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5 Pieces of Money Advice For Everyone

  July 16

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money advice for everyoneThe following is contribution by Celina Jones. If you are interested in posting on BudgetBlonde, please e-mail me at Cat [at] BudgetBlonde [dot] com.

It can be hard to determine whether a particular piece of money advice is right for you, and the Internet is full of ideas and opinions!

However, there are some tried and true pieces of advice that almost everyone can benefit from.

Here they are:

1. Budget Even if You’re Doing Well

Budgeting is an essential first step when it comes to good money management. Unfortunately, there is this stigma that comes with the word “budget”. When people are strapped for cash they say, “I’m on a budget,” and the word has become synonymous with tough times.

This is far from accurate. 

Budgeting isn’t just for when you’re financially lacking. In fact, budgeting can do a lot of good for people in all income brackets:

  • Budgeting shows you where you are wasting money.
  • It eliminates the guess work. You’ll never say, “I’m not sure if we can afford that,” because with a budget you can know what you can and can’t afford.
  • It gives you a financial GPS. You know where you stand, and you know where you’re going.
  • It turns money from fuel into a tool. When you don’t have a budget, you have a limited idea of how much money you have. When you are on a budget, your money works for you.
  • When your money works for you, it empowers you to save and meet your money goals.

2. Handle Your Own Money

When it comes to budgeting and managing finances, some people may feel the need to hire an accountant and just hand over the reins. Where something like taxes is concerned, you may have to outsource your money management, but for the most part you should be able to handle the day-to-day, which helps you stay aware of your own money matters.

3. Pay Off Credit Cards Monthly

Paying off your credit cards in full every month is really the best option. This allows you to avoid paying interest, and it’s good for your credit score not to go past a due date. Credit card debt is dangerous because a little can turn into a lot before you know it. There are a few groups that offer free advice to people in this position, but it’s best to avoid it all together.

4. Don’t Inflate

If you have recently gotten a raise or have, in some way, increased your income in a significant way, you may become tempted by lifestyle inflation. This is the urge to match an increase in income with an increase in spending, thus inflating the overall cost of your lifestyle.

Once you inflate your lifestyle, it is very hard to return to your more frugal state, so first look at how your increase in income can positively affect your budget and remember to continue to live within your means.

5. Be Smart With Unexpected Money

Let’s say you have recently come into some unexpected money through an inheritance or maybe you won it somehow. You might think that since you already have a financial plan without it then its okay to spend it all on whatever you want. Anything from a huge lottery win to a Christmas bonus may tempt you into some splurging. Be wary of this for the following reasons:

  • Most money that suddenly comes into your hands is taxable so you should set aside enough of the new money to pay its own tax.
  • Consider your financial goals that you had before the sudden windfall. Did you have debts? Were you saving for your kid’s college fund? Ask yourself how this new money can bolster your budget and possibly help you achieve your goals early.
  • If you have no debt and you have a secure financial future, then consider setting aside money for an emergency fund. You never know what might happen and a good safety net is helpful.
  • It is okay to reap a portion of the rewards, though. Some suggest spending 10% of a windfall on anything you want!

Ultimately, these five tips can apply to a lot of different types of personal finance situations, so definitely consider them to see if they can have a positive impact on your life!

Celina Jones is a consultant and a personal finance writer who loves sharing money tips with the world.

Editor’s Note: I definitely agree with Celina’s tips. The first one about budgets reminded me about my post “Being on a Budget Doesn’t Mean You’re Poor.” I still think that being on a budget means you’re smart, and I’m a big advocate of it!

What do you think is the #1 money tip that can apply to everyone?

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25 responses to “5 Pieces of Money Advice For Everyone

  1. Great article Celina. I handle my own money and when I got a raise, I deflated and started saving more money. Any extra money that comes in goes right into my savings or investment accounts, depending on my current need.

  2. I admit that I used to be pretty bad at budgeting. I always lived within my means so I felt it was unnecessary and restrictive. Now I feel differently. Shannon taught me to see it from another perspective – having a budget actually frees you to spend your money on the things that matter instead of mindlessly spending on things that don’t. And if I’m being honest, I spent a lot of money on things that I really didn’t care about. D’oh! Now I follow a simple budget because if it’s get too complicated I find myself rebelling, but a budget definitely makes a difference.

    1. Yeah girl!! I totally spent on things I didn’t need either, most notably on a big townhome that we rented but I have left the dark side now haha!!

    1. I know! We’re going to do the same. I just got a modest 3% raise, and all I did was add more to my student loan payment, haha!

  3. It’s true! The most financially well-off people I know still stick to a budget every month, even if it doesn’t look like it. Great article with practical advice that makes sense for everyone!

  4. This is great advice. It’s easy to get off track with personal finances, but it’s important to try not to at all costs. I like the first tip because I feel like most people think budgets are just for poor people. That’s definitely not the case.

  5. The tip of not inflating your lifestyle has a universal application. Over time, we are likely to earn more as our skills improve and experience is gained. A sure fire path to wealth is to keep spending flat while our incomes improve.

  6. Great article and wonderful tips!! Tip #1 definitely resonated with me the most. For the longest time, my husband and I thought a budget wasn’t necessary because we both made pretty good money. Boy were we wrong! What we didn’t realize was that we ended up wasting a lot of money by spending it all on things we didn’t need, instead of saving it or paying down student loan debt. When we finally sat down and formed a budget, we were shocked by how much money we were wasting every month.

  7. I like these tips!

    I especially like #1. We still budget everything…it really helps to get a visual on your spending and set limits on yourself…no matter how well you’re doing.

  8. thank you i needed to see this 🙂 i have been saying on my own blog that being on a budget doesnt mean your broke for sooooo long but seems most ppl think the opposite

  9. Start young with retirement! Of course that only applies to everyone if you are young right now. ha ha! I agree that budget has a stigma attached to it. People think it’s some kind of prison sentence. A lot of people change the verbiage to say “spending plan.” to make it more positive sounding.

  10. Very good tips compilation cat. Paying credit cards monthly is important to maintain good credit score. I usually minimize it usage as much I can. I follow –>more you save is more you earn

  11. I love the tips! I especially like tip #4. I think that is one of the biggest reasons why people fall behind. After getting the first job, I know people who started spending much more than their college days. Then with each promotion, they started living it up more and more.

  12. So I don’t budget to the extent this article advocates… I probably should. I have a minimum monthly savings goal and if I meet it consistently in a manner that is on track to average to the annual savings goal I have, I don’t worry about budgeting too much. My annual savings goals are aggressive, so I know if I am on track I am living frugaly.

  13. I especially love tip #1. As Celina has said, there is still such a big stigma against budgeting. But it’s useful for everyone, regardless of your income level.

  14. Good advice on setting aside money to pay taxes on any unexpected windfall. It’s not the first thing you think about when you get some extra cash. I’d also add in understanding fully what triggers a tax event.

  15. These are great! I did number 2 for a while; I handed over complete control of our finances to my husband. While he did a good job handling everything, and all the bills were paid on time, I began to feel lost. I also had no idea what our financial situation looked like! While his organizational skills still make sure the bills are paid on time, I am now an active participant in all financial decisions and I feel much better about it. It also keeps me accountable and helps me stick to our budget!

  16. LOVE this, Celina! Great point about how budget does not mean that you’re strapped, or poor. Any smart money manager will use a budget, no matter how much cash they have.

  17. Solid tips. I actually just got a pretty significant raise and, as you mention, it is important to focus on putting the extra income to good use and not towards things I don’t need.

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