9 Financial Hacks to Help Manage Your Money Better

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Ready to transform your financial outlook? Discover how nine financial hacks can revolutionize your approach to money management. From budgeting to investing wisely, these strategies will empower you to take control of your finances and achieve your goals. Let’s explore how you can manage your money better starting today.

Utilize Free Resources

There are a lot of free resources available for people of all ages and socio-economic statuses. These range from resources provided by the government to those provided by nonprofits and religious organizations. There’s too much to discuss here, but some of the basics include tax funded social programs provided by the Federal government like food assistance, housing help, help with utility bills, welfare, health insurance, social service, etc. You can find more information here: Government benefits | USAGov.

Also, states provide their own list of services as well. These can include help with employment, food, healthcare, rent/shelter/utility bill assistance, etc. For instance, in my home state of South Carolina, the Department of Social Services has a webpage listing resources for people in need: Other Resources & Helping Agencies for SC Families – South Carolina Department of Social Services.

The same goes for local towns and cities. Many have free resources and events that you can take part in for free. You can check out your local government webpage and town hall to find out what’s available.

Perhaps the most overlooked and one of my favorite free resources is the public library system. Their are many public library benefits that can help you save money such as free entertainment in the form of books, ebooks, audiobooks, movies, magazines/e-magazines, newspapers, music, special events, kid events (story time, games and crafts days, etc.), book clubs and summer reading programs, etc. In addition, they also provide other benefits such as access to internet, computers, career and job-hunting resources, help with research, kid and adult educational resources, discounted admissions to local attractions, craft and hobby classes, etc. For more details please read how you can take advantage of public library benefits and save money.

Create a Budget

A personal budget is a plan for how you intend to spend your money each month. To create one, you generally need to know your financial goals, what your current income and expenses are, and how you plan to achieve your goals.

This includes first knowing where you want to go. Do you plan to retire one day? Maybe retire early? Do you have a new car purchase you’ll need to save for? Do you have debt that needs to be repaid? Knowing your financial goals will inform the decisions you make for your budget.

Next, you’ll need to track expenses and income. The income gives you an idea how much, on average, you bring home each month. If it’s an irregular income, please read, How to Budget With an Irregular Income. The expenses tell you where your money is currently going. Once you know your expenses, take the time to review them and cut out any unnecessary expenses. For instance, if you’re paying $30 a month on a streaming service that you don’t watch, you should probably consider cancelling and eliminating those expenses.

Next, you’ll need to balance your financial goals with your income and expenses. If you have more expenses than income at the end of the month, it means you’re losing money each month and can’t afford your current lifestyle. It also means you definitely aren’t able to save or invest for any financial goals you may have. To fix this, you’ll either need to raise you income, reduce your expenses, or both. To budget effectively, you’ll need to tell each dollar of your income where to go each month. By controlling where you spend your money, you’re able to direct it towards the things that bring you the most joy, both now and in the future.

For more details please read, How to Create a Simple Monthly Household Budget.

Also, some other budgeting resources include:

Build an Emergency Fund

An emergency fund is money that you have set aside for those expenses that you can’t plan for in advance. This could include emergencies like losing your job, a major house repair, a car wreck, a medical event, an appliance needing replacement, etc.

You need an emergency fund because there will be major financial expenses that you won’t be able to plan for in advance. If you don’t have an emergency fund, one bad financial surprise like a job loss or medical emergency could cause you to start missing payments on your home or car.  You may need to start selling items just to have enough cash to make it through the month.  If you don’t get caught up, you could lose everything you’ve built. 

An emergency fund allows you to easily make it past the small bumps in the road and gives you a little breathing room for the larger financial obstacles that get thrown in your path.  If you have 3-6 months of expenses in an emergency fund, that job loss may not be bad at all.  You may be able to find a job within the first couple of months, rebuild your emergency fund, and get back on your way with little to no problems.

For more information about building an emergency fund please read, Emergency Fund Guide: What, Why, & How Much Money to Save.

Pay Yourself First

There is a type of budget where you pay yourself first called a reverse budget. In the simplest terms, in entails directing money from your income straight to your financial goals (saving, investing, etc.) before spending anything on your normal expenses. The theory behind it is if you go ahead and move that money before you have a chance to spend it, especially in a place that’s not as easy to access, you’re far more likely to spend within your budget and meet your financial goals.

The easiest way to do this is to automate your savings using tools like automatic bank account transfers, split direct deposits, or work-sponsored retirement programs (pensions, 401k, 457b, etc.).

To learn more please read, Pay Yourself First: Save More Using a Reverse Budget.

Cook at Home

For a lot of people, their food budget is one of the largest expenses they have each month. Anything you can do to reduce this expense will have an outsized impact on your budget. It may seem obvious, but one of the easiest ways to cut expenses is to cook at home. It’s worth the initial expense of buying kitchen equipment (pots, pans, utensils, etc.) and the effort of learning how to shop for groceries on a budget and prepare your own meals at home. With the ability to look up countless recipes online (usually with ingredient lists), as long as you can follow directions, you can prepare an outstanding meal. Also, most of the meals you’ll cook at home will be tastier and healthier for you (less doctor’s bills, another possible major expense).

Some of our favorite recipes:

To learn more please read:

Practice the Pause Before you Buy

Practicing the pause before buying something is a simple technique that forces you to spend a little more time thinking about the purchase. Some of the benefits include:

  • Saving money – after practicing the pause, some purchases won’t be made, some purchases will be made with better prices, and some purchases may change to something that will actually bring joy into our lives
  • Limiting impulse purchases and avoiding buyer’s remorse – practicing the pause will force us to evaluate whether a purchase is something that will bring joy into our lives and is worthy of our hard earned income; many times you’ll find that, after thinking about it a little longer, the purchase isn’t worth it.
  • Breaking the habit of emotional shopping – do you have a bad habit of shopping when you’re bored, sad, or some other highly emotional state? Practicing the pause will help you identify those triggers and change your emotional shopping habits.
  • Freeing up time – less guilt from impulse buying means less time thinking about the bad purchases we’ve made. It also means less time using something we don’t enjoy simply because we purchased it.

