At some point in his life, everyone makes mistakes in money management, regardless of whether he spends it on unnecessary things or neglects the opportunity to replenish his retirement account. Even the coolest financial pros are not protected from making mistakes.
To help you avoid such oversights, or at least reduce their likelihood, we present money advice from experts that they would give to themselves in their youth if they had the opportunity. These tips and tricks can help you live a better money (and not only) life, regardless of your current age..
1. Start with savings
Money advice will never exclude the rules of savings. Here is an example from the USA. More than half of the population of this country has less than $ 1,000 in their accounts as savings (according to the GOBankingRates survey). Experts say consumers are always tempted to spend rather than save when they get paid. However, it is extremely important to give priority to investments in savings accounts. One way to do this is to automate payments..
Sharon Epperson, senior correspondent for CNBC’s personal finance and executive at Retire Well (also a member of CNBC), says: “You won’t spend what you don’t see. Make automatic transfers from your salary account to a savings account so that they are not tied to the budget for expenses ”.
2. Avoid “lifestyle inflation”
Ted Jenkin, a certified financial planner, said it’s equally important to increase your savings when you start earning more to continue to increase your net worth.
“Take one-third of every salary increase so that your lifestyle is not subject to inflation.”
By starting this practice early in your career, you will develop good habits such as saving, investing, and paying off debts. This is many times more useful than acquiring even more things that you will not need in a few years..
3. Do not spend money on things that you really do not need
If you have just received your first salary or achieved a raise, there is a temptation to spend honestly earned money on something pleasing to the soul or seeming valuable, but often this is a huge mistake.
“You shouldn’t spend a lot of money on clothes,” says Michel Schroeder-Gardner, founder of the personal finance unit, Making Sense of Cents. “I worked on a full-time schedule when I was about 14 years old, but actually started saving money, probably only a decade later”.
4. Do not buy things to impress other people.
Money tips can not do without this recommendation. According to John Rumpton, Founder and CEO of Calendar, spending on short-term desires can seriously harm your future needs..
“Don’t waste time and money on expensive cars or gadgets,” he said. “It’s better to save money for the long term and for those things that will help you continue to make money, rather than take it away”.
5. Start investing in your own pension as can be earlier
Again an example from the USA. More than a third of Americans have no more than $ 10,000 in retirement savings by the time they retire (according to the 2018 Retirement Saving GOBankingRates study). Of course, postponing the accumulation of pensions for later is easy when you are 20 years old, but, in fact, this is the best time to start. The sooner you start saving money for old age, the sooner you can take advantage of “compound interest”. The expert opinion is that – regardless of your age, it is important to give priority to investments in pension accounts. Especially in our current situation, when Russia is going to raise the retirement age every year.
“Start investing in your old age account with any of your taxable income,” says Erin Lowry, author of Broke Millennial: Stop Scraping By and Get Your Financial Life Together. “I would like to start investing in my future earlier, for example, back from college”.
6. Do not be afraid of the stock market
Any money advice includes an investment item. Doing something that scares you is probably a good practice for your finances. Beginning investors are often afraid of the stock market, but just by starting, even on a small scale, you improve your financial life. This is why Tom Hegna, a financial author, speaker, and economist, thinks you should start investing in the stock market. Certified financial planner Jeff Rose agrees with him: “Invest earlier. I started investing in 24 years, and started working when I was 16, and perhaps I could invest and get much more over the years. ”.
7. Invest more
Heghna says: “Invest in the market and take profits by buying additional assets to increase profits. As soon as your main expenses begin to be covered by income, buy more ».
Having made a reasonable investment now, you can create for yourself such an airbag for your pension, which will provide both social security and more than comfortable conditions for living and recreation.
8. Invest in yourself
In addition to financial investments, it is important to invest in yourself, studying everything you can about personal finances. This will allow you to develop your own financial plan, the most effective and useful..
“No one will care about your financial success as much as you yourself,” says Marsha Barnes, a certified financial social worker and founder of The Finance Bar. “Learn as much as you can today”.
It is easy to push personal finance and development into the background, saying that this is only confusing. However, this approach harms your future. The sooner you spend time learning the basics of finance and managing them, the sooner you will be able to use this knowledge to plan short and long term goals..
9. Listen to yourself and take action
“Find out what you want from life, and then make decisions that meet your goals,” says J. D. Roth, founder of Get Rich Slowly, a financial website. “As soon as I figured out my global goals, I was able to make those financial decisions that began to bring me closer to their implementation”.
When you know exactly why you are saving money, it motivates you to stick to a given plan and work harder.
10. Do not waste time on excitement
“… And don’t let fear get in your way of what you want to achieve,” says Jen Sincero, writer and success coach at The New York Times. “Anxiety is a prayer for what you want to avoid. So stop shaking about money, but rather focus on what you want to achieve. ”.
11. Remember that money is not everything.
Despite the fact that you need money to cover all expenses and necessities of life, they are not an end in itself or the center of life. But this does not mean that you should not demand what you want and what you deserve..
“Ask for a lot of money and learn to negotiate as soon as possible,” says cash expert Brittney Castro. “However, do not pursue money like the holy grail. Enjoy them. Do more with their help. Do them in a larger volume. But remember that this is only a resource necessary for obtaining benefits, and not an indicator of who or what you are in the world. ”.
12. Do not let money determine your behavior
Dominica Broadway, a personal finance expert and founder of Finances Demystified, agrees that money does not define you as a person or your success. “Don’t associate money with success,” she says. “Money can come and go. Focus on saving and increasing your money, rather than on “shiny” things that supposedly allow you to keep up with other people and time. ”.
Use these recommendations and don’t be afraid to look into your financial problems, and we hope that these money tips will help you achieve the best.
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