The 61 Money Management Tips that Will Change Your Life Forever

My Story

Left with $70,000 in student loans after graduating with a double major in chemical-biological engineering and biology, I felt stuck. I realized that I needed to take control of my personal finances and get out from under those loans. 

Long story short, Momentum Financial Planning LLC was created because I chose to take control of my financial life, and I am now a Certified Financial Planner™ professional and Accredited Financial Counselor®.

The mission of Momentum is to provide comprehensive and holistic financial education to early career professionals so that you can make confident decisions about your money and know how to manage your finances day-to-day. Momentum offers personalized 1 on 1 financial planning to early career clients with an emphasis on developing habits and learning along the journey. Momentum also offers a “You Are Your CFO: Personal Finance 101” program that covers subjects like creating a cash flow strategy, understanding pay stubs, investing, estate planning, insurance coverage, how to set up credit card payments, and more. 

What is Money Management?

Money Management is the art of organizing, planning, and adjusting your finances so you can achieve your financial goals (also known as personal financial planning). Learning to manage your money is an essential skill that is unfortunately not generally taught in schools. And even though your parents may have taught you how to manage your money, how do you adapt those principles to today’s environment? To your own paycheck?

I’m going to help you get your financial life together with these 61 money management tips. This is designed to be as comprehensive as I can possibly be in one article. You can do it!

Check out my Step-by-Step Cheatsheet to Financial Freedom!

Why you Need to Learn Money Management

Organizing your finances can be time-consuming and overwhelming, especially if you have no idea where to start. Learning these money management tips, especially early in your career, is essential to peace of mind over the long-term and can be the difference between a life of debt and scarcity versus a life of wealth and abundance. And if you’re anything like me, I know you would rather take action to learn something right the first time than spend a lifetime struggling. 

How These Money Management Tips are Structured

There is a lot to learn when it comes to understanding your personal finances and how you manage your money. But before we dive in, I want to make sure that you have a clear understanding of what we'll cover regarding personal finances and how it can lead to your financial success. To make it easier, I’ve divided this “money management tips” article into 12 sections, or “Pillars”:

1. The Fundamentals 

2. Organizing Your Financial Life

3. Sarah’s Cardinal Rules of Personal Finance

4. Money In & Money Out: Tracking Income and Spending

5. Saving

6. Retirement Planning

7. Optimize Your Spending

8. Managing Debt

9. Investing

10. Establishing and Managing Credit Responsibly

11. Estate and Everything Else

12. Extras: The Icing on the Personal Finance Cake

I have written these in a systematic order that is designed to bring you the greatest success. But feel free to jump to the sections that are most important to you. I know you will find several money management tips that will change your life!

Pro Tip: Think of this article as a money management or personal finance bible of sorts. Bookmark this page or “Pin it” to your financial goals Pinterest board so you can access it again in the future!

Pillar #1: The Fundamentals

#1: Don’t Be Afraid to Think About Money

Checking your bank account can feel like opening up a Pandora's Box of anxiety. Will you have enough money to cover your expenses this month? Do you have the extra money to have financial security?

But take heart - avoiding that bank balance will only keep you from making educated decisions about your spending. The unknown is almost always worse than the known itself!

Do you know how much money is in your checking account? It's so important to know what your financial position is and exactly how much money you have at this very moment. So...go ahead! Stop reading for a second and take a peek at your bank account.

You did it! That’s the first step. Way to go! Was it what you expected? Now let’s learn how you can take that knowledge and improve your overall financial health.

#2: Find Your Starting Point

Building your personal financial plan can be surprisingly easy - and even kind of fun. Here's how to get started:

1. Take a deep breath and relax. You can do this! Keep in mind that this is just your starting point.

2. Figure out what your current financial snapshot is. This means making a list of all your accounts and their balances. 

1. How much money do you have, and where is it? 

2. What are your debt obligations, to whom, and at what interest rates?

3. Next review your cash flow, or the “over time”, picture of your finances.

1. What's your monthly income, and from what sources? When does it get deposited into your bank account? 

2. What are your monthly expenses, including your bills and due dates? (Make sure you’re really being honest with yourself here - it’s really ok, I promise!) 

We’ll go more into depth for each of these in some of the following tips!

#3: Avoid the Cardinal Sins of Money Management

Sometimes you can get ahead by not making common mistakes. Some common mistakes might include: 

• Missed credit card payments

• Paying rent late

• Getting a loan with a high interest rate or variable interest rate

• Renting a place you can’t afford

• Spending more money than you have coming in

But the good news is that it's never too late to start learning, and the sooner you start, the better off you'll be.

