Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
What are the financial tips and lessons you learned in life that you want to pass on to others that may not know. What are somethings that you did in the past that you were glad you did or somethings that you wish you did?
I'm 27 and I would advise people younger then me to:
1) Go to college or trade school for something marketable - I have so many friends that graduated with huge amounts of debt and a degree that holds them back.
2) Establish a long credit history - I never knew this but the less credit history you have the more negative information is counted against you and never close a credit card account (It usually lowers your score).
3) For me I found that it was better to build up a savings account of about a $1000 before I started paying extra on my debt.
4) Don't put more then you can afford in your 401K because if you get in
trouble they penalize the heck out of you if you need to withdraw it.
Marry the right person. This is one of the if not the most common attribute of financially successful people (a bad marriage is one of the if not the biggest contributor to financial ruin).
Never carry a credit card balance
Max out your 401(k) if possible
Contribute annually $5000 for you and $5000 for your spouse (whether the spouse works or not) to a Roth IRA, if possible
Contribute $2000/year per kid to Education Savings accounts if you have kids.
Use your tax deferred (401k)) and tax free (roth) accounts to diversify your equity/bond investments. If taxable, go index.
If your kids have earned income for beer/gas money, let them keep the money and you open Roth IRAs with your money in their name. All they need is the earned income.
If you've maxed out your 401(k) and Roth IRAs and education savings accounts, invest in index funds in regular taxable accounts. (This is assuming you are young and stock funds make sense).
Drive big (heavy), safe base model vehicles for a minimum of 10 years or 200,000 miles whichever comes last. It's almost always cheaper to have a vehicle repaired than to buy a new one. Keep the vehicle as long as possible unless it isn't safe (or newer vehicles have significantly more safety features). Base models give you the most for the least.
Buy your teenage kids big, heavy, safe cars that are a couple years old to take advantage of depreciation but not so old that that they don't have the latest safety technology. Lots of air bags.
Consider the Salvation Army or Goodwill for clothes. Pants and jeans are like $5 and if you outgrow them or get sick of them, you're only out $5. $100 gets you enough clothes for a couple years.
Buy your own personal disability insurance even if your employer offers it too. The younger you are, the cheaper it is. Professional organizations often provide discounts. I have mine through the Institute of Electrical and Electronics Engineers (IEEE).
Cancel comp and collision insurance when your car is maybe five to seven years old...it depends but that sounds about right.
Always carry the highest liability insurance available.
Always have the maximum deductible.
Never buy books; use the library.
Never buy DVDs or CDs. Do a google search for the title and "torrent". You can figure out the rest.
Purchase an umbrella insurance policy if you own a home or have significant assets.
If married get $1M worth of term life insurance for the main breadwinner and $500K for the non working spouse - if both employed, $1M each. The younger and healthier your are, the cheaper it is.
If possible, pick a major which will get you a job - even if it isn't your passion. You can always pursue your passion in your spare time - making a buck is more important.
In many cases, it is better financially to go to a more affordable school and have no or low student debt than it is to go to an expensive, "name brand with a good football team" school.
Use your employer tuition reimbursement for graduate level education.
Buy nursing home (long term care) insurance at the right age (after 60 or so, though it depends). A two year partnership is a pretty good idea.
When you get older, analyze the benefits of gradually gifting your assets (except your primary residence) to your kids, especially earlier than five years prior to possibly entering a nursing home. You may escape estate taxes and you will appear "poor" in the eyes of the government when it comes to perfectly legal medicaid (nursing home) planning (even if you have a $2M home) and you'll not be at risk of "look back" gift giving.
Bring your lunch to work.
Consider changing companies three or four times in your career every five years or so. Often you will get a huge bump up (20%) in salary which offsets the benefits of a one company pension. You can add the other four pensions together as long as you are vested.
Never order beverages in restaurants. Drink water.
If you want an alcoholic drink in a restaurant, consider doing something in the parking lot instead before entering.
Airline alcoholic drinks are very expensive. It is perfectly legal to bring those little shooter bottles of booze (1.25 oz of vodka for example) through security. You can fit four of five of those little bottles in a one quart zip lock bag. Orange juice is free on the plane....
Bring your own meals on airlines.
Use employer flexible savings accounts to use pre tax dollars for medical expenses.
Work out at lunch time - exercise most days of the week.
Airline alcoholic drinks are very expensive. It is perfectly legal to bring those little shooter bottles of booze (1.25 oz of vodka for example) through security. You can fit four of five of those little bottles in a one quart zip lock bag. Orange juice is free on the plane....
It's actually against federal regs to BYOB on a commercial plane, you have to be served.
Charles sounds like he lives the most boring life ever. Seriously, enjoy your life a bit now and save for the future without living in a cardboard box and candle light. Jeez.
I'm 25 and heres my advice
- Get a bank credit card. Its really the only way now due to the changes made a few months ago. Ask your bank to get a student credit card. It'll probably have a 300 limit and you will have pay 300 to get it so it functions like a debit card but it will actually be a credit card. Once you can show you don't abuse it, they will increase the limit and it will become a legit credit card.
- Go to college or the military by age 20. I have a few friends joining the miltiary at age 23...what have the done since high school? Lots of nothing, don't waste 5 years living life like you did during summer vacation in high school. If you go to college, go to a JC first. Figure out what you want to get your degree in then transfer. Make sure you get something you will actually want to do and it is useful. Don't get a BS in English and you don't want to be a teacher nor want to get a Masters...kinda useless.
- Live at home for as long as possible. Rent and utilites cost alot more than you think. You will not throw as many parties as you were daydreaming about in high school. You will hate how your carpet looks and all the broken crap you will notice the next day.
- Once you move out, use the internet for as long as you can to entertain yourself. Hulu is an awesome website for free and legal TV show watching. Get Netflix, 10 bucks a month for 1 DVD in the mail and unlimited instant streaming on your computer. You can easily find 6 months worth of TV series on there.
- Don't buy an expensive cool car. Alot of people living at home do this and its dumb. So you save money living at home to buy a 40k car? Yea, that makes sense...
Thats about it. I wouldn't even bother getting into retirement accounts until you have a secure career going. Those 100 bucks now will mean alot more to you now compared to the interest on it earned when you are 65.
Isn't that kind of general? Where do you draw the line?
All you really need is water, bread, shelter, clothes, and maybe a couple other things.
Do you need internet access? no
Do you need a radio? no
Do you need soda pop? no
Do you need more than a fifth grade education? no
Should we advise people to not buy what they don't want?
Don't take the comment too literal. Bottom line, try to control the extravagant, even though we all need to treat ourselves occasionally.
Stay as out of debt as possible. Its called self control and personal responsibility.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
