4 Personal Finance Tips That Will Change the Way You Think
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Personal Finance Tips to Live By!!!
I’m back with a few quick, simple personal finance/money tips that will change the way you think – regardless of where you are in your money journey. So without further ado, here’s a look at four personal finance tips to live by.
1. Surround yourself with the right people
You’ll hear different opinions and advice about the *right way* to manage your money. Some advice is good, but other advice isn’t, so you have to be choosy with regard to who you take financial advice from.
Just because a person means well doesn’t mean that they’re giving sound advice. Therefore, seriously consider the source.
If you don’t know much about a person’s money management skills, take any advice they give with a grain of salt – at least until doing your own research.
The same way you wouldn’t take gardening or landscaping advice from someone who has a yard full of weeds, don’t take money advice from someone who doesn’t have control over their finances.
I’ve received a lot of bad money advice from people who’ve meant well. And let’s be honest, some people like to give their two cents when it comes to money, yet they have a pattern of making poor choices with their money – so be careful.
2. Consider a passive income stream
If you’re looking to earn more money – and you don’t have an immediate need for extra income – consider building a passive income stream instead.
To be clear, though, passive income doesn’t mean that you don’t work. However, these opportunities make it possible to earn money even after you’ve completed the initial work.
This has always been my favorite way to earn additional income, and I experienced my first real taste of passive income about 11 years ago.
I had two clients that paid upfront for content I wrote for their sites. But it wasn’t a one-time payment.
They also paid me a percentage of the ad revenue from those articles. After this experience I was hooked.
Now, you’ll put in work because it takes time to build a passive income stream. Once your hustle is up and running, you can then earn income without trading time for money.
Obviously, if you have an immediate need for cash, a part-time job is probably the best option. But if you don’t, put the energy you would have spent working a part-time job toward building a passive stream.
Options can include blogging, affiliate marketing, Youtube, Teachable (online course), etc.
Also, a major benefit of a passive income stream is that it can possibly turn into something bigger. Not only can you earn money to pay off debt, build a savings, or enjoy more experiences, your hustle might become your biggest income stream. In which case you can earn money doing something you enjoy.
3. Don’t be afraid to take calculated risks
Some people have great ideas and big plans, yet they don’t make the first move due to fear of failure or the risk of losing money.
And I completely get it.
Starting a business often involves some type of investment on your part, whether you’re dipping into savings or leveraging debt.
And yes, investing in the market has its risk. Hey, even buying a house can be risky. I know from firsthand experience that you don’t always walk away with a profit.
But while it’s good to be cautious – this can prevent making poor decisions – sometimes you have to take risks.
Understand, though, there’s a big difference between a risk and a calculated risk.
The latter is often worth taking. Although there’s the risk of failure, there’s also a high probability of success. Those are the types of risks you want to take. This requires doing your homework, being realistic, and coming up with a plan.
When you consider possible outcomes (including negative ones) you’re in a better position to handle problems that arise.
4. Know the difference between cheap and frugal
The terms cheap and frugal are often used interchangeably, but there’s a difference. I’ve even heard people refer to themselves as being cheap, yet the more you talk with them, their actions are actually on the frugal side.
Now, I understand that everyone has a budget. And yes, you can only afford what you can afford.
But some people can afford to spend a little more, yet they always go for the cheapest, rock bottom prices. For them, it’s all about the price, and they could care less about quality.
There’s nothing wrong with this…it’s a personal choice. But if you’re interested in saving money long-term, being only concerned with an item’s price can backfire.
I’ve made this mistake many times in the past, where I would buy something only because it was cheap. And in my mind, I got a great deal.
But as I got older I started to realize that I had to replace a lot of the very cheap items more frequently. Once I started buying more quality items (nothing too expensive), the items didn’t have to be replaced as often.
Even though I paid a little more upfront, I saved money in the long-run.