Money tips for any age
Money tips for any age
Here are four money tips that you will either have success with, or you will regret not following. The choice is yours!
Never finance depreciating assets
If you’re borrowing money and the asset depreciates in value you’re paying much more than you think. Debt is not a bad thing if used correctly. If you use it to purchase properties that increase in value it can be worth it. You can borrow at 3% on a mortgage and you gain 4% each year on average on that house value, your net worth will still be increasing. If you buy stocks on a margin and they gain more than the cost to service your debt, you’re still ahead.
It’s when you buy everyday products on a credit card and don’t pay it off before you incur interest when you fall behind. With a depreciating asset you’re losing money over time on owning the asset and you’re also paying interest to own it. Look at owning a new car for an example. Buying a new car at 0.9% interest is a pretty good deal as far as finance rates go, but you’ll still pay more to lose money. Buying one at 0% is even better, the car will depreciate but you won’t be on the hook for any interest.
Don’t be afraid to negotiate
ESPECIALLY if you’re interviewing for a job where negotiating will be part of your job. That’s a first impression people might think would go the wrong way, but if that’s your job you’re going to want to demonstrate that from the start. I work in a position where I do a bit of hiring and we’ll offer what we think is fair and reasonable for the candidates’ position. Is that the max we’re willing to pay? No, it never is. I suspect just about every other company is the same way. Just take a minute to think about these questions next time you’re offered a job you applied for:
- Was this the ONLY position available?
- Do I think I’m qualified for this work?
- Will I add value to this company?
- Do I have previous experience in the industry?
If you’ve answered yes to any of the above questions, you probably have a little bit of leverage.
Negotiating isn’t just for job offers either. You can do it almost anywhere, buying goods and services , discussing payment plans, and lots of others. As long you work with the other side to achieve goals for both parties negotiations go a lot better than you would think!
Have an emergency fund
Whether it’s $100 dollars or $10,000 dollars, set something aside and don’t touch it. This will help you in emergencies from maxing out credit cards or taking on unnecessary loans. Disasters happen, the town I grew up in flooded this year and the town I work in lost 15% of the buildings due to wildfires earlier this year and the city I live in flooded in 2013. That’s just one person, luckily I managed to avoid financial repercussions in all of them but I was EXTREMELY lucky. Many family and friends were not. Sure they have insurance but they’ll be out of pocket for months of expenses before the insurance company pays them back.
Invest in yourself first
You won’t always work, so make sure future you has some money to fall back on. You have NO idea what your expenses will be then or what things will cost or where you might be. Plan for the worst and hope for the best. Set a target % to save and work towards achieving it each year, then increase as you get your financial mindset on track.
Also, keep educating yourself. It doesn’t have to be paid secondary education, books, online, local courses are available to almost anyone. A continuous thirst for knowledge and self improvement will only serve you well in the future. You’re developing good study habits and exercising your mind. You’re increasing your knowledge base which will help you adapt in a changing world and workplace.
There we have it, 4 of the best money tips for any age
It’s never too late to start doing any of these and there’s never a bad time to start. I’ve always regretted not starting each of them sooner. For me the negotiation tip is the one I wish I started MUCH sooner. I’ve only once negotiated a salary and it worked out with an 8% bump in pay, just for asking!
Do you guys have any money tips you’d like to add?
If you’re looking for other money tips check out these 5 tips for beginner investors.