Home > 2013 > Personal Finance

10 Money Tips You Shouldn’t Ignore

Advertiser Disclosure Comments 0 Comments

With all the personal finance advice out there, it can get pretty overwhelming. But there are some fundamental principles that you shouldn’t overlook.  If you adopt these good habits, you’ll be better prepared for financial emergencies, and for retirement down the road. Let’s take a look at them:

1. There are no shortcuts.

If someone tells you they can double your money in no time with no risk, tell them you already know how.  Then fold your money in half and put it back in your pocket. Risk and reward are correlated. Doubling your money in a short period of time equates to a high return on your investment; that corresponds to taking more risk, not zero risk. There’s nothing wrong with taking appropriate risk, but buying into an investment with those kinds of unrealistic promises is sure to disappoint.

2. Beware of shiny objects.

We are bombarded with new and better gadgets, toys, and opportunities for fun every day, all day. Madison Avenue survives by sowing seeds of discontent with our lives.  Sure, we all know that’s what they’re doing, but they’re really good at it!  We no longer have to look down the street to see what the Joneses are up to, we have Facebook to constantly remind us that our friends have better, newer stuff.  If we’re not careful, those seeds of discontent can take root and before we know it, we’re spending money on things to fill a need we didn’t even know we had. Listen to your mom — don’t pay attention to what everyone else is doing, just worry about yourself and your goals.

3. Watch your waste.

Shiny objects aren’t the only source of needless spending. It’s painful to look at my own life sometimes and realize what I’ve frittered away. Forgotten rebates, fruit that goes bad before we eat it, buying doubles of things because I can’t remember where I put them in the first time. I suspect I’m not alone in this!

4. Save money, and do it intentionally.

Saving regularly through your 401K at work and toward your emergency fund are fundamentals of good financial health. But you should also stash money that you would have spent but decided not to. Like on those shiny objects. Were you going to buy a new tablet but thought better of it? Pat yourself on the back for your frugality, and then take that chunk of change and put it in the bank instead.  Did you decide as a family to skip a dinner out this month to tighten your belts? Put that money away; don’t let it sit in your checking account. That serves two purposes: It keeps the money from evaporating, and it gives you a psychological boost by seeing your savings grow.

5. Don’t wait until your debt is paid off to save.

It may seem more prudent to skip the savings when you’re paying off credit cards, but it’s important to continue to save anyway. It takes time to form a habit, and training yourself to save is a great habit to form. So start now. Aside from that, what will you do when your car breaks down and there is nothing in the bank to pay for the repair? Out comes the credit card, and there goes your progress. It’s better to have some money put away to pay for those expenses, and change the mindset of funding your living expenses with plastic.

6. Don’t deprive yourself.

While you’re doing all these great, disciplined things with your money, don’t forget to let loose and have a little fun with it sometimes. Being too strict with your spending can lead to feelings of deprivation, which in turn can lead to spending binges. Starvation budgets are much like starvation diets.  When you cheat, you tend to cheat big.

7. Automate your finances. 

Life is busy and the days fly by.  Before you know it the month is almost over, and oops, that bill was due last week.  Schedule at least the minimum payments on your bills, so if you forget, you won’t be penalized with a late fee.  Plan out your monthly bills in advance, and take advantage of free bill pay if your bank offers it.  Automate your savings so you don’t have the opportunity to weigh whether or not you really can save that amount this month.

8. Don’t automate your finances.

Automate what you can, but don’t go on auto-pilot. It’s easy to stop paying attention to what is being charged monthly on your credit card or automatically paid from your bank account. That can make you numb to your spending, and easy for it to get out of control. Even though you have payments automatically scheduled, be sure to review your accounts regularly.

9. Life insurance.

Buy enough life insurance to protect your family.  It’s an extra bill, to cover something that probably won’t happen, but a small price to pay to provide for your loved ones if it does. Group policies at work are usually the easiest to get, and that’s fine, but you should also have coverage you own personally, outside of work. You never know when you will develop a health problem that will affect your insurability, and if you don’t already own a policy when that happens, you could be out of luck. Or rather, your family will be.

10. Decide how much is enough.

Did you ever dream about a raise, and how that would make things more comfortable for you financially?  Then it comes, and things end up just as tight as before, and soon you are dreaming of the next one.  The increases in costs of living play a part no doubt, and our income doesn’t go as far as it used to.  But it is also human nature for us to expand our lifestyle to fit our income. Carefully consider what kind of lifestyle you would like to have, and when you get there, stop. Don’t let it continue to expand. Enjoy the “margin,” or extra, that brings, by saving more or giving to folks or organizations that are dear to your heart.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its affiliates.

Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team