My Favorite Money Tips

Happy Thursday! I wanted to discuss my favorite money tips and invite you to do the same in the comments.

Disclaimer: I am not a financial advisor or any kind of professional in the tax/finance arena. These are all based on my own experience.

Tip 1: Live Within Your Means

The best thing I did for my current life was that when I was a student without any meaningful income, I lived like a student without a meaningful income. I ate very inexpensively, I did not shop for new clothes often, I took advantage of tons of free events or meals hosted by my university. 

This is, in my opinion, the absolute most foundational tip for getting a handle on finances and then getting ahead.

Wrapped up in this is avoiding debt. If the J. Crew blouse offers to 4 easy payments, and that seems easier for you because the full price of the blouse is not something you can afford... please do not finance a shirt from J. Crew. If you think that you can split a purchase across several credit card payments, you might just not be able to afford that thing. Getting caught in a credit card debt loop is a vicious thing, and the credit card companies are also very good at keeping you in that loop. Best to just avoid it.

Tip 2: Budget, Or Do Something Similar

My husband and I do not have a formal budget. And when I was single, I never did either. However, when we selected where we live, we did calculate our monthly income, subtracted taxes, and tried to find a living situation that fit within approximately 35% of our post-tax income. 

I also keep a very close eye on my accounts with the app Mint. Every day, I can see how much I have in my investments, retirement accounts, checking accounts, etc. If a particularly large purchase has made a dent in my checking account, I avoid takeout for a week to just keep things on balance. So for me, a formal budget system has not been necessary, but I do keep track of where our money goes in a way that works for us.

Tip 3: If You Can Handle a Credit Card, Make it Work for You

If you have trouble keeping up with credit card payments, don't get one. Just pay with cash or a debit card. But if you are at a stage where you pay your credit card monthly and do not have debt sitting and waiting to be satisfied, it can be really satisfying to make your credit card work for you: I'm talking points.

At this time, considering where most of our money goes, I have a general 1.5% cash back credit card. And one that gives more cash back for dining, grocery stores, and restaurants. However, you can get credit cards that give significant cash back for travel and gas stations, for entertainment, etc. If you purchase a lot of things from Amazon, the Chase Amazon credit card may be a good fit for you. Do a little research, and redeem that cash back so that you can reclaim some of your hard earned money. But, no amount of cash back will make up for the interest charges if you cannot make your credit card payments, so use it responsibly.

Tip 4: Save for Retirement

If you take the time to learn how much of your income needs to go to regular living expenses... and if you can reduce that amount by finding a cheaper apartment, cooking at home for two more nights per week, skipping your weekly trip to bottomless brunch... you can allot your remaining income to save for retirement.

Max out your 401(k) contributions: I love contributing to my 401(k). It sets me up for a more comfortable retirement, it will be there even if Social Security is bankrupt by the time my age cohort retires, and it reduces my tax burden today. As Michael Scott from The Office says, "Win, win, win." Oh, and lots of employers match your contributions... so there's some more free money for you if you participate! Win, win, win, win.

You may want to save for a house before you save for retirement. Or you may want to save for a new car before you save for retirement. But I do think that it's a very good idea to save early for your retirement, and it's important to remember that you can take out a loan to fund your purchase of a home... no one is giving loans to the elderly (because they know the elderly won't pay them back). And no one is giving loans for free. Saving for retirement is a very common piece of financial advice for good reason: your future self will thank you.

Tip 5: Talk About Money!

I don't mean that you need to introduce yourself to a new friend and ask how much money they make. But I do think that we should be able to discuss our financial goals and concerns with friends and family. I think it's very smart to ask your more senior colleague if they have any tips for making the most of the company's benefits package. It's a good idea--if you're a bit more established--to give advice to younger people around you. 

My company, for instance, has a stock purchase plan. There is literally zero risk (because you don't even need to hold the stock--so you don't have the risk of the bottom falling out of the stock), and there is only a benefit to contributing (the company matches). However, it takes some paperwork to take advantage of. I cannot tell you how many of my friends in my office don't use it, because they don't want to do the paperwork! You can give the tip to your younger colleague and even offer to walk them through the forms if you know how to do it.

That's what I have for today: how about you? Any good money tips?

Today's Delights:

• This is going to be a 3-day weekend because Monday is a holiday, and I am very excited for that!
• I did Ally Love's Broadway Ride last night on the Peloton, and it was great!
• Noom progress: today I weighed in at 167.6. It is not an all-time low, but my general trajectory is still good! I'm proud of myself.

Find something to delight in, A