What Is the Best Financial Advice?

There’s endless information on the internet claiming to be the “best financial advice” or “quick tips to get out of debt.” It can be hard to understand what should be a priority; or, what is relevant to your situation. Here is timeless financial advice that applies to any situation.

Start an emergency fund

An emergency fund is just what it sounds like—it’s a savings account that you have put money in for emergencies, like job loss or major home repairs. Ideally, you should have around six months of living expenses in their emergency fund (or three months if you are in a dual income household).

Not having an emergency fund will set you back financially, as you’ll most certainly face some bumps in the road throughout your life. Not having an emergency fund will mean you may have to take out a line of credit or cut back on expenses if an unexpected bill pops up.

Stick to a budget

Creating a budget that you can stick to is a critical component of financial success, no matter your goals. Working out a budget doesn’t have to be time-consuming, as there are both free and paid apps that can help. Some of these apps include You Need a Budget and Mint. They connect to your accounts and can help categorize your spending, while giving you an up close view of your habits.

Invest and diversify your portfolio

In order to grow your money, it’s time to start weighing your investment choices now. There is no such thing as investing your money too early. In fact, investing early will only help to secure you a more successful retirement. Investing can be scary, which is why it’s recommended to only deal with risky investments when you’re young, then move on to more stable investments as you approach retirement. Remember, financial advisors are an unparalleled resource when it comes to investments.

Say no to being “house poor”

Mortgage lenders are known to approve Americans for mortgages that they can’t afford. This was part of the reason for the 2008 housing bubble and the ensuing recession. While you may be able to make your mortgage payments every month, are you able to also pay all of your bills, your non-discretionary income, and save at the same time? It’s important to think smartly when you decide to buy a house. Make a list of your top priorities and decide what you can actually afford. Stay realistic and don’t let house hunting make you desperate.

Take advantage of credit opportunities

The most important rule of credit card usage is to pay off your balance in full every month to avoid interest. If you don’t have the money in your bank account, you shouldn’t use a credit. Overspending due to high credit card limits can be a major reason many get into debt.

From Senior Finance Advisor:

Some purchases are best made with your credit card. For example, online purchases are better made with your credit than debit card. This is because credit cards offer better protection against fraud than other online purchase methods. Purchases related to traveling are often good choices for your credit card. Many cards offer points or miles in relation to travel expenses, so these may be a way for you to rack up rewards. Additionally, some even offer travel perks to cardholders. These could be in the form of discounted hotels or car rentals, or access to an airport lounge. If you’re traveling outside of the country, you may be able to use a credit card that avoids foreign transaction fees.

Large entertainment or household items make good purchases for your credit card. These items usually carry larger price tags that can benefit you when it comes to credit card rewards and benefits. Credit cards can also offer you some protection when making a large purchase, as many card issuers will provide pricing and return protections.

Financial security can improve your life

The bottomline with financial advice is that sticking to a budget, using credit wisely, and making an emergency fund are surefire ways to help you financially succeed. If you’re feeling overwhelmed with your options, consider meeting with a financial advisor today.

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