Money management is all about making the most of your income and protecting your financial future. You need to set priorities, stay organized, and be disciplined with your spending. You need to know when to save and when to splurge. There are a lot of different personal finance strategies out there, but the best one is the one that works for you.

Pillar #2: Organizing Your Financial Life

#4: Get Organized for Your Financial Success

Now that you know where your savings, checking, and credit accounts are, and understand how important it is to have a plan, it’s time to manage them. A great way to do this is to create a spreadsheet that tracks your current monthly expenses, monthly income, and all of your accounts (including: checking accounts, savings accounts, loan accounts, investment accounts, and credit card accounts). This will help you keep track of your interest rates, debt obligations, and other money management information.

Don’t want to create your own spreadsheet? I’ve got you covered with my free personal finance tracker to get you started!

Download my FREE Personal Finance Tracker here!

#5: Simplify Your Accounts

Organizing your finances is awesome, but what good is all of this organizing if you have 15 different accounts and can't remember half of them? When it comes to managing your money, simplifying your accounts can be a helpful way to stay on top of your finances. Having multiple checking and savings accounts or 401(k) accounts can be more difficult to keep track of.

Try to consolidate your bank accounts and credit lines as much as it makes sense for you, and make sure that each one has a clear and defined purpose. Keep in mind that your checking account should be a central train station for your money, so you typically don’t need more than one!

#6: Keep Everything in One Place

While this step sounds simple, it can be a lifesaver. Have one place where all of your financial accounts are linked, so you can see up-to-date information in one place. (My clients use my RightCapital planning software - it updates real-time balance information and aggregates the net worth impact of all their different accounts.)

Having a center of operations for your finances will make it easier for you to manage your money and reach your financial goals.

Pillar #3: Sarah’s Cardinal Rules of Personal Finance

#7: Spend Less Than You Earn

This may sound like a basic finance principle, but it is one of the top 3 money management tips that will set you up for long term financial success. You would be surprised with how many people do the opposite! 

It is essential that you create good spending habits and keep track of your budget. A great way to ensure you're earning more than you're spending is to just keep track at some level that makes sense for you. Know EXACTLY what you're spending. Again, not just the big expenses, but all of the little ones that you write off as "small". It’s just too easy for all of those "small" expenses to add up at the end of the month. Once these numbers are combined, my clients can sometimes realize that they've overextended their budget and spent all of their extra income. 

Take the time to discover your true monthly spend and make your funds last longer!

#8: Pay Yourself First

When it comes to saving money, one of the most important things you can do is pay yourself first. This means setting aside a fixed amount of money each pay period to put into savings on the day you get paid before you pay any other bills or expenses. The idea is that by paying yourself first, you will make saving a priority and be less tempted to spend your money on other things with nothing to save at the end of your pay period. Spend what’s left after saving, instead of the other way around!

While it may seem difficult to set aside money each month, even a small amount can add up over time if you are consistent. It's important to make sure that your savings are kept in a separate account from your checking account. This will help to ensure that you don't accidentally spend your savings. So, if you want to get serious about saving, make sure to pay yourself first! 

#9: Automate Account Transfers

One simple way to help you budget and save money is to automate your account savings transfers. Automating transfers to your savings account or investment account can help you make sure that you are regularly padding out your emergency fund or investments. Automating your accounts is a quick and easy money management tip for you to start working towards your long-term financial success. Don’t count on the Friday-at-5 version of yourself to whip out your laptop and make a transfer to your high-yield savings account or investment account - set it up automatically!

#10: Set Realistic Financial Goals

When planning for your financial future, it's important to set realistic financial goals for yourself so you can make the most of your hard-earned cash. One of the first things to do when setting these goals is to determine your priorities. 

Start with: What are you trying to accomplish in life and why is it important? 

Knowing the “why” behind any goal is essential to the goal-setting process. Simply saying, “I want to buy a house” or “I’m aspiring to buy a Tesla” isn’t always enough motivation to keep your eyes on the prize. Do you want a new home because you want a comfortable place to raise a family? Would you like to drive a Tesla because you value its low carbon footprint and high safety rating? Try adding an emotional value to the financial goals you make and truly visualize what your life would (and would not) look like with these new additions.

Next, consider what you want in the long-term. Are you financially planning for a baby, or hoping to invest in a new business venture? Look toward the next 5-10 years and dream big. Where can you allocate your money to secure the life you want long-term?

Finally, break down the goals above and set financial goals for the short-term. 

