The Free Money (Advice) Thread!


#1

Okay, so there’s no actual free money being given away, but what you can find here is knowledge about keeping in the black by having enough green (or whatever the color of your local currency might be). And that’s the next best thing, right? Right?

So, like other help threads, any questions you have about the monies should be posited, and people can offer whatever advice they have learned from a lifetime of good (or bad) decisions.

Thanks to @Eric_Moser and @Jose_Garcia1 for inspiring this idea!


#2
  1. One advice that I ignored when I started working was the formula “Income-Savings=Expenses”. It was the time I was able to buy items I want like handheld consoles, books and such. I was fortunate that I didn’t maximize my credit since it was still instill in me by my parents that owning money should be near nil or limited to major necessary purchase. Now, I am happy that I have build my emergency fund and invest on some low risk investment.

  2. Always pay your credit card due in full since those interest will eat you right up so it’s best you always have your credit budget in mind or pay in cash.


#3

#4

Tip to help save money - Choose a common note value you will have in your purse or wallet and make a commitment to save every bill of that note you get for a period of one year.

An example: A common note in America is the $5 bill. So you would save every 5 dollar bill you acquire for that year.

This was something suggested to me by @Shawn_Patrick_Reed and it is a habit I wish I had from the beginning.

It really does help you save because you are not consciously trying to save everything (so you are avoiding pressuring yourself) and you can get excited as your year long journey starts paying off.

You can give yourself a goal to work for at the end - such as a summer road-trip or keep your options open.


#5

For the UK people out here, check out https://www.reddit.com/r/UKPersonalFinance/

The basics are this nifty flowchart

https://marcusmichaels.github.io/personal-finance-flowchart/

There’s also helpful organisations:
https://www.stepchange.org/ (Debt Charity)
Citizens Advice,.
etc.

Imo the main aim is to get in a position to save a x amount of money a month, then use saved money to save more money-- from an emergency fund saving you money and time to savings that can be used to capitalise on good deals (e.g. limited time deals, bulk buy deals)

Oh and once you have the basics sorted out invest as much as you can in Emerging Tech in China /s


#6
  1. Avoid Debt. Borrow as little for school as is absolutely necessary, and focus on your degree’s return on investment potential. Never carry a credit card balance. If you won’t be able to pay something off in 30 days, don’t buy it.

  2. Become the commanding officer of your little green army. Pour money into savings every chance you get, the earlier the better. Your goal is to build up your little green army to the point where they are out-earning your own salary. You’ve basically cloned yourself at that point. That is the goal.

  3. Pay as little in transportation costs as possible.

  4. Question every expense, at least for a year straight. When you get into the habit of asking yourself, “will this purchase really increase my happiness?” every single time you’re faced with a potential purchase, you avoid impulse buys and learn to delay gratification.


#7

I would like to add a goal to future financial independence and separate savings for future little rewards for yourself (saving for a vacation, saving for a new phone, your dream wedding or own house) with saving for your retirement. You are never too young to save for your future retirement because it will save you from financial dependency.


#8
  1. Try to save as many as possible. Create the saving with the goal of “always prepare for the worst”, not to save money to buy things.
  2. Suppress your urges to buy snacks or things with little urgency.
  3. Always carry cash with small denomination instead of the big ones. This could alter your mindset that you only have little money left.

#9

This is great stuff, guys! The $5 dollar bill trick is fascinating, and feasible for the vast majority of people.

Since a lot of y’all are getting close to college age, I highly recommend going to a public college in-state unless you’re in the rare field where getting a degree from a prestigious university matters (and there’s less of those fields than you might think). Many states have lucrative scholarships and reduced tuition when you go where you live, and being near family can be helpful in a lot of ways. Also, be sure to research what other scholarships you may qualify for, as there’s a ton of them out there.

The ‘no debt’ comment is one of the most important. But I will say that if you have the funds and discipline to maintain it, it’s beneficial to do your spending on your credit card and pay it off in full every month as opposed to just operating out of the checking account with a debit card and paper checks. This keeps your credit score high in case you need a loan for any reason, and also earns you reward points (and if you aren’t getting free reward points on your card, drop it and get a new one stat).

Never use savings accounts. Money market accounts have almost the same level of Reg D accessibility and always yield more interest, as long as you make sure to keep it above the minimum balance.

Vending machines are your enemy. As is any other expenditure where you’re way overpaying for something out of sheer convenience. Just plan ahead of time for things like this and it adds up to huge savings in the long run.


#10

I will still recommend using savings accounts with a debit card for emergencies. Though I know some countries have a great health care system but if you live in my country, some of our hospitals has reputation for not taking care of your needs unless you paid a deposit. =(

I recommend this as well. It just take practice and great self control. My mum use this strategy when paying for groceries, tuition, utility bills but she makes sure to note all the expenses.


#11

A money market is a savings account, though. It just has higher interest yield in return for slightly more restrictions on withdrawals per month. But those can always be circumvented by transferring more money fewer times, rather than smaller and more frequent transfers.

My main point is that a lot of people keep all their money in checking or regular savings, which is a total waste since they pay out a lot less in interest than a money market. Of course, CDs are better still, but that requires you to give up access to the money for some time. So that’s not for everyone, and definitely should not be used for all your money.


#12

I suppose it depends on where you live. In my country, I have to personally go to the bank to withdraw money from the money market and it takes a banking day to do so, which is not feasible when I have to make a down-payment to a hospital in the middle of the night on a weekend. But I do agree that certain amounts should be put into the money market and left some money for emergencies.


#13

I usually just follow the 50/30/20 budget rule when it comes to saving money.

50% of your initial income should be in this section of your monthly budget. The needs which will include housing, utilities, food, health insurance, etc.

30% of your initial income should be for splurging or getting what you want but not a necessary need. Like shopping for new gadgets, eating out, movies, hobbies, etc.

The remaining 20% of your initial income will be your savings, emergency fund, or future funds.

This might be idealistic, but it worked for me. And from the 30% wants budget I’ve taken it down to 15% and the initial 20% savings budget I raised it to 35%. Of course, that is because I need to save money for my kid’s schooling once they start and college funds are something I’d like to prepare my heart for :weary:


#14

I don’t think that basic formula is idealistic. It is doable but you really have to sacrifice a lot since you have kids. I salute you on that. =)


#15

I am thinking more like 40-10-50… … someone always told me Cash is King…:-):sweat_smile:


#16

Wow, I apologize. Never realized it was so different outside the States. Here MMAs just have a lower limit on in-person transaction (which are unlimited on savings) but still allow up to 4-6 online transfers per month depending on your financial institution. Which is like three more than you need.

Oh, another huge thing for US folks: 401k matches. If you have one offered by your employer, make sure you get the max. No ifs, ands, or buts. It’s a huge help in retirement savings, and the closest thing to free money you’ll get in this thread. If your job does not have it (or some sort of pension) and you’re older than mid-20s, you need a new job whenever you can. Because that’s a pretty basic right at this point.