Improving your financial literacy is a never ending endeavor that needs to be prioritized. As you work on improving your financial literacy, it’s important to continue your momentum.
The steps you have already taken to improve your financial understanding shouldn’t just be reserved for one month of the year (Financial Literacy Month). It’s crucial for your financial future to improve your literacy, and overall financial well-being twelve months of the year.
Over the past 30 days, we compiled a list of 30 personal finance tips; one for each day during Financial Literacy Month, but tips that you can and should use year round.
These personal finance tips are not only valuable for American households, but they are also incredibly easy to understand and start using for yourself.
Below are 30 personal finance tips that will improve your financial literacy.
Financial Tip 1 of 30: Make your finances a top priority
Financial Literacy Month exists for a reason.
The reason is simple; to help households across the United States understand and prioritize their finances.
Making your finances a top priority is one of the best ways you can ensure that you will not only improve your financial literacy but also build a better relationship with your money.
Financial Tip 2 of 30: Start with the fundamentals
A very large reason why people continue to push back getting started on their finances is that the thought alone can be confusing and complicated.
But it doesn’t have to be.
When you’re just getting started on your financial journey, it’s important to not get caught up in the complexities and to not overlook the basics. Start with building your financial plan, tracking your expenses, listing off your debts, and researching different types of insurance.
Without a proper foundation in place everything else will seem that much more difficult. Rome wasn’t built in a day — your financial foundation won’t be either.
Financial Tip 3 of 30: Build your financial plan
The absolute best thing you can do for your finances, both your current situation and your future finances, is having a plan in place to help you navigate towards reaching your goals.
Your financial plan is like a financial roadmap that will show you the steps you need to be taking to improve your finances. It also takes into consideration more than just your spending habits, it looks at your entire financial picture from your life insurance and risk tolerances to planning your estate.
The most important thing to remember is this: failing to plan is planning to fail. This could not be more true than when it comes to your finances.
The good news? You can use our free retirement calculator and build a free financial plan in just five minutes today.
Financial Tip 4 of 30: Budget consistently
Budgeting is a simple money management principle that helps you gain a better understanding of your inflow and outflow.
Your budget is a major component of your financial plan that can be used to help you manage your spending and saving habits.
Our ultimate guide to budgeting will go over everything you need to know about budgeting including what a budget is, how you can create one, the best budgeting methods and even some of our favorite budgeting tools.
Financial Tip 5 of 30: Set financial goals
It’s critical to set both short-term and long-term financial goals to make sure that you are working towards improving your financial well-being.
Setting financial goals can be a great way to give you direction, purpose, and motivation.
When setting goals, make sure that you are setting S.M.A.R.T. to improve your chances of success and reaching these goals.
Financial Tip 6 of 30: Live within your means
This is one that you’ve likely heard time and time again.
For good reason. Because of how important it is and the significance it can have on your retirement plan.
If you want to avoid taking on debt, going broke and pushing back your chances of retiring at a reasonable age, then it’s in your best interest to make sure that your overall spending is less than what you are earning to make sure you are NOT jeopardizing your financial future.
It’s always easier said than done, but it’s also much easier to practice when you stick to your values and don’t worry about how others are spending their money.
Financial Tip 7 of 30: Invest early and often
This is something that I wish I had been taught earlier. The sooner you invest, assuming you do not have any high-risk or high-interest debts, the better it will be for your long-term plan.
Thanks to the power of compound interest, years to retirement, in other words, the amount of time you are invested in, can be one of the single greatest factors for your retirement plan. In fact, it can be the difference of hundreds of thousands of dollars by the time you retire depending on when you get started.
If you’re looking for ways on how you can retire early, you’ll want to especially pay close attention to these factors.
There are a lot of financial myths that exist and one of them is that you need to be a certain age to start investing, or that you need to already have a few thousand dollars at least to begin. This could not be further than the truth.
You’ll also want to consider whether or not you’ll invest in mutual funds, index funds, or ETFs.
Financial Tip 8 of 30: Automate your contributions
Automating your weekly, bi-weekly, or even monthly contributions is a great way to ensure that you are consistently contributing towards your investments and retirement funds, without having to worry about making manual contributions yourself.
This can eliminate a lot of the time and work that is involved, while making sure that you are always working towards your financial goals, not to mention taking advantage of compound interest.
Financial Tip 9 of 30: Pay attention to your fees
Understanding the fee structure(s) and the amount you have been paying on a monthly or even annual basis in regards to fees associated with your financial services is extremely important. Account service fees, annual financial planning service fees, invest account management fees, you name it.
If you haven’t reviewed and audited your fees yet, I recommend that you sit down and make this a priority.
Chances are you will be surprised by how much you’ve been paying in fees every single year which can instead be used for things such as retirement fund contributions, padding your emergency fund, or even tucking away money for family vacations.
