyone in your family is diagnosed with a serious disease or illness, the treatment and other medical necessities will likely be very expensive. To prevent putting yourself into serious debt over it, everyone should have health insurance.

Other insurance policies that should be in place include:

  • Vehicle
  • Homeowners
  • Life

18. Set financial goals for yourself.

Figure out what you want most out of your financial situation. Paying off debt may be your goal, or simply putting all of your bills on auto-pay. Saving a certain amount of money for emergencies is a good goal, as well.

The more specific you make your goal, the more likely you will be to reach it. Keep track of your financial goals in a notebook or planner.

19. Find a side hustle that you enjoy.

Side hustles don’t have to take much time, and you should always enjoy this method of making money. Some ideas include:

  • freelance writing
  • website building
  • graphic design
  • furniture repurposing

20. Work to pay off all debt, and avoid accruing new debt.

With debt comes interest rates and, inevitably, spending more money than you should have.
Types of debt may include:

  • credit cards
  • student loans
  • mortgage
  • vehicle loans
  • personal loans

This isn’t to say that you should cancel all of your credit accounts. Having open lines of credit is actually a good thing. It only becomes a problem when those accounts are maxed out, or when only the minimum payment is being made each month.

21. Save money right when you get it.

Don’t wait until the spending is all done to save what is “left”. Instead, you should put money into your savings account as soon as you get paid, and then spend what is left.

Final Thoughts On Tricks for Personal Finance Skills

Changing some of your habits may be the trick to developing better personal finance skills. Once you have implemented some (or all) of these personal finance tips, you should notice that your financial situation has improved. This will allow you to live more comfortably and save for your future.

The post 21 Tricks That Improve Your Personal Finance Skills appeared first on Power of Positivity: Positive Thinking & Attitude.

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