Here’s the Best Financial Advice You Need to Know

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Everyone has opinionated advice. Some are right for you and some are not. With finances, it’s important to take in as much information as possible to make better decisions as you grow. Here is some of the best financial advice from some of the top personal finance bloggers.

Financial literacy needs to be more readily available to all. Unfortunately, it’s not and far too few people actually practice sound financial literacy habits as evidenced by these shocking financial statistics.

The good news is that there are plenty of personal finance bloggers out there doing excellent work, so I thought I would ask them for financial advice that is near and dear to their “financial mottos.”

Let’s use this as a lesson and a way to improve our personal financial planning.

Use a free tool like Personal Capital to manage your cash flow and net worth. It’s the only tool I use to ensure I’m investing cash flow from side hustles efficiently.

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How to Get Financial Advice

Financial Advice

I love the explosion of information on various social media and web platforms such as blogs. It’s become so helpful, easy for people to get financial advice quickly, efficiently and for free.

Unfortunately, not all financial advice is created equal. In fact, there are plenty of tips and advice out there that is just flat out wrong. It can be more detrimental to your financial well-being than helpful.

What better place to ask financial bloggers themselves to get the latest tips and advice for building a successful financial future?

Beyond financial bloggers, you can get financial advice from a variety of people, including:

  1. Family members: Get real-world examples and experiences to learn from without any bias (depends on your family of course!)
  2. Financial advisors: Advisors are experts in this field. They get paid to do it. That being said, they might not have all of your best interests at heart.
  3. Friends: Like family members, they can give you advice from a real-world perspective. They might be more (or less) honest than your family members.
  4. Teachers/Coaches/Mentors: Some people practice financial planning to help others. This is a great way because their compensation structure is significantly different than financial advisors. This can be great to learn without the frills of a financial advisor.

Let’s get into some of the best financial advice from top bloggers around the web.

Best Financial Advice to Integrate into Your Life

Want to better your financial future? Well, I took a poll from several of the top finance bloggers on the internet. Here is what they said.

Bet on yourself. Take risks. 

Bet on yourself. Take risks.  Click To Tweet

This is my submission. As the owner of Financial Wolves, my philosophy is that people perennially undermind themselves. This undermining comes in a variety of ways, including pay, worth and ability.

You are worth a lot more than you think. Your time is valuable. Day by day you have the same amount of time as Jeff Bezos. You might not have the same resources, staff or help. At one point Jeff Bezos has the exact resources that you have.

Take a chance on yourself and let your entrepreneurial spirit run wild.  You will fail 100% of the time that you don’t try.

Whether you want to start a blog or build your own service business, take a chance on yourself to build something. Make your dreams a reality.

See Related: 15 Best Online Business Ideas

Trying to “time the market” is a loser’s game.

Trying to time the market is a loser’s game. Click To Tweet

We’re at a point in the market cycle when everyone, it seems, is predicting an oncoming recession. Doesn’t it make sense, then, to shield ourselves from it? Let’s sell now, with the market at a high point…right?

The problem with this logic is twofold. First, if the market were obviously going to drop in the future, then why wouldn’t it just drop today? Why wouldn’t people start selling right now?

And second, the issue with predictively selling is that it also requires you to correctly buy back in. You don’t want to miss future gains, after all. So, timing the market is a two-part game. First, you must know when to sell. And then you must know when to buy back in.

There are thousands of professionals trying to do this every day, and research has shown that they’re no better than a coin flip. So what makes you think you can do better? Learn from others’ mistakes: don’t try to time the market!

Instead, consider a slow and steady plan of constant contributions month after month. You might already be doing this via a 401(k) plan.

This method—called dollar cost averaging—has been proven effective in historical markets.

It’s low-risk, gets you an average reward (especially if you’re buying index funds), and doesn’t come with the stress and effort of trying to perfectly time the erratic financial markets.

See Related: How to Invest Small Amounts of Money

Track your spending in a meaningful way.

Track your spending in a meaningful way. Click To Tweet

Like many people, I used to track my spending at the end of month & match it up with my budget. Basically, I was checking to see whether or not I’d blown the budget.

 

That wasn’t a recipe for success, to put it mildly. When I finally switched things up and began tracking my spending as I did it instead of after the fact, things changed dramatically — especially because I focused on values-based spending. That’s where you mentally evaluate whether or not what you’re about to buy is worth it to you.

 

Track your spending in this way, and your life will change. (Because paying attention in the moment makes a huge difference.) You’ll gradually reduce or eliminate spending on the things that aren’t important to you, which leaves more money for the things that are.