Do you have debt obligations that you really want to pay off, or an event later this year that you need to save for? Setting short-term savings goals is one of the many ways to manage your money and set yourself up for long term financial success. Once you have a good understanding of your personal finance priorities, you can start to figure out how much money you'll need to reach your goals and make necessary adjustments to your income and budget.

Pillar #4: Money In & Money Out: Managing Income and Spending

#11: Understand The Basics of Cash Flow

Cash flow refers to the amount of money coming in (all of your sources of income) and out (day-to-day spending) of your life. But what you might not know is that you can have positive cash flow or negative cash flow. It’s essential to understand the difference between the two and the influence it should have on how you manage your money. 

All that positive cash flow means is that you have more money coming in than going out. This is what we should strive for in the most basic of terms for our financial life, and it means that you are keeping some of the money you earn because you are spending less than you earn (yay!). On the other hand, negative cash flow is when you are spending more money than you are bringing in, which can quickly lead to financial trouble. 

Download my FREE Personal Finance Tracker here!

#12: List & Review Your Income Sources

To take stock of your current cash flow, you have to know your income sources. Do you know where all your money is coming from? This may seem like a simple money management question, but it can be surprisingly difficult to keep track of all your income sources, especially if you have various side hustles you’re working on. Reviewing and listing your income sources on a regular basis can help you stay on top of your finances and make sure you are getting the most out of your monthly spending plan. 

Make sure you list out the amount of each income source, the frequency with which it comes in, and whether the income amount is variable or static. By having a clear understanding of your monthly income, you can keep a better handle on what you can spend and your finances overall. That way you can make smart budgeting decisions and identify opportunities for building more income.

#13: Track Your Spending

Tracking your spending is the first step towards you controlling your money instead of the other way around! Knowing where your money is going is extremely necessary if you're trying to save money or stick to a budget. 

There are many ways to track your spending, including using mobile apps and even Google Sheets. Some of the more popular mobile apps include Mint, Monarch Money, YNAB, and Truebill, among others. And this doesn’t even include all of the free templates for tracking your spending that are available online. You can download mine for free by clicking here.

Just remember, there's no "one way" that works for everyone. So don't be surprised if your friends do it one way, your family another, and you yet another. It's less important how you do it, and more important that you find a method you actually use and that works for you. I know you will find the right fit for you!

#14: Experiment with Tracking Your Finances

Finding a finance tracking approach that works for you takes time. It’s important that you give yourself grace and plenty of room to experiment. When you track your spending for the first time, make sure you take note of every dollar in and out for at least a month. 

For me, this one month always felt like the right amount of time to truly test my money tracking system. A month is long enough to really give it a thorough test, but short enough that you can commit to the experiment.  I know it might feel like a daunting task, but I’m confident you can be consistent and follow through! Once you finish the first month of tracking your finances, that breadth of accomplishment is incredibly rewarding. Then you can adjust with frequency, depth, detail, and so on from there.

Download my FREE Personal Finance Tracker here!

#15: Make a Personal Budget (Optional)

While not everyone needs a budget, everyone does need to track their spending. If you’re really needing to control your spending though, creating a budget and sticking to it is one of the best ways to stay on top of your expenses and save money. This important financial tool encourages you to remain consistent with how you're managing money and can help you avoid overspending. Setting limits on how much you can spend in each category is one of the many steps you can take to help you have long term financial success and prevent you from getting into new debt.

It's also important to remember that your budget is a guideline, not a rulebook. It can change depending on events in your life. By taking the first step of tracking your spending habits and setting limits, you can take control of your money and make sure that you are always making the best choices for your financial future.

#16: Use the 50/30/20 Rule as a Starting Point

If you don’t know where to start, the 50/30/20 rule is a great starting point for telling your money where it should go. It states that you should be saving 20% of your income, spend no more than 50% on “needs”, and spend a max of 30% on wants.

Of course, everyone's circumstances are different, so you may already be saving more than 20% of your income, or you may not be able to save 20% right away, and that's OK! The important thing is to start somewhere. If you can only save 10% of your income, that's still way better than doing nothing and it gets you started. 

#17: Manage Irregular Income

Money management is important for everyone, but it can be especially challenging for those with irregular income. For example, being paid on commission in a sales role or having a significant fraction of your total compensation be from bonus incentives can be hard. You not only don’t know how much is coming in next month, you don’t know how much you can spend or save each month overall.

Equity compensation like an ESPP is another type of irregular income that can also be tough to manage. Because the value of equity compensation can fluctuate, it makes it difficult to predict how much money will come in at the end of the period (not to include the age-old question of selling or holding!). 

