5 Smart Things to do With Your Money
The following was written as a guest post for MI:
Learning to make your money work for you is a good idea for anyone who has suffered from the economy in recent years. Something as simple as algebra lessons can help you in both your personal and business life. Investing in yourself is a good way to kick-start your career and move up the ladder. There are obviously other ways to increase your financial well being. Pick the ones that best suit your needs and you could soon see a turnaround in your finances, provided you pick a method and stay with it.
5 Tips that can decrease debt and increase savings
- One of the first things that should be done is to start saving money and when you compare savings accounts you can choose the one that has the most favorable terms and interest rates. When you compare savings accounts it lets you look at a variety of factors that could impact your money’s earnings potential. This encompasses everything from the fees that the bank charges to how high their interest rates are. Putting aside even a few dollars a month after you compare savings accounts can soon add up to a substantial amount.
- Paying off debt is a good way to save a lot of money that would otherwise have to be spent on interest. The highest interest debts should always be paid off first. This typically includes credit cards and store cards. With credit cards it is possible to switch to a low-interest card to realize savings of potentially hundreds of dollars a year. These low-interest cards should still be paid off as quickly as possible to avoid having to pay any unnecessary interest that does nothing to increase your wealth.
- Use coupons and shop when there are sales in stores. Many grocery stores have sales on canned or frozen goods. This is a good time to stock up on essentials and save money. When there is so much food on hand at home there is no need to go to restaurants. Going to restaurants is an easy way to get a meal but it can really cut into the monthly budget if moderation is not used. There are many things that can be done on a daily basis to save money, such as foregoing the daily coffee at the upmarket coffee shop.
- Investing in a Roth IRA or similar plan is a great idea for those who are younger. The money invested goes in after taxes, but by the time retirement age is reached there will not be any taxes. If your company has a match this is a good way to double the savings you put in. For those who are content to let their money grow slowly but steadily and in a completely safe manner, a certificate of deposit may be a good choice. This provides a better return than a savings account and the CDs are FDIC-insured. A good option is to consult with an investment specialist and decide on the best investment option for your needs.
- Taking courses or seminars can be a good way to further educate yourself in your chosen career. This increased knowledge and expertise can lead to career advancement and promotion that may not otherwise have been possible. Investing in yourself is a good way to kick-start your career and move up the ladder. People who are willing to put in the extra effort are always noticed by their employers. Another way to invest in yourself is to start a business on the side doing something you love. Put a bit of money into learning more about something you already know or are new at. This can lead to new business opportunities and financial growth.
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We’re doing all but the last tip. I do plan to further educate myself on the subject once we are out of debt, though. I’m kind of clueless with stocks and bonds and what to do once we get out of debt. (Did I just admit that? I’m way too honest sometimes!)
I see you have a blog that you are monetizing and I would consider that to fall under “Another way to invest in yourself is to start a business on the side doing something you love”.
I think most people don’t think of doing #5. They are just content in their careers and don’t see the need to further advance their skills. It depends on their careers though. In some fields you have no choice but to continually expand your skills or you become obsolete. In other careers, once you master the basics, you’re pretty much set.
It’s hard for me to think of any white collar careers that wouldn’t benefit from ongoing learning. Almost everyone of them would see you with higher pay, increased responsibility and promotability if you chose to continue your education.
Very nice point. Investing in yourself is the best investment. If you can improve yourself by taking some courses then enroll to them. That way you increase your chances to increase your income.
Investing in yourself is the often overlooked passive investment.
In #4 you say Roth IRA or similar. You then talk about a company match. To get the company match you will need to be putting money into a 401k, 403b or other company run plan. Roth Ira’s are not company runs plans and thus to me not all that similar to a 401k type plan.
Many people reading your blog know this but many others do not.
They are similar in that they are both tax deferred savings plans. I get your point though regarding the difference. If you are lucky you have an employer that offers a Roth 401(k) for the best of both worlds
I am a big fan of paying yourself first, then paying off debt. It is mind blowing when you finally get out of debt and see how much “extra” money you have. As I paid down my debt (everything but my house), I kept paying the same amount to myself in savings after I had all my loans and credit cards. That’s one way to really motivate you to not get a loan.
I agree. I was somewhat overwhelmed myself to see how much “extra” money I had each month after paying off all the debts.
On point #4…why “for those who are younger”? It seems like a good idea regardless of age.
I like #5 and Mark Cuban said it best: you are the best stock you can ever own. By increasing your education and skills, you can earn a higher income. That higher income is the return on your money spent getting the education. Just make sure the money you are spending is able to get paid back when you do get a job!
Yay! 1 through 5! Just need to add a few zeros at the end (but to the left of the decimal point) and I’ll be styling…
On #5, my suggestion would be to read non-fiction books. To save money, go to the library. Read a book per week.
You’ve hit the nail on the head Steve. I just wrote a post on the passive income or how to make money work for you showing how I am earning six figure residual income from my commercial investments.
I’m a big fan of investing in yourself, even if it isn’t for a particular business interest. The world’s a big place, who knows where you’ll find a new passion or connection that can help in the future. For example, I’ve recently taken calligraphy classes and Italian language classes. I’m getting back into golf classes too. I certainly won’t ever make money in any of those pursuits.