Five Things That Helped Me With My Finances!
Financial stability doesn’t happen overnight and sometimes can feel impossible, depending on where you are on your journey. The thing about personal finance is that it’s personal, and it’s not a one size fits all approach.
Over the years, there are many things I’ve done to set myself up financially and I’ll share five (5) of these tips!
1. If you know me, you know I despise car payments! But why?
Honestly, it’s mostly because I have seen some extremely high car payments that take over people’s budgets, keep them living paycheck to paycheck and simply have them strapped for cash regularly. As of March 2023, NerdWallet reported the average used car payment in the USA is $526 and the average new car payment is $716 on a monthly basis.
Of course it’s not always realistic to avoid car payments altogether. I’ve paid cash before for my first car that lasted for quite a few years and I’ve had a small car loan in the past when I was managing my cash flow, but paid it off in a short time. What I try to get people to avoid is having extremely high car payments, that cause them to be in a financial bind. I’ve had two (2) cars in my life and I still own my 2nd car for almost 5 years, which I own free and clear. Not having a large car payment has helped me tremendously with my finances!
2. I don’t bank with “big banks”. What does that mean?
In the past, I used to bank with traditional brick and mortar banks, the “big name” ones you’re used to seeing and hearing about. However, I stopped almost a decade ago, when I discovered they charged various fees and required minimums, just for opening an account. Since then, I bank with credit unions and online high yield savings accounts (HYSA). These accounts are all FDIC insured and I obtain the highest interest rates to maximize my savings earnings and avoid useless fees altogether.
3. Are Credit Cards Bad? No…
Credit cards get a bad rep, but I use credit cards very responsibly. I use credit cards primarily to secure my banking information and bank accounts. In addition, I earn and maximize rewards for travel using the credit cards that I use now. Credit cards also offer more protection vs using a debit card.
The main habit I’ve instilled in myself is paying my credit card off regularly, multiple times a month to ensure I’m not overspending.
4. Budgeting is a Must!
I create a budget each month and track my expenses regularly. I have been a budgeter since I was a broke college student managing my scholarship money, grants and any money I received. These skills have been developed overtime and now I have a robust money management routine!
5. Focus on Increasing Income + Avoiding Lifestyle Creep
This is one of the most important tips I’ve mastered throughout my financial journey. The ability to find ways to increase my income, but avoid lifestyle creep along the way has been gold! When you begin to earn more, you may want to increase all of your spending.
Here’s why you should try to avoid doing this:
• You can develop terrible spending habits that can possibly lead you into debt
• Lifestyle creep can possibly have you tied to a specific job because without it, you wouldn’t be able to keep up with your inflated expenses
• Yes, you can upgrade your lifestyle (I have), but I’m very mindful of HOW and still prioritize financial goals, so I have a balance
I still learn new things everyday to continue to improve my finances. Staying focused on my financial journey will always be my top priority, and I hope it will be for you too!
Here's some additional blog posts:
Are Credit Cards Bad? How to Budget Effectively with Credit Cards
https://www.itsfinanciallywinning.com/blog/budgetingwithcreditcards
