8 Timeless Personal Finance Tips for Financial Success

finance Oct 18, 2022

We live in a world dictated by money, wealth, economy and finance.

Our daily lives – as much as we might wish they didn’t – generate stress, and often that stress is over our personal finances.

Here is a deep-dive into 8 timeless personal finance tips to help you shake that stress.

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What is Personal Finance?

Personal finance is the term we use to refer both to the management of an individual’s or family’s finances, and to those financial activities themselves. These financial activities include:

Income
Expenditure
Credit
Debt
Savings
Protection and Insurance

In the context of this article, when we use the term ‘personal finance’, we’re referring to the measures you can employ to help manage your own (or your family’s) finances better.

Using our 8 timeless personal finance tips will not only enable you to regain control of the money you work so hard for, it may also help you to increase your monthly income and meet savings targets which previously seemed unattainable.

Here’s a brief look at some of the things you may wish to use personal finance management in order to save for:

Buying a house
Sending children to college
Retirement
Going on vacation
Traveling the world
Paying-off debts
Creating an emergency fund

The Only Personal Finance Advice You’ll Ever Need: 8 Tips for Financial Success

Smart financial living is an attainable goal. Smart financial living is – with the help of these top 8 tips for personal financial management – just around the corner. Let’s take a look.

Have a Stable Income Source and Increase it Further

In the same sense that it’s generally easier to find a new job whilst in employment, it is far easier to take control of your personal finances if you start out with a stable income source. Any job which pays you a reliably consistent amount on a regular basis gives you a good, strong foundation from which to fine tune other elements of your finances.

Once you’ve secured yourself a stable source of income, it’s then a good idea to do all you can to increase it further. After all, the more money you have coming in, the more you have to allocate to different areas of your personal budget and savings plan.

Here are a few ways you might be able to increase your primary income, or add to it:

Negotiate a higher salary with your boss based on your performance and service
Start a side hustle by monetizing your passion or starting a new business, such as:
Selling your art on Etsy, Society6, or Patreon
Become an affiliate marketer
Start a blog on a niche topic

Create a Budget, and Stick to It!

Inarguably the most sensible piece of personal finance advice out there is also the simplest: create a budget and stick to it.

A budget can be as simple or complex as you like, though the more nuanced it is the easier it typically is to follow. In essence, however, a budget is a plan for your paycheck which allocates portions of your income to specific uses.

A wise and very straightforward way to decide where you want your money to go is to stick to the age-old 50/30/20 rule. This rule stipulates that:

50% of your paycheck goes directly toward needs: rent, bills/utilities, food/groceries, insurance
30% of your paycheck goes directly toward wants: eating out, shopping, gifts and hobbies
20% of your paycheck goes directly toward savings: emergency funds, college funds, retirement plans

The second part of this personal finance tip – stick to it! – is, of course, the hardest part. Which brings us to tip number two…

Track Your Expenditures

Different people like to track their expenditures in different ways. For some, they like to keep a physical note of their purchases. Others prefer to keep tabs with a spreadsheet which they can update on a weekly basis.

Personally, I find the easiest means of tracking my expenditures to be through smart budget apps linked to my debit and credit cards. As I make each transaction, the app smartly categorizes it under groceries, eating out, utilities, etc.

This way, I am able to track my expenditures in real-time with a device we all keep in our pockets, and so can correct my spending behavior as I go to ensure I adhere to my budget.

There are thousands of these budgeting apps out there, just search for one on your smartphone’s app store and choose an app which looks right for you (and has good reviews!)

Have a Savings Plan and Automate It

In addition to ensuring we don’t go into the red, one of the major inspirations for choosing to take control of our personal finances is to start saving the money we make.

However, without an effective and deliberate plan in place, it becomes far too easy to spend every drop of money we make each month without ever placing any in our savings.

Here are a few key elements (and ways to implement each) to include in your savings plan:

How much to save each month

How much to save depends on how much you can spare, which depends on your lifestyle, income and expenditures. If possible, it’s worth attempting to adhere to the 50/30/20 rule we discussed earlier. If not, determine what you could feasibly put aside each month and lock that amount in.

When to put that amount to the side

Keep it simple – put your chosen savings amount aside as soon as your paycheck comes in. Otherwise, you’ll find it very difficult not to dip into this amount as you draw toward the end of the month.

Where to securely store your savings

I’d highly recommend you open a separate savings account with your bank, and move your savings there at the start of each month. Trying to save money in the same checking account your income is paid to can quickly become messy.

What you’ll use to help you automate your savings plan

It’s a good idea to set up a standing order with your bank so that your chosen savings amount is automatically transferred into your savings account on payday each month.

Similarly, there are lots of apps which help you to top up your savings even further, such as round-up apps which automatically transfer the cents and pennies from every purchase (rounded to the nearest dollar/pound/euro) into your savings account.

Maximize Your Employment Benefits

When looking for work, don’t just consider salary, also consider the employee benefits each company in your sector offers. Some of our largest annual expenditures tend to be for health, home, car and life insurance, as well as for surprise emergency dental and medical procedures. Shopping around for the best deal can save you money; for example, you can compare online car insurance quotes to get the best rate.

By seeking out employers who offer benefits which cover these expenses, you can effectively write off a large chunk of your current outgoings. Consequently, you can assign the amount of your income which once covered these expenses to other areas of your budget, such as savings.

Educate Yourself on Personal Finance

We know that of our 8 timeless personal finance tips for financial success, this one may seem the most obscure. Isn’t that why you’re here? To educate yourself on personal finance? Well… yes! In more ways than one, you’re already on the right path simply by reading this article.

However, we recommend you don’t stop here. There are countless resources available for free, on- and offline, which will provide you a progressively more nuanced understanding of personal finance and how to manage it. The more you learn, the more you’ll be able to take back control, clear your debts, and start saving toward your goals.

Protect Yourself by Having Proper Insurance Coverage

If you’re unable to work in a country which offers a full coverage of employee benefits (or you don’t live in a country in which healthcare and the like are free), then please make sure you protect yourself from unexpected and exorbitant expenses by investing in proper insurance coverage.

Typically, home and car insurance, medical, dental and pet insurance can cost as little as a few dollars a month each. Whilst these monthly payments may seem frustrating from the standpoint of a healthy individual, whose home seems safe and secure, you’d quickly come to appreciate the true personal financial benefit of insurance cover as soon as something went wrong.

Have an Investment Plan

Savings accounts – even those designed to be left untouched, and thus payout higher interest rates – will only ever grow your savings at a snail’s pace.

If you’d like to consistently increase your net worth, whilst putting those hard-earned savings to work, then there’s simply no better alternative than to establish a solid investment plan.

Investing isn’t for everyone, of course, but with a little time spent studying the stock market, or speaking with a friend, colleague, or professional experienced in the field, you can begin to create a stock portfolio that will steadily grow your savings over time.

Again, however, it’s important that you approach any investment with a plan:

What are you going to invest in (is ethical investment important to you?)
What stocks will give you the biggest return vs. which are safest?
How much money each month will you invest?
At what point will you sell your shares? (i.e. when they double in value, or triple?)

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Conclusion

Personal finance can be daunting, but it doesn’t have to be. With these 8 timeless personal finance tips, anyone can embark along the path to smart financial living, shrugging-off stress, saving cash, and building their income portfolio as they go.

About the Contributor

Veselin Mladenov is the Content Manager of ThriveMyWay. He has more than 10 years of experience in the field of corporate marketing and sales, and decided to pursue his passion - digital marketing and content creation.