There is plenty of great personal advice out there. But how do you figure out whether or not it applies to you? Jason Stauffer, a NextAdvisor reporter, shares that there’s no single tip or money hack that will instantly turn your life around. However, some principles can guide you towards achieving your goals. You will need to find a way to apply them to your unique status or situation. So, here are the best personal finance tips to use.
Five Best Personal Finance Tips By Jason Stauffer
1. Budgeting Is More Than Just Managing Money
Stauffer said that his budget was a personalized spreadsheet he constantly updated for many years. It was part of his dream of becoming a young Warren Buffet. However, that budget rarely helped him feel less stressed about money.
During his early stint at NextAdvisor, Stauffer discovered zero-based budgeting or ZBB. Once he and his wife started to apply the method, they started saving more and feeling less anxious about money. A reasonable budget should manage your expenses and your emotional relationship with money.
With ZBB, every money that comes in is assigned to a specific purpose. They allocated funds to pay for rent, cellphone, and other expenses. Aside from that, they also allot money for more than their current bills. This strategy helped them pay off student loans sooner than scheduled.
ZBB also helped the couple build an emergency fund. For example, when their cat needed a $2,000 emergency surgery, they already have that amount available. Without sufficient emergency funds, it would have been a hindrance to their goals.
The zero-based budgeting app called You Need a Budget (YNAB) has effectively turned credit cards into debit cards.
If you want to explore ZBB, YNAB is a great place to start. But take note, the app is not free. There are lots of free or cheap ZBB templates available. And ZBB isn’t the only budgeting approach that works. As you explore different budgeting methods, focus on why you want a budget.
2. Prioritize Income Over Expenses
Some people have paid off their mortgage in less than six years and settled six-figure sums of debt. One common factor for these success stories is they constantly find ways to make more money. They engage in side hustle businesses or find better-paying jobs. Still, having a budget that works is the first step towards achieving goals.
Stauffer also shared that they are expecting their first child, and it is as vital as ever to increase household income. His wife is considering a transition from freelance to a full-time world, which would provide a more stable income. From there, they might also explore other side hustle opportunities.
Starting a freelance or side hustle might not be as challenging as you perceive. Chances are you already have hobbies and talents you could utilize or develop to augment your income.
3. Learn To Negotiate
The idea of negotiating has always been overwhelming, but it’s one of the best personal finance tips to use. In reality, dealing is usually as simple as asking for what you want. Thinking about a good offer sometimes includes offering something of value in return.
Any method of negotiation is better than no negotiation at all. Find an approach that could assist you in doing it and become more comfortable. You could try making an indirect request and evaluate if it is easier for you.
4. Be Patient and Consistent
Transforming the status of your finances takes time. Almost all financial success stories are prefaced by a long learning period and establishing momentum. Whether learning to code before becoming a tech entrepreneur or saving up for a downpayment on a house or property, significant changes take time.
If you can only take small steps, focus on taking small steps. It can be not easy seeing how fast everyone else moves or progresses. What’s not seen is how much time it took them to develop the speed you’re seeing.
5. Future Homeowners: Ask About a Zero Mortgage
The most overlooked strategy Stauffer encountered for reducing your mortgage cost is to ask for lender credits instead of a higher interest rate. The credits would be used to settle the loan fee portion of your closing costs in this situation. With a zero-cost mortgage, you’d be paying a reduced amount every time you buy a home or refinance.
When researching lenders, always ask if they have a zero-cost loan option. Then, compare your options and see which one applies to you.
