It’s always great to have money tips from the experts to help us meet our financial objectives.
According to all the surveys, improving our financial lives was the second most popular New Year’s resolution for Americans in 2020. Taking first place was getting in shape. And, as we’ve reported before, most resolutions are already forgotten by February.
What can you do to make sure you meet your 2020 financial goals? If you’re having trouble figuring out where to start or how to stay on track, here is some sage advice from the top 10 financial experts.
Top 10 Money Tips
“Tell your money what to do instead of wondering where it went. Be proactive with your money—do a budget, get rid of debt and save.” Dave Ramsey says your money should work for you, not cause you constant stress. Be proactive rather than reactive. Turn your money into a powerful tool to reach your financial goals.
Suze Orman says her top tip for 2020 is, “Live within your needs but below your means.” As someone else once said, “just because you have money doesn’t mean you have to spend all of it.” In our previous article about frugality, we provided tips on how to live a modest lifestyle that meets your needs and also helps you meet your financial goals.
A common theme among our money tips is the need to get rid of or drastically reduce debt. Chris Hogan says that the 1st step to meet your financial goals is to avoid debt. But if you have debt “own it, understand it, and attack it.” Write down your total debt, how much you pay each month and to whom. Implement a plan for getting rid of your debt. He suggests beginning with the smallest debt first so that you build up momentum.
“One financial goal to make in your 30s is to rid yourself of “bad” debt.” What is bad debt? One example is credit card debt. Sallie Krawcheck suggests that you try to use your credit cards as little as possible and make it a priority to pay off the debt you are currently carrying on your credit cards.
A top money tip from Farnoosh Torabi is, “Don’t set a savings goal that is unachievable.” You will become overwhelmed and discouraged. Start small. Save as much as you can. As your financial condition improves, save more.
This is a great money tip from Jean Chatzky. “If you can’t see it and you can’t touch it, you won’t spend it.” This is why a 401(k) retirement plan works so well, she says. The money goes straight from your paycheck to your retirement account.
John Ulzheimer’s top money tip is also about credit card debt. “Credit card debt is scientifically proven to be a riskier type of credit for lenders to extend, which means even smaller amounts…can have a significant impact to your FICO scores. It also means if you can pay it off your scores will improve a lot, and very quickly.”
“Only buy something if you’re going to use it as long as possible.” Ramit Sethi‘s money tip is a little different, but it fits in perfectly with your overall financial wellness goals. Buy items that will last. Buying something cheap is not worth it if you need to replace it every month.
Pay yourself first. “When that money is moved before you can touch it, that’s how real wealth is built.” Dave Bach says the best way to do this is to automate everything. By automating your savings, the money goes directly to your accounts, according to your instructions. There is no temptation to use the money for other purposes. By automating your bills, you create an on-time record for yourself and improve your credit score.
Barbara Corcoran suggests you put yourself on a cash diet from time to time. “When you put it on a credit card, somehow in that moment, [what you are buying] seems like great value, but when you’re putting cash out—you have limited cash, what you’ve earned that week—you’re surprised at how quickly you realize how much money you’re truly wasting.” This is a great money tip that will help you reduce your credit card debt.
Credit card debt keeps you trapped in an endless debt cycle. When you charge items to your credit card you don’t see the money moving from your account to the retailer. But when you take cash out of your wallet, and you see how much cash is left, you have a powerful reminder of how much money you have just given away. You will find that you take a bit longer to determine if the purchase is really worth it.