There is a lot of financial advice floating around in the world, but if you flip through a magazine or browse a web article with money tips, you may be left with the feeling that it doesn't apply to you. Today, we've got money tips that apply to almost everyone. Whether you're just starting out, are established with a family, are earning great wages or struggling along, check these out:
#1 Credit Cards Are Bad
Unless you exercise perfect control with your plastic, never roll a balance over month to month and never buy anything you can't afford to pay that month, credit cards are a slippery slope. If times get tight, it's easy to abuse them. Limit yourself to one card to be used only for credit-only situations (like renting a car) and don't build up debt.
#2 Skipping Coffee Isn't the Answer
Many articles tell you that staying out of Starbucks and avoiding $4 lattes is the key to financial success, but a daily coffee isn't going to break the bank. Instead, look at your housing and car costs as the real indulgences that need to be controlled. Spending too much on where you live and what you drive is a much bigger issue.
#3 Insure You and Your Stuff Wisely
Health, life and auto insurance are smart buys as long as you don't overpay, set deductibles as high as you can and still afford to pay them. But don't insure your travel plans, new iPhone or buy an extended warranty or payment protection on anything. These unnecessary “protections” greatly increase the costs of living without offering real benefit.
#4 Be Careful How Much House You Buy
No matter how much you want a home, buying foolishly will come back to bite you for years to come. Try to put down at least 20% on your home, don't buy the most expensive home you can afford. Finally, your total costs of ownership – mortgage, home insurance, property taxes and homeowner's association shouldn't exceed 25% of your take-home pay.
#5 Save However You Can
Different tactics to save up money work better for different people, but as long as you're saving money, it's a good thing. Sending a dedicated chunk of your paycheck to a savings account, investing windfalls like bonuses in savings bonds or high-yield CDs and having a piggy bank for spare change that you deposit when it gets full are all valid ideas.
#6 Don't Play the Tax Refund Game
It may feel like a gift from the government when you get a tax refund, but it's important to remember that's your money that you've been gifting the government with all year long. Instead of having out interest-free loans to the Feds, adjust your withholdings so you end up getting back just a few bucks or writing a check for a few bucks.
#7 Don't Increase Spending After a Raise
When you get a raise, try to put the difference in pay towards savings rather than more spending. Most people see a bump in income as an opportunity to upgrade their lifestyle, but if you can keep your spending in check and use the additional income to invest in retirement or pay down debt, that's a much smarter approach.
#8 Don't Spoil You Kids
Not only is spoiling your children a costly policy, but it's not healthy for them. Kids that are overindulged grow up to be spoiled consumers that may end up in money trouble. Set yourself up as a financial role model for your kids to benefit everyone. Let them see you make smart money choices, work hard and save.