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Financial Tips to Help You Keep, Earn & Make More Money

April 27th, 2007 by shawn · 8 Comments


I’m not rich and I’m not aiming to become rich in the popular sense of the word. But I do want to be financially comfortable; a lot of people call this financial independence. What this means is that while I don’t dream of driving a Bentley or living in a mansion, I certainly do want to always have enough money to pay all the bills, eat out whenever I feel like it, take a family vacation every year, and do a lot of cool things with my family and friends. But for most people it’s quite a struggle to get there; sometimes getting past the paycheck-to-paycheck rut seems impossible. But it is possible to rise past the doldrums of debt and live on that higher plane in life. People have done it. People are doing it. And other will do it – and you can be one of those people.

I have worked different jobs, owned and operated a couple of businesses, and have read a lot of books – so I have picked up a few tips and a bit of experience along the way. I’m not a know-it-all (no one is), but I think there are people who know a thing or two about a thing or two. So here’s a list of things I picked up from a few of those people – as well as a couple of lessons I caught on to along the way. I hope you enjoy and get something out of it!

    1. Pay off debt first. Assuming you’re like many Americans, you’re in debt. Knowing that the average credit card interest rate is 18.9% assures that unless you pay it off fast, you’ll soon be in over your head. (Of course you’ve gotta pay it off in big chunks – not just the minimum required payment.) You’d be lucky to get 5% or more on savings interest, so until your debt is gone it doesn’t make a lot of sense to sink money into savings or investments. Have a reserve emergency savings fund if you can, but make it your #1 mission to get rid of your debt.
    2. Get a degree. You need a degree to get most decent-paying jobs, but even if you are going to work for yourself you are statistically more likely to be successful if you get your degree. Read The Millionaire Next Door and you will learn that most millionaires have a college degree. A recent study found that a majority of 241 billionaires had a college degree and almost half of those had an advanced degree. There’s no denying that a college degree gives you a huge advantage over those that don’t have one, at any rate.

 

  1. Save money. It is important to make a plan and save money. (I just think you need to get rid of debt before your seriously start saving.) I recommend finding the best CD or savings interest rate you can and setting up regular deposits.
  2. Invest money. I differentiate this from just saving money in a saving account or even a money market account. Invest in stocks or business ventures. This portion of your money is what you are willing to take a bit more risk with.
  3. Be thrifty. I am a believer in conserving what you have, and it bothers me when I see people wasting money on things they don’t need. I also believe it’s foolish to pay top dollar for something instead of shopping for the best price. And I think it’s smart to search for coupon codes before buying stuff online. Thrift is a cool thing. Wasting money is uncool.
  4. Buy certain things used. There are some items that don’t make sense (financially) to buy brand-new: cars, musical instruments, computers, and guns to name a few. A cop told me that the best guns are the ones that have been fired a bunch of times, already broken in. So he shops the pawn shops. Musical instruments can be found cheaper at pawn shops or classifieds, and you will get a much better deal than buying new. Computers? I guarantee that a used laptop running Ubuntu will totally satisfy your computing needs and run better than a more expensive Vista laptop – and it will be cheaper because you didn’t pay the Microsoft Tax. And you should already know not to buy a new car because of the depreciation.
  5. Don’t buy things you don’t need.
  6. Pay cash. Not credit. In other words, don’t sign on the dotted line for things you don’t actually have the money to buy. This goes against the entire world philosophy in which we live, but you have to admit even though it might be hard to do that it will keep you out of trouble and make things easier in the long run. Remember that the credit card companies are ruthless and will cause you to lose what little money you have faster than just about anything else.
  7. Own your home. If you rent, your money is gone – there’s no denying that. When you buy your home, your “rent” will one day be reclaimed (hopefully with a profit) when you sell.
  8. Work for yourself. Many business owners make it. Many self-employed people are rich. What’s best (for these successes) is that usually they get to do something that they enjoy doing, and they get to do it their way. If you can put yourself in the position where you own the business and you get to pay yourself what you’re worth, you can become wealthy. It’s far less likely that you will ever become wealthy working for other people, then again being in business for yourself isn’t for everybody
  9. Wait to have kids. Having children isn’t cheap. Speaking practically, they cost time and money until they move out (and even then they might move back home). Ever wonder why youngest children always seem to have things better than the older kids? (If you’re the youngest, you know what I’m talking about.) It’s usually for the simple reason that young parents don’t have much. It takes a few years to build up a bit of wealth, get paid a higher, and get established. Not exactly rocket science, but not something you often hear financial gurus mention either.

If you implement these eleven things (heck if you implement just a few of these things) you’re financially ahead of most people and well on your way to accumulating wealth instead of just chasing it. Have any ideas of your own? Please let us know by posting a comment.

Good luck!

[tags]thrift, frugal, wealth, millionaire, save, invest, finances, financial, dollars, money, credit cards, tips, advice, money secrets , debt, out of debt[/tags]

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    Tags: Advice & Inspiration · DIY Life · Money Management · Thrifty Living




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    8 Comments

    Comment by Shuron
    2007-04-29 16:26:11

    Wow… I really enjoy reading your posts. Point by Point, To the Point…. Awesome!

    I have a point: Prioritize on things: Whenever you buy something, deeply think whether your really need it. Just because your colleague has it or your neighbor has it, you don’t need to buy it.

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    Comment by shawn
    2007-04-30 01:06:56

    Good point! I agree, and I can totally relate: A lot of times I’ve fallen into this “buy it now” mentality, when if I would just ask myself “is this really something I NEED or just something I WANT?” then I’d see it was a frivolous purchase. But I’ve gotten better about doing that in recent years. Maybe that’s why I still don’t own an iPod!! :) Thanks for the comment, Thilak!

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    Comment by Thilak
    2007-04-30 05:49:35

    Thanks for responding back. I hope to see you blogging with the same enthusiasm.

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    Comment by Brett McKay
    2007-05-18 21:49:22

    All great points. I think I got down living thrifty. (They don’t call me the frugal law student for nothing !) I’m working on working for myself. My dream is to be self employed. We’ll see how that works out for me.

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    Comment by Shawn
    2007-05-19 13:20:05

    Hey, you need to have goals and if you want to be self-sufficient I think thrift is something that can help you get there. By the way I love your “180 Money Saving Tips…” post.

     
     
    Comment by Chris
    2007-05-31 04:27:45

    Great post, and I would agree with all of it except for the bit about owning your own home. That should be a decision based on the market you live in. Use a decent Rent vs Buy calculator to assess whether or not the property taxes, repairs, interest payments etc will not cost you more than you will save on rent.

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    Comment by Opra
    2007-11-09 07:29:40

    Many people strive for making more money in order to want for nothing. And it’s great, it means that people have a certain aim in their life and they will do their best to achieve it.

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    Comment by shawn
    2007-11-09 14:46:27

    Yes, I think it’s a noble goal to strive for. It can be a challenge for some people, a means of giving for others, and for a lot of people a means of security.

     
     

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