50 Personal Finance Tips

The Painfully Obvious But Rarely Followed Tips

1. Pay yourself first. Try to put away at least 10% of your pre-tax income into a savings account.
2. Spend less than you earn. While this seems obvious, Americans are notorious for doing just the opposite. Stop spending and start saving.
3. Pay your bills on time. Avoid needless late fees and know how much money you actually have.
4. Avoid debt to the extent possible. Student loans and mortgages can be "good debt", but even then, make paying them off a priority.
5. Set a budget. And live by it. Use a computer program or just a paper and pencil - whatever works.
6. Set concrete goals. Know when you want to buy a new home, when you want to retire, and how much you are expecting each to cost you.
7. Have an emergency fund. Have at least three months' income (some say six) in a high-yield savings account that can be easily accessed.
   
   

Career and Education

8. Get educated. A college education always pays for itself and more. In 2004, bachelor's degree holders earned an average of $51,208 per year, while high school graduates earned only $27,915, according to Census data compiled by HighBearn Research.
9. Your career is your most valuable asset. Manage it with a higher priority than you would with any other investment. Remember that without this asset, you couldn't survive.
10. Save enough. You should try to save enough to cover at least one-third of your kids' total college costs.
11. Consider public schools. Especially for college, state schools can often times be just as prestigious, if not more than private schools.
12. Consider community college or online college for your first year or two. You can then transfer these credits to a more expensive (and prestigious) school to finish your final two or three years.
13. Invest in a 529 college savings account. It's tax free. What more needs to be said?
14. Ask for a raise. Use the Salary Wizard Calculator to see if you're making as much as you should. If not, consider asking for a raise, especially if you've been at the company for more than a year.
15. Get a professional certificate. Some professions offer a certificate that, if earned, will generally provide you with a higher salary.
16. Don't major in English. If you love studying English, there's nothing wrong with that. Just be aware that English majors generally don't earn very much. Six of the top ten lists of majors with the highest salaries are engineering majors, with chemical engineering topping the list.
    
    

    Credit and Loans

17. Get a rewards card. If you need a credit card, the best type to get is a no-fee rewards card that you pay in full every month.
18. Borrow no more than 30% of your available credit. Borrow any more, and your credit score won't look too good.
19. Pay off your credit card debt. Credit card debt is usually the debt with the most interest. So pay it off first. Better yet, don't accumulate it in the first place.
20. Don't use your credit card for cash advances. It will harm your credit score and the interest rates are outrageous.
21. Know your credit score. Order your credit score from Equifax, Experian, and/or TransUnion.
22. Protect yourself from identity theft. Obtain your free credit report at least once per year and follow these tips.
23. Pay all credit balances in full each month. Leaving a balance on a credit card account will leave you susceptible to a very high APR. You may as well be throwing cash into the fireplace.
24. Consolidate your loans. Especially those student loans. With a student consolidation loan, you can lock in several loans at a fixed interest rate and have just one lender to pay each month.
25. Avoid payday loans. Bottom line: they charge high interest rates. If you do need an emergency cash loan, just be aware of the risk of high interest rates.
26. Beware of scams. There are a lot of scams that deal with credit. Debt suspension offers, paying fees in advance, buying credit protection, and rebuilding credit usually sound too good to be true. There's a reason for this: they are.
27. Be cautious with home equity loans. If you can't make a payment toward a home equity loan, you could lose your house.
    
    

    Frugality

28. Buy a used car. The most expensive miles on a car are the first 10,000. Let someone else drive those for you. Buying used can save a lot of money considering how little value the car has actually lost.
29. Be patient. Don't buy that new gadget today. Wait a month or two and the price will certainly go down.
30. Buy airline tickets as far in advance as possible. The cheapest flights are the ones that are bought at least two months in advance. For holiday travel especially, buy as soon as you can.
31. Get the most bang for your airline miles. Be sure each airline mile you redeem is providing you with at least 1 cent toward the price of a ticket.
32. Never buy the extended warranty. Often times, your new product already comes with a 90-day or 1-year warranty (when most "faulty" things will break, anyway). There's a reason everyone wants to sell you an extended warranty: they're hugely profitable (for the business, not you).
33. Make your own meals. Eating out gets to be expensive if you do it too often.
34. Make your home more energy efficient. You'll be amazed how quickly the savings add up.
35. Get a better cell phone plan. If you've had the same cell phone for a couple of years, chances are there's something better out there. Look around or call your current provider and ask for a better deal.
36. Banking fees are for suckers. A lot of banks will charge you checking fees or minimum account balance fees. Find a bank that does not.
37. Keep track of your spending. At least for a month, keep a journal of everything you purchase. At the end of the month, review your spending priorities and make adjustments.
38. Ditch your car. Walk, bicycle, or take public transportation. You'll save on car payments, gasoline, parking and speeding tickets.
39. Use your frequent flier miles often. They may expire before you know it. There's no sense in stockpiling them. If you have enough for a free flight, use them.
40. Buy through your favorite airline's partner's merchant store. AA.com, for instance has multiple retail partners from whom you can earn frequent flier miles with each purchase.
41. Negotiate fees. For example, ask a bank to waive late fees. Often enough, they will.
42. Get your free money. Money might be owed to you. Get it.
    
    

    Homeowning

43. Upgrade your old bathrooms and kitchens. These are often selling points on a house. A modernized bathroom can provide over a 100% return, while a modernized kitchen can return about 90%.
44. Refinance your mortgage if you can cut at least one point. The costs of refinancing are considerable, so it should only be done if you can trim your interest rate by at least 1%.
45. Never spend more than 2 1/2 times your income on a home. Know what you can afford and what you cannot.
46. Put at least 20% down on a home. Making a down payment of less than 20% will usuallly result in a private mortgage insurance (PMI) fee being added. This is usually 0.5% which means it could cost you about $1,000 a year on a $200,000 principal.
47. Use a mortgage broker. The better your mortgage, the more you'll save. Shop around.
48. Investigate different types of mortgages. There are dozens of mortgage options out there. FInd the one that suits you best.
49. Buy a house that needs repairs. Buy for cheap and then add to the value with repairs. You'll save the money.
50. Deal directly with the seller. Avoiding agents' fees is a good thing. If you do decide to hire an agent, do your homework and get one who will be on the same page as you. You should be the one calling the shots.