Life Hacks

14 Most Important Money Advice That Everyone Must Know

Conversations about money and debt can be very uncomfortable sometimes. Whether it is the root of all evil or not, it has its own rules and important money advice that must be followed diligently.

People work so hard for their monies but surprisingly, not many people get advised on how money works.

Of course it is their money, but how about knowing how to make the most of it? And that is what this post is about.

Here are 14 of the most important money advice you can learn from;

1.Live Within Your Means

This is a basic principle on how to lower your cost of living and create wealth. The rule is simple: alway spend lesser than you make.

Financial freedom is not just a phrase but an attitude. Make sure to have more coming in than going out.

2. Save Consistently

It’s better to have the money you don’t need now in the bank than keep it on you. When you keep money on you, there is a higher possibility that you will buy wants, instead of needs.

3. Think Multiple Ways to Make Money

There are many ways to make extra money these days. There is no better money advise than that which gives you more money.

Today, it is easier to make money online even with your phone whiles in your pyjamas. Read more here; how to make money online.

4. Never borrow money on something that depreciates

People talk about investible assets and high yielding portfolios not for nothing. It is probably the only way to match up with inflation.  So, always try to put more money in appreciable assets and portfolios.

5. Don’t lend Money To family, friends or neighbors; they won’t pay back

This is not always the case but mostly, it is the case. I have personally lent to very good friends who never paid back. Even after chasing them for it, not a cent has been repaid.

I lost my money and my friends. These group usually take advantage of the relationship you have with them and not pay back. So, only do so when you have more to spend.

6. Set up an emergency fund

Life is uncertain and things happen. It is only prudent to have a backup money to cover for eventualities.

This helps avoid the possibility of cashing out your premature investments or being stack in a situation with no much money to solve.

7. There is such thing as good debt

I know ‘debt’ does not sound appealing but good debt should intrigue you. Taking a huge students loan to study an unemployable course is certainly not a good advice, but taking up a small business loan to scale up or expand your business isn’t a bad money advice either.

Banks would always want to give out business loans than personal loans as businesses are more likely to pay back. So, understand debt and take advantage of it.

8. Save early for retirement – even during your very first job

The importance of early savings cannot be overemphasized. It is never late to start your retirement savings. Always invest in portfolios with high enough interest such as mutual funds. At least it pays more than savings.

9. Always pay yourself first

Yes, you heard me right. Why should it be difficult to pay yourself a good amount from the profits of your business or your salary? You work so hard. It won’t hurt to set a percentage of your income into an account as a ‘self-salary’ and go on a vacation or give yourself that treat. Give this a try and you would appreciate me for the advice.

10. Setup auto transfers

Setup auto transfers from your checking accounts to your saving and investment accounts. If you leave it up yourself to do it manually, you will always find a reason or an excuse not to move it. Most times, your salary maybe spent in advance before the month ends.

Yes, that’s the truth, and with all these economic downturns, I can’t blame you. But with standing orders with your bank, savings and investment deductions would be made automatically leaving just what you need to spend.

11. Think long term

Whatever you are spending money on, always think of the value over a period time; would it increase or decrease?

The time value of money should be core to your money decisions. That is perhaps the only way to match up against inflation.

12. Take care of your body and health, Otherwise, it will cost you more in the long run.

Always try to balance work and investments with healthy living. Don’t invest or save too much to the extent that you can’t afford quality food/balanced diet or access quality health care.

No point to have a good money at retirement and your body and mind not up to the task.

13. Be a free giver

As it is always said, ‘it pays more to give than to receive’. When you understand this, you won’t have too much money and people problems. But only give when you have more.

14. Use credit cards for monthly purchases to build credit scores.

Never carry a balance. Pay them multiple times per month (e.g. pay each days expenses the same day) if you are bad at tracking.

You won’t get credit if you don’t use credit and if you’re young and want to eventually buy a house, that could pay off.

These money advises should help you improve on your money decisions otherwise, you can try any money advice service.

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