 

It allows you to get what you want most vs. what you want right now.

 

Contribution by: Jackie Beck

 

Financial Wolves Pro Tip: This is where Personal Capital can be extremely helpful and valuable. Additionally, if you feel like you have way too many subscriptions or you pay too much for cable try an app like Trim. The app will automatically remove excess expenses from your budget.

 

Budget your money together.

Key Financial Advice #4: Budget your money together. Read other financial advice you need to follow here. Click To Tweet

My wife Brittany and I have been budgeting together since college. We started with a simple pen and paper method, keeping it as simple as possible. It was critical in our relationship to talk about finances from the start and work on financial goals together.

 

It helped us take out less student loan debt and jump-started us in investing our money for the future.

 

By being purposeful in having our weekly money and marriage meetings we were able to pay off over $25,000 of student loan debt in, under 5 months, both quit our jobs and grow our online business to multiple six figures a year.

 

Sitting down with your spouse to dream together, plan our your finances, and work on your relationship will completely change your life and unlock the freedom to do more of the things you love. Use these budget templates to plan your future together.

 

Contribution by: Brittany and Kelan Kline the co-owners behind the personal finance blog The Savvy Couple.

 

Create an envelope budgeting system for your business/blog.

Key Financial Advice #5: Create an envelope budgeting system for your finances/business/blog. Read other financial advice below. Click To Tweet

When I first started, I was a compulsive spender and I would simply buy whatever I wanted because I could.

 

That resulted in me having access to a lot of courses that I haven’t even opened and software programs that I didn’t really need and spent over $500 on. At the recommendation of my amazing Virtual CFO, I checked out the book Profit First by Mike Michalowicz and I learned his strategies for curbing expenses by dividing your bank accounts into smaller plates.

 

Now, I always have money set aside to pay taxes, fund my operations, invest in education, and pay myself. This past year — and I only began implementing it in the summer — I’ve fully paid off my car (over $5,000) and made payments on my student loans (over $6,000) on a gross income of $40,000.

 

This system has revolutionized my business finances and I can’t wait for how much debt I pay off this year because my business is lean and my spending is under control.

 

Contribution by: Drew DuBoff, Growth Strategist & Outsourcing Expert

 

Getting on the same page as your spouse when it comes to money is a critically important component of building a lasting relationship.

Get on the same page as your spouse when it comes to money Click To Tweet

Where money problems are the second leading cause of divorce, doing everything in your power to start the conversation early will pay dividends down the road. I married someone, for better or worse, that carried a fair bit of debt, and more concerningly, the “everything will work itself out” attitude towards money.

 

To combat the laissez faire attitude towards money I started by doing the one thing all couples must do: have an intentional talk about money. Talk objectively with your partner about how important setting and achieving money goals is to you and try to find common interests.

 

Make it as easy as possible for your spouse to follow along by calculating a budget you can reasonably expect to stick to, and automating your finances wherever possible.

 

With near-full budget automation, i.e. things like direct-deposit for paychecks, auto bill-pay, automated savings contributions and more, you take the emotional component out of spending, thus making things as objective and as fair as possible. (It also lowers the threshold for overspending mistakes).

 

When your family essentials are automatically taken care of, any extra money accidentally spent amounts to a smaller “mistake” that the two of you can work through and learn from.

 

Contribution from Jeff Proctor at DollarSprout.

 

Pay yourself first.

Pay yourself first. Click To Tweet

Paying myself first or saving money when I get paid has paid off greatly for me. I learned this lesson early on and have stuck with it.

When I started my first job out of college, I decided to save $20 a paycheck into my 401k. The amount was so little, I questioned whether or not it was even worth it.

But at the end of the first year, I had saved $520 and thanks to compounding, it grew close to $1,000! I was amazed that my $20 a paycheck turned into close to $1,000.

By the end of the second year, I was closing in on $2,000 saved.

I ended up increasing the amount I saved in my 401k whenever I earned a raise and use this principle for all my savings. When I get paid, first I save, then I use what is left over to pay my bills.

Over the years, this has allowed my wife and I to learn to live on less, which enables us to save close to 50% of our income. The longer-term result is being able to quit working early if we choose.

Don’t make the fatal mistake of saving after you pay your bills. You usually don’t have anything left to save. Save first and reap the rewards.

It’s one of the simplest ways to become rich and is a straightforward approach for financial advice.

Take steps to pay off your mortgage early.

