While many of us are looking for new ways to get rich, a lot of us aren’t thinking about the tried and true, common sense methods of saving money and achieving personal wealth the old-fashioned way. But, think about it for a minute. All of those old methods worked for people for many, many years. Why wouldn’t you want to use some of that advice now? Here are some common sense personal finance tips that will change your money mindset, and help you achieve personal wealth.
If you have savings in your checking account, you will be tempted to spend it. Keep these accounts separate, and if possible, have them at separate banks.
It is important to check interest rates for many reasons. For instance, you should pay off loans with higher interest rates first. Open accounts with high rates. Learn about compound interest on credit cards and loans.
You might be surprised to learn how much extra you spend when you use plastic to pay for everything. Start living on cash only, and you will notice yourself spending a lot less.
It only takes a minute to check your financial transactions each day, and it will help you to keep better track of your spending.
If you have stuff you don’t need, such as electronic gadgets, you can sell them to eliminate clutter and make cash. Use sites like Letgo, Sell iPhone, Gumtree, and Ebay.
Even though you may anger a friend or family member, never cosign a loan for anyone. Just one missed payment can damage your credit score. Also, if someone requires a cosigner, they are considered a risk.
If you have a lot of debt, it can be overwhelming. Start by paying off the smaller debts. You can do this quickly, and you will feel like you have actually accomplished something.
If you are going to have to pay back student loans, go for Federal loans rather than private loans. The payment terms are more flexible, and the interest rates are much lower.
You want a home, but you don’t want to bite off more than you can chew. Make sure that your mortgage payments are no more than 28% of your monthly income.
When you buy things, look at how much it will cost per use. For instance, that $50 shirt may be worn once a month. A $10 shirt would be worn just as often, and costs a lot less.
Don’t take people with you when you shop, because they could end up tempting you into spending more money than you had planned. When you shop alone, and you get what you need without distractions.
If you are a student, be sure to fill out the FAFSA. This is for the Pell Grant, which you don’t have to pay back. Many students miss out on this because they don’t fill out the form.
When you have overdraft protection, you can be tempted to spend more. Get rid of it, and the temptation won’t be there.
One way to build credit is to get a secured credit card. It gives you credit, but you won’t be able to overspend with it. You also don’t need to have credit to get a secured card.
If you don’t have a schedule for saving money, chances are you are going to slack off. Be sure to include savings in your monthly budget.
Jane Hurst, writer from San Francisco. Find her on Twitter!