- If You’re Struggling With Federal Student Loan Payments, Investigate Repayment Options
Just call up your lender and ask whether they offer graduated, extended, or income-based plans. Read more about these options here.
Opt for Mortgage Payments Below 28% of Your Monthly Income
That’s a general rule of thumb when you’re trying to figure out how much house you can afford. Learn more about this number here. And then indulge in some voyeurism and see what other couples can afford.
How to Shop Smart
28. Evaluate Purchases by Cost Per Use
It may seem more financially responsible to buy a trendy $5 shirt than a basic $30 shirt—but only if you ignore the quality factor! When deciding if the latest tech toy, kitchen gadget, or apparel item is worth it, factor in how many times you’ll use it or wear it. For that matter, you can even consider cost per hour for experiences!
- Spend on Experiences, Not Things
Putting your money toward purchases like a concert or a picnic in the park—instead of spending it on pricey material objects—gives you more happiness for your buck. The research says so.
Ever have a friend declare, “That’s so cute on you! You have to get it!” for everything you try on? Save your socializing for a walk in the park, instead of a stroll through the mall, and treat shopping with serious attention.
Spend on the Real You—Not the Imaginary You
It’s easy to fall into the trap of buying for the person you want to be: chef, professional stylist, triathlete.
Ditch the Overdraft Protection
It sounds nice, but it’s actually a way for banks to tempt you to overspend, and then charge a fee for the privilege. Find out more about overdraft protection and other banking mistakes to avoid.
How to Save Right for Retirement
33. Start Saving ASAP
Not next week. Not when you get a raise. Not next year. Today. Because money you put in your retirement fund now will have more time to grow through the power of compound growth.
- Do Everything Possible Not to Cash Out Your Retirement Account Early
Dipping into your retirement funds early will hurt you many times over. For starters, you’re negating all the hard work you’ve done so far saving—and you’re preventing that money from being invested. Second, you’ll be penalized for an early withdrawal, and those penalties are usually pretty hefty. Finally, you’ll get hit with a tax bill for the money you withdraw. All these factors make cashing out early a very last resort.
Give Money to Get Money
The famous 401(k) match is when your employer contributes money to your retirement account. But you’ll only get that contribution if you contribute first. That’s why it’s called a match, see?
When You Get a Raise, Raise Your Retirement Savings, Too
You know how you’ve always told yourself you would save more when you have more? We’re calling you out on that. Every time you get a bump in pay, the first thing you should do is up your automatic transfer to savings, and increase your retirement contributions. It’s just one step in our checklist for starting to save for retirement.
How to Best Build—and Track—Your Credit
37. Review Your Credit Report Regularly—and Keep an Eye on Your Credit Score
This woman learned the hard way that a less-than-stellar credit score has the potential to cost you thousands. She only checked her credit report, which seemed fine—but didn’t get her actual credit score, which told a different story.
- Keep Your Credit Use Below 30% of Your Total Available Credit
Otherwise known as your credit utilization rate, you calculate it by dividing the total amount on all of your credit cards by your total available credit. And if you’re using more than 30% of your available credit, it can ding your credit score.
If You Have Bad Credit, Get a Secured Credit Card
A secured card helps build credit like a regular card—but it won’t let you overspend. And you don’t need good credit to get one! Here’s everything you need to know about secured credit cards.
How to Get Properly Insured
40. Get More Life Insurance on Top of Your Company’s Policy
That’s because the basic policy from your employer is often far too little. Not convinced? Read how extra life insurance saved one family.
- Get Renters Insurance
It, of course, covers robberies, vandalism, and natural disasters, but it could also cover things like the medical bills of people who get hurt at your place, damages you cause at someone else’s home, rent if you have to stay somewhere else because of damage done to your apartment—and even stuff stolen from a storage unit. Not bad for about $30 a month!
How to Prepare for Rainy (Financial) Days
42. Make Savings Part of Your Monthly Budget
If you wait to put money aside for when you consistently have enough of a cash cushion available at the end of the month, you’ll never have money to put aside! Instead, bake monthly savings into your budget now. Read more on this and other big savings mistakes—and how to fix them.
- Keep Your Savings Out of Your Checking Account
Here’s a universal truth: If you see you have money in your checking account, you will spend it. Period. The fast track to building up savings starts with opening a separate savings account, so it’s less possible to accidentally spend your vacation money on another late-night online shopping spree.
Open a Savings Account at a Different Bank Than Where You Have Your Checking Account
If you keep both your accounts at the same bank, it’s easy to transfer money from your savings to your checking. Way too easy. So avoid the problem—and these other money pitfalls.
Direct Deposit is (Almost) Magic
Why, you ask? Because it makes you feel like the money you shuttle to your savings every month appears out of thin air—even though you know full well it comes from your paycheck. If the money you allot toward savings never lands in your checking account, you probably won’t miss it—and may even be pleasantly surprised by how much your account grows over time. Find out other ways to get your emergency fund started.
Consider Switching to a Credit Union
Credit unions aren’t right for everyone, but they could be the place to go for better customer service, kinder loans, and better interest rates on your savings accounts.
There Are 5 Types of Financial Emergencies
Hint: A wedding isn’t one of them. Only dip into your emergency savings account if you’ve lost your job, you have a medical emergency, your car breaks down, you have emergency home expenses (like a leaky roof), or you need to travel to a funeral. Otherwise, if you can’t afford it, just say no. We explain more here.
You Can Have Too Much Savings
It’s rare, but possible. If you have more than six months’ savings in your emergency account (nine months if you’re self-employed), and you have enough socked away for your short-term financial goals, then start thinking about investing.
How to Approach Investing
49. Pay Attention to Fees
The fees you pay in your funds, also called expense ratios, can eat into your returns. Even something as seemingly low as a 1% fee will cost you in the long run. Our general recommendation is to stick with low-cost index funds.
- Rebalance Your Portfolio Once a Year
We’re not advocates of playing the market, but you need to take a look at your brokerage account every once in a while to make sure that your investment allocations still match your greater investing goals. Here’s how to rebalance.