However, a big strategy you can use to manage your money more effectively when you have irregular income is just to utilize a larger buffer in your checking and savings accounts to help manage the volatility.

#18: Don’t be Afraid to Say No

Many people are afraid to say no, especially when it comes to spending their hard-earned money. They feel like they have to say yes to every request (6 bachelorette parties in a year?!) in order to avoid conflict or looking stingy. However, learning to say no is essential for saving money, helps you better manage your finances, and sets financial boundaries with your loved ones. 

Sometimes though, the “saying no” extends to yourself as well. It can be hard when everyone around you is sporting the latest iPhone or the latest trendy coat. I personally still have an iPhone 8 (which to me feels way newer than the iPhone 4 I traded in prior). Or worse, when everyone on your Instagram is traveling, and you’re at home wondering how someone can afford all of those trips. Resisting the peer pressure and FOMO may be hard at the moment, but saying no now can help you get to that financial stability you need and allow you a future full of “yes!”. So next time you're feeling guilty about saying no to yourself and to others, just remember that it's okay to put your financial well-being first.

Pillar #5: Saving 

#19: Set Savings Goals

Watching your bank balance climb is incredibly satisfying but it won’t necessarily help you reach your financial goals. Being deliberate and setting savings goals can have a larger impact on how you manage your money than trying to ride any savings momentum. Having a set savings goal will help you budget, stay on track, and make sure that you are putting enough money away every month.

To do this successfully, there are a few things to keep in mind when setting your savings goals:

Be specific 

Write out the exact number you want to achieve by the end of a clear time frame. If you want to save $4,560 over the next 7 months, know the exact number you need to save monthly and have a specific day in 7 months to accomplish this goal. Being this detailed might sound a little over the top, but the details are important and motivating.

Set measurable goals

Avoid vague goals like: “I want to save up for a trip.” Is this a trip to Paris? A cruise? A road trip? Each one gives a completely different meaning to the word “trip”. You need to be able to measure your progress to know how close you are to your goal. Instead of saying “I want to save money.” Set a goal that you can measure like; “I want to save $10,000 in 10 months.” 

Make sure that the goal is actionable

This means creating a plan or budget for how you will reach your savings goals. It is important for you to know what steps you will need to take and how much of your monthly budget and extra money you need to save.

Be realistic in your goal setting

I love being over ambitious when it comes to setting a savings goal, but it could hurt you in the long run. Being realistic could be the difference between pushing through the tough times and giving up a month in.

Create a clear time frame

Knowing the exact start and finish dates of your savings goals can add a healthy amount of pressure that influences your daily decision making. Having a date that you do not push back can give the extra motivation you need to hit your goals! 

Saving money can be difficult, but it's not impossible. By setting specific, measurable, actionable, realistic and time sensitive goals, you can make sure that you are on the right track to reaching your savings goals.

#20: Create an Emergency Fund

An emergency fund is an essential part of money management because it is your cash in case of unexpected expenses or events. Life waits for no one. This emergency money could be anything from a car repair to a medical bill or even support you after a job loss. The general rule of thumb is to save between 4 to 6 months’ worth of living expenses. 

Whether you have 4-6 months (or more) depends on how stable and/or irregular your income streams are. How many people depend on that income? If it’s just you and you have 2 pretty stable sources of income, then maybe 4 months’ worth is ok. If you have one pretty irregular income source and you have two dependents (Older parents? Boyfriend? Baby?), then maybe 6 months or even more would be wise.

Note that this money's job is to sit there, give you peace of mind, and be available for you whenever you need it. While you should typically have this money in a HYSA (more in the next tip!), it should generally not be in an investment account. When deciding how much money to have in your emergency fund, also take note of your personal risk tolerance. Even if you don’t think you truly need a full six months worth, you might still feel better having it!

#21: Keep Short-Term Money (Including Your Emergency Fund) in a HYSA Account

HYSA stands for high-yield savings account. This is a type of savings account that offers higher interest rates than most other traditional savings accounts. It is a great place to keep your short-term money savings that is accessible and yet separate from your checking account. This type of account is great for money like your emergency fund and allows it to still earn a competitive interest rate that does actually increase or decrease with the market rates (some of the big banks’ savings accounts only earn 0.01% interest!).

Many HYSAs are online only, and you can review the current top account offerings at a website like bankrate.com. Your money is still FDIC-insured up to $250,000 per depositor, just like any other bank account, and they also typically have low or no minimum balance requirements. These features make HYSAs a great tool to help you manage your money. HYSAs are accessible to everyone, regardless of how much money you have to deposit.

