Creating a top 20 personal finance tips list is hard to do because everyone’s situation might be different. The thing is, there are some fundamental things you NEED to know if you want to be financially free.
These are money habits that you need to learn, and then remind yourself regularly, so that you live by them.
Below are the top 20 personal finance tips that have helped impact my finances for the better.
Last thing before I get started, all of these tips are golden nuggets of wisdom that I found from various books. I’ll make sure to credit each tip as best as possible, incase you’d like to dig further into the tip.
#1 – Keep at least 10% of what you make
It’s not a mistake that this tip is #1, it sets the foundation for all the other tips, and quite frankly, your financial health.
Whether you make $2,000 a month or $10,000, if you’re not setting aside some money for savings or investing, you’re doing yourself (and maybe your family) a huge disservice.
The best part is that you usually tend to live just fine with the 90% that you can use to pay bills and live life. I’ve done this myself for 5 years now, and it has done wonders.
Others who I have talked to also have seen a huge upside in savings from this little nugget. That 10% starts as a small seed for a huge tree to grow, and once you flex that 10% muscle for several months, you see yourself sometimes flexing higher to maybe 20% one month.
When I heard that some people consistently save 60% of their salary, I had to try it out.
It’s not something that I could do consistently every month, but it’s like working out to me, I had to try it once or twice so that it became something possible.
Now, I tend to stick around the 30-40% range on a monthly basis.
The takeaway is simple, keep at least 10% of your salary for saving/investing, and then go higher after a few months if you can. But never ever stop putting 10% aside, its a habit you need to set for life.
This tip was taken from my all time favorite personal finance book, The Richest Man in Babylon.
#2 – Don’t invest in anything you don’t understand
Another tip I got from my fav book The Richest Man in Babylon. We tend to see things in the media that get sensationalized and we want to invest in it.
It could be Bitcoin, it could be a new company that released an IPO, or maybe a new talked about cannabis stock.
Whatever it is, feel free to educate yourself about it, but if you’re not well versed in the area, then don’t invest in it.
There are millions of places to put our money, and Warren Buffet’s rule #1 is to never lose money.
It’s not too hard to find companies to invest in.