It’s normal to be in debt in today’s day and age. From school loans, Credit Cards, car loans, and mortgages. Debt is all around us.

Not all debt is bad, but it’s super important to be in control of your finances and have an understanding of how it can affect your mental health and well-being.

Eliminating debt can be one of the most freeing accomplishments that is within reach for most of us if we just get a little bit smarter about how we use and save our Money.

While most financial advice will tell you to save up an emergency fund to cover a minimum of 3 months of expenses first, I think that’s much easier said than done, and will naturally come over time if everything else falls into place first. So, begin with these pillars and the savings and emergency fund will accrue over time.

Read on for some personal finance tips that will pay dividends in the long run.

Credit Cards

I still know a few people that just don’t use credit cards, and I am always baffled by this. If used responsibly, credit cards only offer numerous advantages and give you free money. However, if there is no discipline, credit cards can quickly turn into a nightmare, so do be careful.

If you don’t have a credit card yet, I recommend starting with a basic everyday cashback card that gives you points on the purchases you make most, like groceries and gas.

If you travel a lot, there are also great travel cards that allow you to get free flights after a certain amount of points, but they’re usually not as beneficial as cashback cards if you don’t travel more than 4-5 times a year, and they sometimes come with an annual fee.

Do some research, but don’t think you’ll be stuck to one card – you can always apply for another, and even use multiple cards depending on your purchases.

Whatever card you choose, make sure that you are paying off your balance in full every single month. This takes discipline, as things always come up, but your balance can double and triple before you know it, so always make sure to do everything you can to pay it off in full each month and you’ll be good.

After some time, your cashback or travel rewards will grow and you’ll be able to reward yourself. Use that money to buy yourself something nice, go on vacation, or just to pay off your statement balance. Rinse and repeat and your credit cards will be working for you in no time.

Budgeting

For me, budgeting made all the difference, even though I always had a rough idea of how much money I was spending, and where I was spending it, or at least I thought I did.

I started using Mint to keep an eye on my expenses and income. This was mostly passive and I never really created any budgets, which is what I think really helped me.

A few years ago I started using YNAB instead of Mint. I created budgets for my everyday expenses like debt and car payments, rent, groceries, and nights out, allocating a certain amount of money to each every month.

As I spend money, I categorize and approve each purchase in YNAB, giving me much more insight into my spending. It might sound tedious, but it’s not. YNAB does most of this automatically, you just have to click approve here and there.

It’s truly eye-opening to see how quickly things add up when you Pay Close Attention to them.

It’s truly eye-opening to see how quickly things add up when you pay close attention to them. Even the smallest of things can make a big impact after some time.

Budgeting is not perfect, and you won’t get it right on your first try. That’s OK. Budgeting is not meant to be some super rigid thing that can’t be changed, it should be flexible and you should adjust it as needed.

If you overspend in one category, simply move money to it from another. Now you have to be more conscious of how much you have in the category you moved money out of, but you didn’t overspend your total budget.

Depending on the amount of money coming in each month, you may or may not be able to save some of it, but try your best to do so. Allocate as much as you can to your savings and investments at the beginning of the month and try not to touch that money.

If you put money away for your future first, you will find new and creative ways to cover the rest of your expenses, even without the money you put away. Train yourself to do this frequently and to never reach for the money you’re putting away, and it will grow quicker than you think. If there is an emergency, of course, allow yourself to use this money, but only as a last resort.

Investing

As you get better about budgeting and spending your hard-earned money, start thinking about setting some aside to invest as well. Make emergency savings a priority, but setting a bit aside for investing is not a bad idea, and isn’t as scary as you might think.

Investing used to be out of reach for most because it was always looked at as complicated and expensive with all the commissions and various fees involved.

Then came Robinhood. Robinhood makes investing easy and intuitive. It doesn’t overload you with information or anything that isn’t truly necessary to start investing your money. They make it really simple.

That might sound like an advertisement, but I truly like the product and have been using it for a number of years. Not only did they make investing simple, but they also eliminated all the commissions and made it free. They truly changed the game.

I’ve tried a number of different brokerages, but always come back to Robinhood. However, there are many others out there, probably just as good, so choose one that suits your needs best.

Regardless of the broker your choose, set aside as much money as you can each month, even if it’s as little as $5. Compounding works quickly, and a little can add up to a lot in no time, so don’t be discouraged if you don’t have much to start with.

What do I invest in?

No matter how much we read or listen, experience is always the best teacher. You will learn over time what works and what doesn’t, creating a strategy that works for you.

Invest in companies that make great products and solve big problems.

If there is one piece of advice I can offer on this topic, it’s this; Invest in companies that make great products and solve big problems.

One of investing most challenging skills is patience. As Warren Buffet once said, the stock market is a vehicle for transferring wealth from the impatient to the patient. So be patient. There will be ups and downs, but if you believe the company you are investing in, it makes it a whole lot easier to keep going.

That’s not to say that’s all it takes, but it’s really not that difficult. The sooner you start the better off you will be, and the more experience you will have.

Buy the dip!

It’s inevitable that stock prices will go down. This is where cash comes in. Try to diversify your portfolio as best you can by having various types of assets.

Buy stocks, but also have cash on the side, properties, and maybe even some cryptocurrency or gold.

When the inevitable dip comes in, you’ll have cash on the side to invest more in the companies you have the most conviction in. Despite the price going down, this should be easy to do because you’ve picked good companies that you believe will be here a decade from now.

Buy the dip. But always keep some cash on the side as the price can always go lower.

Multiple streams of income

We all have a limited amount of hours in the day. We’re all busy and have things we want and have to do, I get it. However, I challenge you to find time in the day for discovering new creative ways for alternate streams of income.

There are endless possibilities. None are likely to make you rich, but a few together can quickly add up. Not only that, this extra source of income can be used to compound your investing, making that grow even faster.

You’ll need to do some research here to find something that fits you depending on your interests and passions. I personally started reselling products on eBay some time ago and will write more in-depth about this in a later post. I’ve also toyed around with dropshipping and a few other ideas I’ve had over the years.

I’ve done all of this while maintaining my day job as it doesn’t take much time once you get the hang of it. There is a learning curve, and there will be a lot to learn, but it will get easier over time, allowing you to spend more time on the things you want to do instead.

Grow your wealth

The topics I wrote about in this article are not an exhaustive list of things you can do to grow your wealth, but they are what I believe are some of the biggest pillars that can have the biggest short-term impact. There are many other things that can expedite your success, but starting with these will get you on the right path.

Financial freedom and success do not (usually) happen overnight. It takes time and patience, so give it just that and you will be rewarded.