#22: Build Up Cash Before Big Purchases - Sinking Funds

If you have ever made a big purchase, then you know that it's important to have cash on hand. Relying on “buy now pay later” apps just encourages you to accidentally spend more than you bring in over a certain period of time. To prevent this you should only be spending money that is already in your checking account (even if you technically put it on a credit card first). This rule goes for big purchases as well - save up the money for the item first, and then purchase it from there.

#23: Align your Savings and Brokerage Accounts to Your Goals

I like to think of money for different purposes as in different buckets. Some money can be invested for the long-term, and some is meant to be readily available just in case it’s needed. The purpose of this tip is to make sure that you align the “investment level” of your money with it’s purpose. For example, it’s probably not the smartest idea to have cash sitting in your Roth IRA, or vice versa - having your emergency fund in crypto! (My financial planning heart just hurts thinking about that by the way.)

#24: How to Prioritize Saving to Multiple Goals

This is not the same for everyone! Some people may find that they are anxious without a full emergency fund and save to that first, while others have high-priority travel plans or credit card debt that might take priority. Prioritizing how to split the savings capacity you have available can be one of the hardest decisions for my clients because it’s so subjective and it depends on the person so much. Just make sure that you are consciously making these tradeoffs and decisions - you can always adjust to do what works for you!

Pillar #6: Retirement Planning

#25: Know What 401(k)s and Individual Retirement Accounts (IRA) Are

Your retirement is extremely important to contribute to, especially if you are young. This is you, late 20s/early 30s professionals!

Types of Retirement Accounts

To begin saving for retirement, you need to know your options. The most common types of retirement accounts are 401(k)s and Individual Retirement Accounts (IRAs). Both types of accounts are essentially containers for your investments that the government bestows tax advantages on specifically to incentivize us to save for our retirements. They are also what’s called “tax-deferred” - meaning that once the money is in, it grows without being taxed along the way. (Note that each of these account types has a pre-tax and a Roth flavor - check out the tips below for more explanation there!)

401(k)s

401(k) accounts are offered as a benefit from employers, sometimes with contribution matching. They can be offered in both pre-tax and Roth flavors (see a tip below for which flavor you should focus on!). In any given year you can contribute up to $22,500* (*in 2023) of salary deferrals (more if you’re over 50) regardless of how much money you make. The main catch to get the tax advantages is that you can’t take the money out before you are 59 ½* (plus a few other caveats).

IRAs

Similar to 401(k)s, there are two types of Individual Retirement Accounts: a traditional IRA and Roth IRA, and similarly you can’t take the money out until you’re at least 59 ½*. Unlike 401(k)s, IRAs are retirement accounts that almost anyone can open, with or without an employer-sponsored plan. Also unlike 401(k)s, IRA accounts have income limits where if you make more than the given limit you either aren’t allowed to contribute at all (Roth IRAs) or to take the tax deduction (traditional IRAs). IRAs also have a much lower $6,500* contribution limit (*2023) per year
*There are quite a few other rules around these accounts to be aware of as well.

#26: Contribute to your 401(k) or Other Retirement Account

All 4 of the retirement savings options above are great and even if you can only afford to contribute a small amount each month, it's important to start now. Contributing now allows your money to have time to grow so by the time you reach retirement, you could have a nest egg that will go the distance.

Even if you don’t resonate with the concept of retirement, it’s important to think about Future You because once you get there, there are no loans for it! You might resonate more with the concept of Financial Independence or Work Optional. The bottom line is that by contributing to these accounts you are giving Future You more flexibility and options, and you’re doing it in a smart, tax-advantaged way!

#27: Take Advantage of Employer Matching

Employer matching, in a nutshell, is when your employer will match a certain percentage of the money you put into your retirement account up to a limit. When it comes to retirement planning, employer matching is really a fun perk to consider. This is usually found under employee benefits sections of hiring paperwork and subsequently talked about during the onboarding process. 

Here’s an example of employer matching below:

Employer Matching Breakdown

You work for Company A and earn a $100,000 salary. Company A offers a 401(k) plan and offers a 50% match on the first 6% of your 401(k) contribution. This means that if you elect to contribute 6% of each paycheck ($6,000 annually) into the 401(k) on either a pre-tax or Roth basis, Company A will also contribute 3% (or $3,000) into your 401(k) on a pre-tax basis.

No matter the type of matching your employer offers, it's generally worth at least contributing to get the full benefit of their matching program. But don’t feel you have to stop there! The more you can contribute on your own, the better off you'll be in retirement.

Pro tip: See if your employer offers a “true up” - if you front-load your 401(k) contributions, sometimes an employer will not “true up” their match, even though you’re contributing more than what’s needed to max out the match. You could be missing out on “free money” here!

