Post Your Best Saving/Personal Finance Advice

[james.hendrickson]

Hi Guys,

For the benefit of the forum community and our many lurkers, lets post our best advice for saving and personal finance success.

Mine is:

1. Own your home: In the long run, owning is way more cost effective than renting. But don't buy if you are going to sell in a couple of years.

2. Prioritize your savings goals and work towards them. Be patient, focus on your successes and learn from your past mistakes. Mistakes are inevitable, you just need to learn what you can from them.

3. Don't carry a balance on your credit cards.

4. Don't buy consumer items (cars, vacations, clothes) that loose value over time on credit, instead focus on investing in things that gain value (stocks, real estate or education).

5. Save and invest at least 5 or 10 percent of your income. Take what your employer and Uncle Sam gives you to reduce your taxes.

6. You cannot build wealth unless you save. Unless you have wealthy benevolent relatives, you aren't going to have money to invest unless you are an aggressive saver.

[GoodSteward]

Mine is more psychological/philosophical.

Pay yourself first. Budget your savings just like your bills.

Don't buy more (insert item here) than you can afford. ie Cars, house, wife, etc...

Don't obligate your entire cash flow, leave room for life. This avoids you turning to debt or feeling like a failure when things don't go right.

Give some of your income to charity/helping those in need. Makes life more fulfilling.

Money isn't the point of life and shouldn't the source of your happiness. Stop sacrificing family and friends for a buck. Spend time with them.

[TexasHusker]

Give 10 percent. Save 10 percent. Live on the other 80 percent.

[greenskeeper]

spend less than you make

when you think you're saving enough....save some more

[97guns]

6. You cannot build wealth unless you save. Unless you have wealthy benevolent relatives, you aren't going to have money to invest unless you are an aggressive saver.

this is my #1, when i was getting into my current investments i had several relatives tell me that they should get in also but they have zero savings, living on credit cards and were only dreaming or maybe just making conversation. i would guestimate that 90% of americans have no savings

[FLA]

from your first job on, save 15% in their 401k or a Roth if necessary

invest for the long haul, don't change course every time the market shifts

save in fees and invest in index funds if they are offered to you. If your 401k has unusually high fees, complain to HR. At my first and last job, in the beginning they only offered annuities, I spoke up and was allowed to choose my own fund company on my own. My ex-husband and I were the only 2 employees with Fidelity (I should've chose Vanguard) while everyone else thought they were stuck with annuities.

buy much less house than you will be told you can afford

try to have an Emergency Fund, when I was younger, I invested that money in a Roth because after 5 yrs you can take contributions out without penalty. I never used my Roth for an emergency but it was comforting knowing those contributions were available.

consider big purchases, like cars, carefully, remember they devalue the moment you drive off the lot

take vacations to great places but do your homework to get the biggest bang for your buck

[creditcardfree]

An emergency fund is key to financial independence. The discipline it takes to build one from scratch creates the habits of spending less than you earn and saving for the future. No one every regrets having money set aside for something unexpected.

[JBinKC]

Learn to Diy as much as you can unless your after tax time is worth more than the cost of the repair/service.

Own fewer depreciable assets and favor owning assets that have a chance of rising in value and keep them in tax sheltered accounts/situations I.e. Roth IRA or capital gains exclusions on home

Avoid paying a retail price on anything you buy and don't buy anything you really don't need.


Never pay interest except on an asset that has a high chance of appreciating.

Protect your identity and don' t flaunt your wealth.

[scfr]

Spend less than you earn. Earn more than you spend. It all starts here.

Know yourself. Be honest with yourself. Educate yourself.

If you are married, make your finances a powerful team effort.

[clatoden99]

My dad told me to always strive to save 1/3rd of your paycheck. His calculation was 1/3rd is for your expenses, 1/3rd for the household (I started contributing in my family as soon as I started earning) and the 1/3rd is for saving.

I practiced this since I started earning, and it helped me accumulate a considerable amount in my savings. It also taught me live within my paycheck. Always!

[DaveInPgh]

Don't sweat the petty things....

[disneysteve]

If I had to give one single piece of advice it would probably be to live on the 50/30/20 budget.

50% for needs
30% for wants
20% for savings

I think if everyone followed that, the vast majority of financial problems would go away.

[Jluke]

One thing I've always done is manage my money in reverse.

When I get paid, I only leave the exact amount I need to cover the bills for that 2-week period. The rest of the money goes to my money market (automatic forced savings). * Assumption, you are not spending more than you make.

As needed, I will move an exact amount from the money market to the checking account to cover bills.

it's easy for me since I use a credit card for just about everything and I have very few "wants".

I see my checking account balance at $20 and I feel poor (ignore the savings/money market account) so I spend less.

[FLA]

buy own-occupation disability insurance when you are young and it is cheap

[24Biz]

If I had to give one single piece of advice it would probably be to live on the 50/30/20 budget.

50% for needs
30% for wants
20% for savings

I think if everyone followed that, the vast majority of financial problems would go away.

I like 60(50)/20/20(30) budget