Take steps to pay off your mortgage early. Click To Tweet

After years of deciding between paying off our mortgage or investing elsewhere, in 2016 we went all-in to pay off our home. We paid off the remaining $60,000 to become completely debt-free in August 2018 after more than two years of making quadruple payments.

 

Being debt free including the mortgage has reduced stress, decreased monthly expenses, and provided the peace of mind that comes with a paid for home.

 

Being debt free has also provided the financial means where my partner could step away from a job to stay at home with our young children.

 

I always say that I’ve never met anyone who regrets having a paid for home, and I can confirm that we don’t have any regrets either.

 

Get into the habit of constantly living below your means.

Get into the habit of constantly living below your means. Click To Tweet

Originally my frugal ways came out of necessity more than anything else. When I was a student, I had the choice between spending on luxuries that I didn’t really need or having a social life. I cut my supermarket shop down to the bare minimum so I could afford to enjoy my years at University as much as I could.

The same applied when I bought my first house. I had no spare cash so had to make savings everywhere I could. I didn’t buy branded groceries or designer clothes, as I felt I was just paying for the label and the manufacturer’s marketing budget.

It made far more sense for me to spend money paying off my mortgage to get a leg up on the property ladder.

Once I’d done this for a long time it became ingrained as a habit. Then eventually as my income rose and I finally had money spare at the end of the month, I was able to start investing to build my wealth.

The trick is not to give in to lifestyle inflation and start buying luxuries you don’t really need or want just for the sake of it.

Instead, focus on building your future life and don’t give in to the temptation to “Keep up with the Joneses”. Here are some awesome tips to reduce your grocery bill.

Live below your means while increasing your means every chance you get.

Live below your means while increasing your means every chance you get. Click To Tweet

Often, folks in the personal finance and FIRE world want to cut, cut and cut. While I personally believe in living below my means, I also work hard at earning more every year so that our disposable income increases.

This has impacted our family finances positively because we don’t have to fight over every cent that gets spent. We can live comfortably and still save and invest for the future.

A poverty mentality won’t change the world. With a lot more in disposable income, you can help others around you and not feel deprived.

Contribution by: Enoch of Savvy New Canadians

See Related: 5 Steps to Effective Personal Budget Monitoring

Consider all asset types in your financial planning.

Consider all asset types in your financial planning.  Click To Tweet

I use life insurance as an asset class. Many people think of life insurance for the death benefit only and don’t realize that it can be used as an asset.

There are certain types of life insurance (Whole Life and Indexed Universal Life) that can be designed to accumulate cash along with the death benefit. The money in your life insurance policy can be accessed tax-free through loans. This money does not have any stock market risk and can be used before age 59.5 without penalties and fees.

This provides more flexibility than a 401(k), IRA or other qualified plan.

I am using my life insurance policy to create a tax-free retirement income. Another advantage of having a life insurance asset is that you can use the money to make a large purchase.

Just last year, I used some money from my life insurance policy to buy a car. In 5 years, I’ll have all of my money back in my life insurance policy and also a paid-off car. This is much better than borrowing from a bank and losing all of the money and interest to the bank.

We teach clients how to best use indexed universal life insurance to grow their wealth. It’s important to diversify your risk and tax exposure within your assets.

Start planning and saving for your retirement on day one of your very first paying job (or today if that time has already passed)!

Start planning and saving for your retirement on day one of your very first paying job. Click To Tweet

As we start that “first great job”, some papers are shoved in front of our faces and one of them is all about benefits and retirement plans. Retirement planning…really you say? I mean, holy crap, I just started working and now I have to think and decide about retirement that may be 40 or 50 years down the road?

The longer you have to grow your money, the better off you will be. Sure, your first paychecks have “spend written all over them. But, if you think you will make it just on your Social Security checks (if there are any when you actually retire) or an inheritance from mom and dad, you may be in for a rude awakening. So get in the habit of saving right away.

By waiting to save, you lose the time and years that compounding your money and growth that can really add up over the many years that your money is invested.

The monies you invest in your private IRA or a company 401(k) plan offer you the way of investing for your future, especially if your company plans are supplemented with matching funds (free money!), company stock options, and the like. I did that dutifully and if I hadn’t, my retirement and subsequent health costs would have spelled financial disaster.

The choices you make that may eventually lead to—over the course of forty or so years—the accumulation of enough money to retire comfortably at the age of 65 or so begins when you begin working, not when you are 40, 50, or even older.

Stop procrastinating and start taking action!

