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Well, we made it boys and girls. It’s 2018. Since the turn of the calendar is a time for reflection I thought I’d write up a piece on personal financial tips that may be helpful. It’s probably worth noting that I’m not a financial wizard; I’m just a guy that pays off his bills at the end of each month.
Times Magazine (read: my girlfriend ) placed me as number 42 in their ‘100 Most Frugal Boys of 2017’ and it’s been said on Lulu that I’m ‘Cheaper than McDonalds.’ Chase Bank has said that I ‘have a nice haircut and pay my bills on time.’
Have a budget
Ugh, the dreaded B word. Typically when someone thinks of budget they think of a complex excel workbook with hundreds of rows and categories to track potential spending. All I’m proposing is a simple inflows and outflows section. Inflows are the money you earn from your J O B. Your outflows can consist of how much you spend on groceries each month, rent, utility bills, car payment, and student loans. After those necessities are taken care of you have your money for alcohol and savings.
Pay off your student loans
Set up a payment plan. Figure out how many years you’d like to take to pay off your student loans. From there you can figure out your projected monthly payments and see if that fits within your budget (see above). While student loans are a pain in the ass and the cost of higher education is much higher than it needs to be, that degree that you earned helped you get that amazing job that you absolutely love. I was fortunate enough to be able to pay off my student loans in two years by taking this approach and I gotta say it’s nice having that extra walking around cash to save (buy alcohol).
Pay your credit cards off at the end of every month
Buying things on your credit cards can get you in trouble quickly. While credit cards offer you the option to just make a minimum payment each month, I’d suggest that if you’re able to, pay off your entire monthly balance. That way the balance on there is not accumulating month after month and you start with a clean slate. If you’re paying off your credit card without issue I’d suggest opening a second one with different rewards. Having the second credit card will increase your total available limit, which reduces your balance-to-limit ratio, and overall will have a positive effect on your credit score.
Use secure passwords
I had my bank account hacked into when I purchased new checks. They used my social security number to log in, change my contact information so I wouldn’t find out of the notifications, and spammed my emails.
While I did eventually get my money back, because it’s FDIC insured, it was a big pain (and kind of violating tbh). Make sure to update your security questions and use a secure password. When possible, use 2 factor authentication or google authenticator. Remembering all those is certainly difficult, so write them down and store them in a safe location. Since PGP is such a tight knit community, I’ll even volunteer to store them for you. Just send them to me in an email, along with your social security number and list of security questions, and I’ll be sure to keep them safe!
Save money
Take your paycheck, see how much you should have left over, and move a percentage of that money into your savings account every month. If you want to go a step further, open a high yield savings account at a separate bank and put your savings there. That way there’s less temptation to spend the excess money and it can just sit there and safely earn interest. Capital One, Synchrony Bank, and Barclays all offer 1.30% savings / money market accounts. This may not seem very high but is a heck of a lot more than the .1% interest you’re earning right now.
Invest only what you can lose
Finally on financial tips that nobody asked from a guy named Nick- only invest what you can lose. Seems that people get themselves into trouble throwing money at an investment (penny stocks, cryptocurrencies, gambling) thinking that it can only go up. Well, they’re wrong. Look at your balances in your bank accounts and your budget that you made, take out only an amount that you’d feel comfortable with losing, and invest that. Eventually if your investments hit and you start making dough, put back your initial investment amount into your savings. Now you’re just working off of profits baby!
Now go out and celebrate the new financially savvy version of you! I suggest going clubbing…. At a wholesale club like Costco and buying a bunch of wine with your new Discover IT card since it’s 5% cash back this quarter! It’s 2018 after all, live it up!.
Image via Shutterstock
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@ellisnd02
@ellisnd
Awesome advice. Can’t underscore enough how valuable credit card points are, especially for travel. I just finished booking a 2 week trip to London and Paris in the spring and with the help of points I paid 30% of what I normally would’ve paid for flights and hotels.
Just hammer altcoins recklessly, that’s my play these days.
What is this “pay off” you speak of and how do you do it?
Also, does sports gambling on things your guy promised as a “sure thing” count as wise investing?
I’ve always just paid off what I spent at the end of the month. But for someone who lets their balances roll over that can be more difficult. I’d start with paying off your current month + a percentage of what you’d had outstanding. Eventually you’ll get there.
The only sure thing for sports gambling is betting against the Browns.
Paid off at the end of the month? Wait until you get married. I miss those days.
Didn’t you get married like a week ago?
5 months of marriage means 5 months of credit card statements
Agree except for taking the money out of your investments. Don’t ever take money out of an investment account unless you really, really need it.
Excellent article, EllisND.
I would also recommend an “oh shit” budget which will cover anywhere from 6 months-2 years of expenses if you lose your job. My industry is somewhat volatile so this is a necessity.
x2 – emergency fund of about 6 months will cover most people. Coming up with a budget helps with determining an emergency fund too, so #synergy with the article.
open a 0% APR credit card, casually spend like you normally would, gain miles/points, pay off balance before 0% introductorary rate is over. then open another 0% APR credit card.
I’ve done this 3 times, improved my credit score, haven’t paid for a flight in years, and haven’t paid a penny in interest.
You do know that if you pay off the balance every month you don’t get hit with interest even if you don’t have a 0% card?
He’s going to have 15 cards all with no balances.
So what happens after the 0% is over? Do you just have a massive (principal only) balance?
Nope, I pay off the balance before the 0% is over. Once it’s over, I open another one
Ellis great article. I can’t say I’d go with Nick’s move, but what about closing & opening a credit card repeatedly. I’m getting jelly hearing about all the fancy rewards CC especially when I have a crappy 1-2-3 CC from BofA and potentially looking to close that one to take by business elsewhere. Impart your Ben Bernake like fiscal knowledge.
Isn’t that eventually going to start negatively affecting your credit score? I thought open lines of credit that are not being utilized is a bad thing…
Very minimal
But what is your credit score? Also one thing to note is credit cards are great but make sure you either have a higher limit or don’t put everything on them. Utilization can have a negative impact on your credit score even if you pay it off every month in full (why I upped my limit and so I could eventually get the chase reserve with a friend rec from @workfromhome).
The chase reserve is everything <3
Sup?
I basically said “yes” when AMEX contacted me and offered the Platinum Card that’s made of metal solely because it comes in a nicely finished wood box/holder thing because I don’t really care about much these days but I do appreciate a nicely finished piece of woodwork. Oh, and because you get like 5x Rewards points for travel and hotels so I can escape my existence ;(
the funny thing about personal finance is that most people literally don’t know how much money they spent last month. “I guess i spent that much” they say.
this is why pf is more behavioral than anything. and why for the first month i recommend simply tracking your spending and seeing if you actually break even. then we can learn about percentage budgeting and interest rates and IRAs
Absolutely this. I went back a few months ago and actually downloaded my transactions and added up all the unnecessary expenses and it was pretty staggering how much and how fast it adds up. Logged back in to my Mint account after that
Unless you want to die at your desk, budget money for retirement accounts.
Anyone have suggestions for setting up a budget when your monthly income can fluctuate drastically?
Base your budget upon the low point of your monthly income and throw the extra money money from the good months into savings to use later. The idea here is to use extra money from your good income months to balance out your bad income months into an average monthly income over a year (or some other reasonable time span).
Then, once you’ve done that, you can adjust your spending based on your average yearly (in my example) income.
Thanks for the suggestion.