You work hard for your money, don’t pay unnecessary fees if you don’t have to.
Financial Tip 10 of 30: Focus on the long-term
Focusing on the long-term is one of the most certain ways to build your Net Worth.
To put it in more perspective, consider this.
If you’re investing for 10 years or longer, there have been virtually no negative results. If you’re investing for 15 years or longer, there has never been a period when major North American stock markets did not yield a positive return.
Financial Tip 11 of 30: Implement the 72-Hour Rule
The 72-hour rule is a game changer when it comes to savings and focusing on value-spending.
Before making any sort of impulse purchase, pause and take 72 hours to think it through.
After 72 hours, you will likely have forgotten about making this purchase entirely. Also, you’ve just saved yourself a few dollars, maybe even a few hundred, by doing so.
Over time, this rule can be the difference of thousands of dollars and can help you shift your spending habits to focusing on things that bring you value and align with your financial plan.
Financial Tip 12 of 30: Find an accountability partner
An accountability partner is exactly what it sounds like.
Your accountability partner is there to help keep you on track when it comes to your finances; they are there to keep you motivated and to help you stay the course, especially through the challenging times.
For most people, an accountability partner is a spouse. However, an accountability partner can be any individual you trust and value their input and guidance.
Having an accountability partner can be the extra motivation you need to reach your financial goals.
Financial Tip 13 of 30: Focus on what you can control
Unfortunately, there are a lot of things that are out of your control when it comes to money. For example, you cannot control how the markets perform or even how long recessions last, when one happens.
However, there are a lot of things you can control. It’s in your best interest to focus on the things you can control, and let go of the things you have zero control over. This can be applied for everything in life, not just your finances.
For example, you can control things such as the amount of your monthly contributions, your spending habits, the investment and account management fees you are paying, and even the type(s) of insurance you have in place to protect your family and your financial security.
Financial Tip 14 of 30: Increase your earnings
It’s no secret that reducing your expenses is necessary to your financial success. But it’s equally important, if not more important, to find ways to earn extra cash and maximize your income.
Whether that’s through earning a raise, getting a side hustle, or getting a part-time job, it’s important to increase the amount you are earning.
This will help you pay off your debt, increase your savings rate, and tuck additional money away for your sinking fund to pay for your next vacation.
Financial Tip 15 of 30: Build an emergency fund
An emergency fund is there to protect you and your family’s finances (both current and future) in the case of an emergency when you need to make large and sudden payments.
It’s important to recognize that emergencies are more common than anyone of us thinks and can come in all shapes and sizes.
Here are a few examples of financial emergencies: sudden unemployment and loss of income, unexpected medical expenses, appliances suddenly breaking down, and more.
Most financial experts recommend building an emergency fund equivalent to 3-6 months worth of take-home income to sufficiently protect yourself.
Your Savology financial plan will automatically make the necessary calculation and show you how much you need to allocate towards a sufficient emergency fund.
Financial Tip 16 of 30: Shop around for your insurance
Insurance is a very critical component of your financial plan. Despite anything you’ve heard or what you think about insurance, it exists for a reason. It’s there to protect your assets and your family’s financial future.
Because insurance is so important, it’s in your best interest to not settle. Rather than taking the first policy you are offered, take your time, get a few quotes from additional providers, and shop around for the right insurance and the best deal that fits your financial plan.
If you’re new to insurance and are searching for life insurance, you’ll want to get familiar with the basics of life insurance before moving forward with anything else.
Financial Tip 17 of 30: Track your Net Worth
Tracking your Net Worth is a very under-utilized financial tool that can be used to give you a snapshot of your financial progress over time.
All of the budgeting hacks and savings tools are great, but sometimes it’s easy to get off-track when using them. Tracking your Net Worth can be a great way to analyze where you’re currently at and how far you’ve come over the years which can provide more motivation to continue improving your financial picture.
Financial Tip 18 of 30: Always pay yourself first
When it comes to your money, you are number one.
By paying yourself first, you are ensuring money goes towards your savings or retirement fund before anything else.
Most experts recommend saving anywhere between 10-20% of your take-home income. If you’re unable to start off with 10%, it’s important not to get discouraged. The most important thing, if you recall tip #7 is to invest early. So even if you only start out with 5%, that’s more than alright. Start there, and then continue increasing your savings rate as you work on your finances.
Financial Tip 19 of 30: Don’t keep up with the Joneses
Don’t worry about comparing your financial situation to others. The only thing it will ever do is distract you from reaching your goals.
When you try to keep up with others (“the Joneses”) and match their lifestyle, it can lead you down a slippery slope of taking on high-interest debts and even going broke.
Instead, focus on what you value and make sure your spending aligns with it. Otherwise, you’ll just become another financial statistic.
