Turns out 75% of Americans are winging it when it comes to their financial future. This is a huge problem! However, there isn’t much financial advice out there to help people learn how to become financially literate! Let’s change the statistics with financial advice from experts.
The younger you are, the more time you have to build your savings and investments. The problem is, we don’t receive financial advice until it is WAY TOO LATE.
It’s not your fault you don’t know much about finances, but it becomes your problem when you don’t do anything to learn about how to become financially literate.
Rest assured though! You’re about to learn some life-changing financial advice, you’ll learn about the best financial advice books, and how to manage money.
This post is all about financial advice for young adults, college students, 20 somethings, and all who are searching for unbiased financial education.
Financial Advice Things to Know
65% of people with a written financial plan say they feel financially stable according to a Charles Schwab survey. Having your money goals written down sets you apart from those who are in control of their money and those who are letting their money control them.
It’s the people that plan who know what they are saving for, how much they need to set aside each month, and how long it will take to reach their goals financially.
Click here for a FREE Financial Planner Printable to use to plan and reach your money goals.
According to Charles Schwab’s survey, 54% of planners felt “very confident” they would reach their financial goals, but only 33% of Americans have a written plan. Do you see the problem?
The people who don’t have their financial goals written down just save when they can, they put only a small amount of money into retirement and hope that everything works out for them later in life.
I don’t know about you, but I cannot live my life like that. If I’m being honest, I fell into the category of someone who was winging it. I knew I was supposed to save money- THAT’S IT. That’s literally all I knew about finances.
Things changed for me when I got a full-time job and was wondering why and how I somehow was STILL always broke.
I purchased 2 personal financial advice books and my life changed for ever!
Here’s what I learned from the books and financial tips I picked up from trial and error, and financially literate people:
Financial Advice Tips:
1. Know where your money goes
Once a month you need to set aside time to write down (yes physically write) all of your expenses. You need to know how much is in your checking account, savings account, how much you have set aside for retirement, etc.
Before you can start doing anything, you must know what you are starting with to know where you are going.
Begin with the end in mind, but maybe you’re not starting from $0. If you are, like I was, then it’s still important to write down where your money went.
I’ve put together a free printable that I use at the end of every month and it has really helped me keep track of my goals, see how much I’ve saved, how much I’ve lost, and so on.
I highly suggest you get this FREE tool. Don’t fall into the statistic of not planning for your future. The planner is listed below.
2. Start an emergency fund
This step is EXTREMELY important! See, I feel like everyone knows that they need to save, but not many people have a solidified emergency fund.
Some people’s emergency fund blends in with their savings account and it becomes the same thing. I recently learned that an emergency fund and a savings account are/can be two separate things.
An emergency fund should have a limit. It should be a fund that has at least 3xs your monthly expenses or more if you can afford to do so, but I’m not there yet.
Now you may be thinking, “how can I put a lot of money into an emergency fund if I barely have money for day-to-day living?” TRUST ME, I have been there too!
The good news is you don’t have to start so big. If you can only afford to put $10 into your emergency fund each month then that’s okay!
It’s $10 more than what was there originally. Getting discouraged in the beginning is very easy and typical, but don’t let it stop you from continuing to save because you will eventually see great rewards for sticking with it.
Once you reach a minimum of 3xs your living expenses, you can then start putting your money towards other things like a retirement account, vacation money, or a house.
You won’t need to put much into your emergency fund because it has a limit. That fund is obviously for emergencies only. Once you have it, you’ll be able to sleep well at night knowing you have a safety net AND have money to put towards other goals.
3. Save for retirement
As mentioned in the tip above, once you have filled up your emergency fund, you can use the same amount of money you were putting into your emergency fund into a retirement account.
For example, if I were putting $1000 into my emergency fund each month, once I reach the amount of 3xs my monthly expenses, I’ll stop putting the $1000 into the emergency fund and let it build on its own (compound interest) and put the $1000 into a retirement account each month.
You’re basically trying to fill one cup at a time. Fill your emergency fund cup, then once it’s full, fill your retirement account cup (Roth IRA accounts only allow for a $6000 contribution each year), once that cup is full you can fill another cup.
4. Stick to a budget
If you write down your money goals as suggested above, you’ll know how much money you need to survive each week/month.
Get your FREE finance planner printable here.
After paying yourself first and putting money in your emergency fund, calculate how much you have leftover and budget yourself.
Put simply, budgeting means setting aside a certain amount of money per week or month to use for certain expenses.
My current budget is $100 per week. I’m only allowed to spend $100 per week and that’s for any and everything (gas, food, eating out, whatever).
Now, this budget is very tight for me, but I’m trying to fill my emergency fund cup as quickly as possible, so the majority of my money goes there.
I spend A LOT weekly on filling up my gas tank alone, so I have to be smart about my grocery shopping and such. There are times when I go over my limit, so it’s something I’m still working on.
5. Pay off debt
Having debt is one of the primary sources of stress. So here’s what you can do, pay yourself first (emergency fund), pay off debt, and budget your money from there.
Pay the minimum balance of everything until your emergency fund cup is full.
Once your emergency fund cup is full, you can start paying more than the minimum balance, but it is suggested to wait until you have a nice comfortable safety net or emergency fund first.
Honestly, don’t let this financial advice tip stress you out too much. You obviously have to pay your debt. We can talk more about strategic ways to do this or which things to pay off first if you’d like. Leave a comment below if interested!
6. Learn self-control
The only way you can do ANY OF THIS is with self-control. It’s very easy to be reckless with your money. In fact, you probably were once reckless which is why you may be having financial issues, but financial freedom is worth striving for.
Write down your goals, save your money, and be diligent. When you feel like giving up or splurging, remember why you started!
7. Read personal finance books and personal finance blogs
You being here reading these tips is honestly one of the best things you can do to start your journey of financial freedom.
Here are the best personal finance books you must read!
I will link the top books that changed my financial life forever! These are the most popular books to date. You probably have heard of them already.
This book isn’t what you may think. It is probably one of the most talked-about financial books out right now. It will change the way you think about money and will give you great financial lessons needed to become rich.
I give a much more detailed review of Rich Dad Poor Dad here incase you are interested.
The next personal finance book that changed my life was:
This was actually the very FIRST personal financial advice book I’ve ever read. It taught me SO much about how investing works, how retirement funds work, which retirement funds to look into, and what I should do to wake up wealthy one day.
It takes minimal effort and is worth every penny.
I also give a more detailed review of The Simple Path to Wealth here as well.
I hope you find these financial advice tips to be helpful to you. Starting your financial journey can either be really stressful or really fun. It can be fun to watch your money grow and see your hard work pay off.
Leave a comment below if you have more tips to share or if any of these tips resonated with you.