It may sound simple, but practicing the pause before buying simply means pausing for some predetermined amount of time before making a purchase (usually above a certain threshold; say > $100). For instance, any purchase I’m unsure about or is a major purchase such as a new appliance, car, bed, etc., I try to pause a minimum of 7 days to a month before making a decision. This gives me time to evaluate whether I need the item, different purchase options, different price points and promotions; and make a thoughtful decision. I have yet to regret a purchasing decision I’ve made using this technique.

To learn more please read: Practice the Pause Prior to Making a Purchase.

Pay Down Debt Strategically

If you have debt, it’s important to have a smart game plan for paying it back. Two of the most common methods are the Debt Snowball method and the Debt Avalanche. The Debt Snowball entails paying back debt in order from smallest balance to highest where as the Debt Avalanche prescribes paying back the debt with the highest interest rate first. If you stick with it, the Debt Avalanche will pay back your debt the fastest and with the least amount of interest paid. The Debt Snowball works better for folks who need the small wins to keep going. You make progress in actually closing loans faster using the Debt Snowball, so you’ll accumulate “wins” faster than on the Debt Avalanche which could be more encouraging and cause someone to stick with their debt repayment strategy.

If you have the will power, I strongly encourage the Debt Avalanche method as it’s the most efficient, but if you think you’ll become easily discouraged, it may be worth it to give the Debt Snowball method a try.

To learn more please read:

Invest in Yourself

There is no better return on investment than the one you’ll get from personal improvement. Whether this is learning a new skill, going back to college, reading a book or article, learning from a mentor, etc. The better you are, the more successful you’ll be financially (and really in all aspects of life).

Some simple ways to improve yourself include:

  • Reading a book, article, blog post, etc. about a topic that you’re interested in
  • Inviting a senior member of your workplace that you think highly of to coffee or lunch to talk
  • Attending seminars or other events
  • Joining professional organizations in your field and taking advantage of the membership benefits
  • Join nonprofits to interact with other people and learn new skills
  • Take on DIY projects that you feel comfortable tackling
  • Go back to school (especially if it will directly help you in your career or personal life)

There are many different ways to invest in yourself. The key to efficient improvement is understanding what your goals are and choosing opportunities that will help you achieve those goals.

Invest Wisely

Proper investing is one of the most important skills to learn in life as it can be the difference between a future of poverty and abundance.

Time in Market is Far More Important than Market Timing

The most important thing to learn about investing is that time in market is far more important than market timing. What this means is you need to start investing today. Don’t worry about how the market looks right now, with dollar cost averaging and a long enough time frame, those investing costs will even out.

For a simple example, if you just invested $10,000 in an S&P 500 index fund (typical 10% interest per year) at 25 years old and reinvested the earnings, by 60 your original $10,000 would grow to ~$280,000 on average.  This is 28x your original investment!

All other variables the same, if you started at 35, it would only grow to ~$108,000. Those 10 years early on account for a difference of ~$172,000.

Take Advantage of the Company Match

The next most important thing is not to leave free money on the table. If your company provides a company match or other free resources, you should be taking advantage of them. Even if it’s a modest amount, that match will add up over time.

Simple is Often Better When Starting Out

When you first start off in investing, it’s best to pick the simplest and safest investment, with the lowest expenses. When my wife and I were starting out, we did just this by starting IRA’s with Vanguard and investing in the Total Stock Market Index Fund. This fund is designed to provide investors with exposure to the entire U.S. equity market, so its heavily diversified across different asset classes. Also, Vanguard has some of the lowest fees in the business; for instance this fund has an expense ratio of 0.04% which means for every $10,000 you have invested you pay an annual fee of $4. This fund has returned ~11.91% on average over the last 10 years (at the time of this writing).

We’ve since learned more about investing and added riskier investments to our portfolio in pursuit of higher gains such as individual stocks and property, but we keep adding to this fund as it’s still our safest long term investment.

Take advantage of tax advantaged accounts through work, company resources such as a company match, health savings accounts, etc., diversify investment across different asset classes and minimize fees to reduce risk and maximize returns over the long term. Also, if you dollar cost average (spreading purchases over time to average out the cost you pay for the equity), you will have less risk of buying too much of an asset at a higher cost basis.

Automate Your Investing

Once you have investment goals and a plan to reach them, it’s important to stick to the plan. The easiest way to do this is to put the investing decision on autopilot. You can do this by setting up an automatic deposit to your brokerage account, send part of your paycheck to an employer sponsored retirement plan, split your direct deposit so that some of the money goes to a brokerage account, etc. There are many ways to accomplish this; the most important part is to make the investing something you don’t have to think about and put it in an account that is difficult for you to access (so you don’t take the money out and use it).

To learn more please read:

Conclusion

In conclusion, implementing these nine financial hacks can empower you to better manage your money and achieve financial success. Utilize free resources, create a budget, and build an emergency fund to establish a solid financial foundation. Prioritize paying yourself first, cook at home, and practice the pause before buying to save money and make more intentional spending decisions. Strategically pay down debt, invest in yourself, and invest wisely to further strengthen your financial position. By adopting these strategies, you’ll be well-equipped to navigate your financial journey with confidence and achieve your long-term goals.

Do you practice any of these financial hacks? Do you have any of your own that you’d like to share?