Financial Tip 20 of 30: Pay more than the minimums
The same way that compound interest can work in your favor, it can also work against you on your debts. This is especially the case when you take on high-interest debts, such as credit cards that are around 19% interest.
If you’re only making the minimum payments each month on these cards, it will end up costing you thousands of dollars in interest.
Pay more than the monthly minimums. What’s even better is if you are able to do this next tip.
Financial Tip 21 of 30: Pay off your credits cards
There is a common misconception that you should always maintain a balance on your credit cards as a way to build your credit. This is a financial myth and you should steer clear of anyone giving you this type of “advice”.
Paying off your cards every month ensures that you avoid paying excessive interest payments. If you can’t pay them off in full, make sure you are paying more than the monthly minimums.
Financial Tip 22 of 30: Nominate successor guardians
If you have children, nominating successor guardians should be on the top of your list so that you can ensure you are confident with who will provide care for them should you no longer be able to.
A guardian can be considered as a substitute parent. For as long as the ward (the minor child is called a ward of the guardian) is under the age of majority—age 18—the guardian has the same rights and duties as any legal parent would.
Read our Guardianship Nominations 101 article to learn more about how you can nominate a guardian and the importance of taking those steps.
Financial Tip 23 of 30: Plan your estate
Despite what you may have heard, it’s never too early to plan your estate. In fact, it’s better that you don’t leave it until the last minute.
An estate plan will guard preferences, care for successors, and defend what you have worked hard to achieve. For this reason, it is also such an integral component of any investment or financial plan.
The more time and thought you have to carefully plan and piece together your estate, the better off your family’s financial future will be.
Financial Tip 24 of 30: Take Advantage of 401(k) and HSA Matches
Take advantage of employer-matched 401(k) and HSA contributions when available.
Every plan through your employer will likely be structured differently, so it’s important to read through your compensation and benefits package in detail to fully understand how to best utilize these programs.
Remember, these exist for a reason and not taking advantage of them would be intentionally passing up opportunities to help you fund your retirement.
Financial Tip 25 of 30: Increase your savings rate as your income increases
As you start to earn more money and increase your total income, it’s important not to let go of good financial habits, but rather to reinforce them.
When your income increases, so should the amount you’re saving on a monthly basis and not the amount you are spending.
Financial Tip 26 of 30: Use Value-Based Spending to guide your spending
Value-Based Spending means that every dollar you spend should add significant value to your life and go towards helping you reach your financial goals.
This type of spending method can help you control your impulse spending and form better habits that will ultimately benefit your financial plan in the long run.
Financial Tip 27 of 30: Choose term life insurance
Term life insurance can often be more beneficial than whole life as it will provide a payout to your beneficiaries in the event of your death during the term (most common is 20 years) indicated in your contract.
Term life insurance is the easiest type of life insurance to secure, easiest to understand, easiest to work with, and it is the most affordable.
Financial Tip 28 of 30: Implement a Zero-Based Budget
A Zero-Based Budget is all about money utilization and allocation by giving every single dollar you earn a specific “task” to make sure that your money is being put to work in the most efficient way.
This ensures that there is no money left-over that can “accidentally” go towards unnecessary and impulse expenses.
Learn more about a zero-based budget and different budgeting methods here.
Financial Tip 29 of 30: Stay active and healthy
Taking care of your health should always be one of your priorities, no matter what.
Staying healthy improves the quality of your life and can also significantly decrease any required medical expenses.
Not only that, but a lot of bad lifestyle habits such as excessive drinking, smoking, and poor diets can also end up being very costly.
Financial Tip 30 of 30: Actively revisit, review and update your financial plan
Revisiting and reviewing your financial plan is a great way to make sure that you are always working towards your financial goals, and that your current situation aligns with how you will reach them.
Here at Savology, we recommend reviewing your financial plan every 3-6 months, or whenever significant life events occur.
By doing so, you’ll have the peace of mind and confidence you need to properly navigate your finances.
Putting these tips to practice
When it comes to your personal finances, it’s never just a one and done situation. It’s your job, as the proprietor of your financial life, to continually devote the time and resources that you need.
Each one of these 30 financial tips can be a great way to improve your financial literacy, along with the relationship you have with your money.
And lastly, avoid making financial literacy month the excuse to only pay attention to your finances once a year. If you are serious about your financial security then you need to approach every month of the year as financial literacy month.
After all, money never sleeps.
Your financial future starts today
Savology has helped tens of thousands of households across the United States improve their financial well-being by providing comprehensive digital financial planning. Users can get started with our free financial planning or premium monthly planning memberships, allowing them to build a personalized financial plan, holistic report card, personalized action items, and more. In addition to our consumer-facing platform, we’re helping employers across the country provide their employees with effective financial wellness benefits.