(photo by Kelly Sikkema on Unsplash)
Here are nine personal finance ideas…
When possible, pay bills by credit card to earn credit card points. Be careful though, as some vendors may charge an extra fee when paying by credit card. Ensure that you have enough cash on hand to cover your charge, and pay your credit card bill in full each month. It’s been my experience that it takes a lot of spending to earn enough points to buy things for free. Only use credit card for necessary purchases. It has still been worth it for me. I earned enough points for a beginner $200 electric guitar and amp that has lasted for several years. I’ve ordered books here and there for $20 credits. And occasionally, I have enough points to pay a small portion of an Amazon bill with credits. Small payoffs yes, but still free money if you use your charge card in a healthy way.
Periodically call your credit card company to request an increase in your credit limit. As a valued customer who pays your credit card bill on time each month, the credit card company may approve your request. It’s always good to have additional credit on hand for emergency purposes. I have not had the need for this extra credit yet, and hopefully never will. If an emergency did occur, I would probably use my emergency cash fund first, so not to incur unnecessary interest charges. However, if I ever had a big life emergency, it’s good to know that I’ve got this extra amount available to me.
Periodically check your credit score. The higher the score, the more benefits to you, such as: lower interest rates offered on loans, access to better credit cards, insurance discounts, more housing options, etc. You are entitled to one free copy of your credit score every twelve months from each of the three nationwide credit reporting companies (Equifax, Experian, TransUnion). You will need to share your name, address, social security number, and date of birth to verify your identity. Some credit card companies offer free credit score lookups too.
Reconcile bank and credit card statements on a monthly basis. It is helpful to know how much money is available to you in your accounts each month. However, another important reason to stay on top of this is to ensure that no fraudulent transactions have been posted to your accounts. If, for example, someone illegally used your credit card to make purchases, you have a limited timeframe to contact your credit card company to file a complaint and to receive a credit back onto your card.
Contribute to your employer’s retirement plan, especially if they offer an employer match up to a certain percent. At a minimum, contribute enough to earn the full employer match. This is free money to you for retirement.
Spend less than you earn. Live below your means. It sounds easy but is not. Create a budget that lists out all income sources minus all expense items. Track expenses and assess if they are truly needed. Cut expenses when possible. Brainstorm ways to bring in extra income.
Pay yourself first. Put money aside before paying bills. If in debt, pay off first. Then build an emergency fund. And then save, save, save.
Invest your savings wisely. It’s difficult in the current economic environment to find investments that earn income at a higher rate than inflation. Interest on savings accounts, CDs, and bonds are non-existent. And the stock market is at all time highs. No one really knows which direction the stock market will go. It can certainly keep going up from here. Personally, I’m waiting for a drop before I invest. But I’ve been wrong in my assumption for quite some time, so what do I know. Corrections in the market are healthy. The stock market has not had a 10% correction since Feb 2018. “According to data from market analytics firm Yardeni Research, the S&P500 has undergone 38 corrections since the beginning of 1950. That’s an average decline of at least 10% every 1.87 years.” So it’s tough right now to decide how best to save. Everyone has different levels of risk. Determine your risk profile. Holding cash for a bit before making a decision is an option for sure.
Invest in yourself. You are your most valued asset. Grow your knowledge in topics that inspire you. Spend money on activities that lift up your spirit.
Wonderful tips Marc. My husband and I were lucky and able to pay off our credit card bills a few years ago. We did what you first suggested and created a budget by figuring out what our expenses were each month. Sadly, many people don’t ever do this and then fall short because they’ve spent more than they earn. BIG EYE OPENER! It was much easier after we did this. Today we have a CC that when used, we earn back money on every purchase. It isn’t a lot, but it definitely adds up. Some years we use it on things here and there as needed. Other times we use it as soft of a Christmas fund. We save it each month and use it for Christmas expenses, then get more back for using to make purchases 🙂 Like you said though, make sure to pay them off each month or you will spend the “extra” paying interest fees 🙁 Thanks again for the wonderful tips and suggestions.
Samantha, thanks for stopping by and commenting. It’s great to hear that you and your husband already have these tasks in place. Continued success!
Thanks for the great tips, Marc. I have never had to call the credit card to request an increase – they kept making the offer. I think that could be a problem for some people. We are nearing retirement and have recently amalgamated with a mortgage loan to reduce high credit payments. We now have no-fee cards that do not offer points and have reduced our credit limits, which helps ensure we will be even more aware of our spending. It is such a relief to have things at a more manageable level that we can pay off every month. I’m sure that your services are a welcome support to people.
Thanks for reading and commenting. You are doing a great financial job. Keep it up.
My bills all changes extra if you pay by credit card. So, I never do that one. It’s not easy for me to save when all of my money goes to bills and food. But, wonderful tips.
Hi Brenda, yes, I get it. Inflation keeps going up, and so do our expenses. If you scrutinized your expenses, are there any that can be lessened or eliminated? “Pay yourself first” is always a good method to save money, even if it’s only a few dollars at a time. Good luck to you!