Check out my Step-by-Step Cheatsheet to Financial Freedom!

#28: Pre-Tax v.s. Roth “Flavors” - Optimize How You Contribute to Your 401(k) or IRA

When it comes to planning for retirement, part of the process involves figuring out what kind of retirement account is right for you. We’ve already discussed two of the most common types of retirement accounts above. Both 401(k)s and IRAs typically have a “pre-tax” option and a “Roth” option. Both styles have their own advantages and disadvantages, so it's important to understand the difference between them.

Pre-Tax Accounts

A pre-tax account type includes the 401(k) where you contribute money to the account before paying taxes on that income (i.e. your employer doesn’t withhold taxes from your paycheck on these contributions, so you effectively only pay tax on a lower income, getting a tax break now) and instead pay taxes only upon distribution later (later being way later - like in retirement later). This reduces your taxable income in the current year and lowers your overall tax bill. 

Roth Accounts

With a Roth IRA or Roth 401(k), you contribute money that has already been taxed. This means that when you withdraw the money in retirement, you won't have to pay any taxes upon distribution* (yay!). You can imagine that while there’s a lot we don’t know about future tax rates, tax brackets, and so on, what you do know about is you. If you imagine earning a larger salary in the future and are in a relatively low tax bracket now, a Roth IRA or Roth 401(k) might be a good idea. Conversely, if you’re already in a high tax bracket, a pre-tax 401(k) might be the way to go. 

*Assuming you meet the requirements.

You Can Choose Both

Note that contributing to a 401(k) does not preclude you from also contributing to an IRA (they have totally separate contribution limits!), so you might be able to contribute to both!

Both types of tax advantages have their uses, so it's important to understand their differences before making a decision. Ultimately, the best retirement saving strategy is the one that fits your personal finance situation and goals. No matter the investment vehicle, taking the time to learn about your options and invest will best help you move financially forward.

#29: Your Retirement Accounts: To Roll Over or Leave Alone?

Know the factors to take into account when you’re considering leaving your old employer’s retirement account alone or rolling it over into another 401(k) or IRA. While there’s no one right answer, there may be different considerations that matter to you, from account fees, investment options, number of accounts, and so on. Just make sure you don’t forget about any of your hard-earned money!

Pillar #7: Optimize Your Spending

#30: Know Your True Monthly Spending Number

Most people tend to underestimate how much money they're spending each month. They think, "Oh, I'm spending $1,000 on rent, $300 on bills, and then probably about $200 on groceries and other things.” Unfortunately, this rough estimate can leave hundreds of spent dollars unaccounted for in those “other things”. For example, you won't realize how much you're spending on Postmates until you take a month's worth of food deliveries and actually add them all up. The numbers can be staggering!

Even though you're probably keeping track of your large monthly bills like rent and utilities, it is just as important to keep track of that weekly Target trip. Take a weekend to pull up your credit card and bank statements (it’s probably easier than you think with an online tool like your bank or Mint). Know what all of your monthly expenses truly are, and be honest with yourself - there’s almost always something expensive that comes up each month!

Download my FREE Personal Finance Tracker here!

Here's a list of some expenses my clients frequently miss:

• Vet bill for your dog (last month it was a flight to a wedding, the month before that a big birthday dinner...)

• Monthly subscription services (Netflix, Hulu, Disney+, HBO, etc...)

• Food Delivery

• Amazon purchases (these add up fast!)

• Subscriptions on the App Store

• Free trials you never canceled

#31: Spend Intentionally According to Your Values

When it comes to money management, it's important to be intentional and spend according to your values. Before you make any purchases, take a minute to think about what the item is going to do for you — will it bring you closer to achieving a financial goal or help you fulfill one of your life ambitions?

If not, then it might not be the smartest way to use your money. Not only will this help you save more, but it can also make your life a lot simpler and less stressful. Instead of impulse buying, take the time to think about what would bring you the most value in both the short and long term.

Spending intentionally according to your values is one of many important money management skills. By taking the time to think about your purchases and make sure they line up with your goals, you can save more money, stick to your budget and simplify your life.  So start asking yourself if a purchase is worth it before you swipe! 

#32: Cut Back Recurring Charges

Piggybacking off the last money management tip, what recurring charges have you been meaning to cancel but just haven’t gotten around to yet?

What about that free trial you signed up for 5 months ago that was only meant to last 30 days? It's essential that you go through your credit card statements with your auditing hat on. Ask yourself, "What is on here that I'm not using or did not get enough value or enjoyment out of?". 