Stop procrastinating and start taking action! Click To Tweet

When it comes to finances, it is important to start as early as possible by learning about personal finance and by putting what you’ve learned into practice. Many people know that their financial situation can be improved but don’t know how they can take action. Overcome that hurdle and take one small step at a time!

If you are overwhelmed and don’t know where to start, I would recommend reading Rich Dad Poor Dad. It is one of the first personal finance books that I have read, and it radically changed my perspective.

The book teaches you the mindset aspects of finances and how you can improve your finances one step at a time.

It is a great book to start your financial journey, stop procrastinating, and start taking action towards your goals!

See Related: 13 Best Mint Alternatives to Try

Hustle at your job.

Hustle at your job. Click To Tweet

Your lifetime earnings are decided in the first decade of your career. Make these years count. It is easier to save money and build wealth when you make more money in the first place. Create a plan to double or triple your salary, no matter how crazy that amount may seem at the time. Dream big and create a plan with steps you can act upon to get to that dream.

I was lucky that I had both mentors and sponsors at work that always pushed me to challenge myself and think big. For example, they pushed me to go to a top 10 MBA program instead of a good local MBA program nearby and actually wrote me recommendations which helped me get accepted.

It was really tough going to a top 10 MBA program part-time while also working hard at my job. However, I was able to make a significant amount more than I would have if I just went to a top 30 MBA program.

And, because I continued to hustle at my job while getting my MBA I avoided student loans and got promoted twice while going to school. By investing in yourself and your career it is much easier to set yourself up for financial success.

Here are some other smart money moves to make in your 20s.

Learn about, and use, your tax-advantaged investing options to accelerate financial progress.

Learn about, and use, your tax-advantaged investing options to accelerate financial progress.  Click To Tweet

Too many people don’t realize how many tools there are that give tax savings – allowing you to invest more for less or reduce your future tax liability. I went for years not understanding this and gave up years of potential gains.

For example, most educators have access to multiple tax-advantaged options and don’t even realize it. Learning about our 403b and 457b options dramatically increased our financial progress.

Since both my wife and I are educators, we can contribute double the amount.  Combined with catch-up provisions, Roth IRA, and one HSA we are now able to invest almost $100,000 a year in tax-advantaged accounts.

That’s a game-changer when building wealth!  It’s helped us turn our financial lives around quickly.

You may have different options, but understanding what you have available empowers you to make the best decisions for your financial well-being. By investing, while limiting tax impacts, your growth and your wealth will help you keep more of your money.

See Related: 13 Effective Tips to Practice Financial Discipline

Time in the market beats timing the market.

Time in the market beats timing the market. Click To Tweet

To me this is the lifeblood of any successful investor as time after time, studies and experiences have shown that simply buying and holding is better than trying your hand at timing the market. The reality is that 80% of professional financial managers with untold resources fail to beat the market and that means it’s pretty darn hard to do.

Sure, you can potentially do better one year or another but doing it year after year after year is the key to taking advantage of the compounding effect of growth.

That means lagging the market once or twice can really set you back and that’s why most professionals can’t do it as consistency is so hard!

I get it. It’s very easy to say I’m better than average in a lot of things and think you’ll do better. The problem with that is that timing the market means you not only have to buy at the right time but also sell at the right time. It might work out fine once or twice, but it gets harder the more decisions you must make.

How likely are you to make the right decision dozens of times? If you want to be average, you just make that decision once, buy now and hold whether it goes up or down.

Sure, many don’t want to be average.

However, investing is one of those things where being average is perfectly fine. The word average is rather misleading when it comes to investing as you’re better than 80% of the people who try it on a professional level and probably a higher percentage of those that do it as a hobby.

For me, I’ve been perfectly happy to be average and invest most of my money in simple index funds. Look at 2019, if the average return can be 30% then I’ll be perfectly happy to be average for as long as I invest.

That clearly won’t be the case every year but the average return historically has still been quite good.

If you’re in it for the long term then buy today and hold without worrying where the market goes. The odds of you making the right sell and buy decisions are rather low.

See Related: 8 Best Income and Expense Trackers

Conclusion on Financial Advice

So there you have it. A compilation of some outstanding financial advice and tips from some of the top money minds out there.

It’s now about taking action. Financial advice can only go so far if you only continue to read about it. You should now focus on taking action.

Follow our blog to get the latest and greatest updates in real-time.

What will be your key financial advice or tip? Make it an effort to improve your habits by 20% this year. It will go a long way.

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