Could it be Netflix? A free trial you never canceled? Doordash Premium? A recurring Amazon purchase you could have sworn was a one-time thing? 

#33: Pay Bills on Time

This one might seem like a no-brainer, but it's critical that you pay your bills on time. Not only will this help you avoid costly fees and interest rates, but it can also save you from late payments showing up on your credit report.

Try setting reminders for yourself in advance of your due dates, or setting up automatic transfers and payments to ensure that your bills don't slip through the cracks and you don't spend extra money on debt repayment with high interest rates. If you're having trouble remembering when your payments are due, consider setting aside a designated day of the week for paying all of your bills. Establishing good spending habits like this will ensure no debt payment gets forgotten.

Choosing to manage your money well isn't always the fun choice, but it's an essential part of taking control of your life and achieving financial freedom. With these money management tips, you can take the first step towards creating a budget that works for you and saving money!

#34: Find Discounts or Pay Cash Upfront

Discounts can be a great way to save money and buy things you want and need without the guilt. (Just be sure you’re not buying just to get the discount! Because that equates to more money out of your pocket anyway.)

These are some of the best ways to find deals:

• Online Promo Codes

• Discount Apps

• Email Sign-up Bonuses

• Referral Programs 

• Pay Cash Upfront

• Email Newsletters

• Rewards Programs

Before you know it, 10% here and 20% there adds up, which equates to more money in your pocket.

#35: Use Credit Cards the RIGHT way 

Proper credit card use can move your finances forward by leaps and bounds, OR dig yourself into a slow hole you didn’t even know you were getting into. You should really only make a purchase with a credit card that you have "free" money in your bank account to theoretically turn right around and pay the credit card company back. You don’t want to be locking in your future income to pay for your present, or alternatively, using your current income to pay for your past. That is worrying about debt repayment, and it’s not fun.

Make sure you pay off your credit card in full every month (not just the minimum payment amount that’s in big font!), and ideally don’t even wait until the end of the month to pay it. Using any extra money to pay your credit card bill at least 2 or even 3 times per month will prevent you from having surprises when the bill comes – because depending on the timing, you could actually be paying for something almost 2 months later on the ‘statement date’!

(More on managing your credit responsibly later on.)

#36: Plan Ahead for Seasonal Expenses and Events like Weddings, Birthdays, and Vacations

Many of us overlook seasonal expenses and events like Christmas, weddings, birthdays, and vacations. But if you want to stay on top of your finances, it’s important to plan ahead and budget for these occasions. Start by setting aside a little bit of extra money each month so that by the time the event rolls around, you won’t be scrambling to come up with the funds. This is often called a ‘sinking fund’.

You can also create a budget for the holiday/event and stick to it, so you can avoid overspending like so many accidentally do. If you're willing to put in a little extra effort, you can come up with the money you need and not stress about it after the fact.

Whatever route you choose, remember that it's important to start planning ahead so that you can enjoy your vacation, holiday or event without worrying about money!

Pillar #8: Managing Debt Responsibly

#37: Create Your Debt Paydown Strategy

When it comes to creating a debt repayment strategy, it is essential to create a plan for how you’re going to approach your payments. This will involve determining which debts you want to target first (e.g. high-interest rate credit cards or tax debt) and then setting up a payment schedule that works best for you.

Two of the most popular and effective methods include:

• Snowball Method: This method involves paying off your smallest debt first, then moving onto the next one. The idea is to start small and build momentum as you slowly but surely chip away at each balance, adding each previously-completed debt payment to the next debt.

• Avalanche Method: Also known as the “debt stacking” method, this strategy involves tackling your debts with the highest interest rate first, then moving onto the next highest. By taking this approach, you’ll save money in interest payments over time and bring down your balance faster.

Both methods have their pros and cons, so it’s important to weigh them carefully before deciding which one (or which combo!) is right for you. No matter which strategy you choose, the important thing is to create an actionable plan and stick with it. This will help you stay accountable and see progress as you work towards becoming debt free.

Don't forget that if at any time your financial situation changes or if you need help, there are financial advisors like me ready to guide you every step of the way.

Click here to book a free 15-minute intro chat with me.

#38: Pay Off That Debt

Whether it’s personal loans or credit cards or something else, getting rid of your debt as quickly and efficiently as possible can free up a lot of breathing room in your budget.

Tackling Credit Card Debt

With credit card debt, first of all make sure that you’re paying at least the minimum payment every month to avoid late fees and damage to your credit score. Then, try to focus on the cards with either the highest interest rates first or the smallest balances first. What will be most motivating to you? Once you decide on an order to pay down your credit card debts and personal loans, go for it! 

Effectively navigating your interest payments is one of the most important money management skills you can learn. One way you can do this is through balance transfers to a credit card with a 12-16 month 0% APR sign up bonus. If this is something you decide might be right for you, be sure to avoid opening any new cards with high interest rates if you are not certain you can pay it off by the end of the interest free period.

When it comes to student loans, begin by making a list of your different chunks and their interest rates and types. Depending on whether your loans are with the federal government or a private lender, you will have different options and programs to help you. Be careful to analyze the options because while it might be tempting to go with the plan that gives you the lowest monthly payment today, that might not be the best payment plan for you overall.

Finally, make it a priority to get rid of high-interest/high-urgency debt as soon as possible so that you can stop throwing your hard-earned money into the debt hole.

#39: Consider Consolidating or Refinancing Your Debt

While not for everyone, debt consolidation can be a great way to manage and pay off your debt quickly. Essentially, it involves combining all of your debts into one loan with a lower interest rate or credit card with a sign up incentive like the one we just discussed. This can help you save money in the long run and make it easier to keep up with payments each month.

When considering debt consolidation, explore options like balance transfer credit cards or taking out a personal loan. Just be sure that any new loan terms are affordable and make sense for you.

Additionally, be aware of potential risks such as the possibility of racking up even more debt or negatively impacting your credit score if you are unable to pay. Something that can help you avoid this is setting up monthly automatic payments for the total debt divided by however many months you have interest free.

The key is to assess your current finances and make sure that debt consolidation is the best option for you. With a bit of planning and research, you can use this as an effective tool to help you reach your financial goals and flex those money management skills! (If you’re not sure, I’m here for you too.)

#40: Know When to Not Pay Down Your Debt

When it comes to debt, it’s important to know when to not pay. Before you decide to pay down your debt, there are a few things you should consider.

First, determine if the interest rate on the loan is fixed or variable. If the interest rate is fixed and low (e.g. 3% or lower), then paying off the loan may not be your best option. You won’t save much money in interest payments but in turn would lose the liquidity of the funds in your account.

Second, look into whether or not any penalties apply for early repayment of your loan or credit card balance. Some lenders impose these fees and they can eat away at any money saved by paying the debt off early.

Third, consider whether you have any 0% APR debt. This type of loan does not accrue interest and may be a better option than one of the other methods with a higher interest rate. In this specific situation, it might be better to keep more cash in your account than throw a lump sum at debt you've paid a flat fee for.

Finally, assess your current financial situation to make sure that you’re not putting yourself in a position where you have no capital in the event of an emergency. Having a “starter emergency fund” for just-in-case is generally preferable so if you’re struggling to pay off all your debts at once then try focusing on creating an emergency fund first. By understanding when it makes sense to keep debt and when it doesn’t, you’ll be able to manage your finances more effectively and save money in the long run!

Pillar #9: Investing

#41: Just Get Started

The process of starting to invest can be intimidating, but once you understand it and have a plan set up for yourself, it will become easier. Investing is a long-term game, and I find that my clients are often surprised at how it’s not nearly as complex as they thought previously. You’ve got this!

Investing is an important part of managing your finances, as it allows you to grow your assets over time. It’s never too early to start investing, so make sure you understand the different types of investments available and create a plan that fits your individual needs. Investing doesn’t mean putting all of your money into individual stocks - there are other options such as mutual funds, ETFs, bonds, or even real estate that can help you comprise a well-diversified portfolio.

The good news is that you’re probably already investing within your workplace 401(k) or other retirement account. Even more good news is that if you’re ready to invest more, you can open a general brokerage account (an account specifically for investments) and invest there!

Check out my Step-by-Step Cheatsheet to Financial Freedom!

#42: Rebalance Your Investment Accounts Regularly to Have a Well-Diversified Investment Portfolio

Rebalancing your portfolio is an important piece of investing. This means adjusting the percentage of each investment class in your account so that it reflects your desired allocation on a regular schedule. This helps ensure that you have a well-diversified portfolio and will help maintain your desired level of risk over time.

Rebalancing is one of those money management tips that gets overlooked too often and should ideally be done on a regular basis (at least once or twice per year). It can also help maintain diversification during times of market volatility and help take the emotion out of it (not to be underestimated!).

#43: Take Advantage of Compound Interest

Compound interest is a powerful tool when you have time on your side! For example, let's say you start with an initial investment of $10,000 and earn 5% interest each year. After one year, this would amount to $10,500. But then the following year you would earn 5% interest not only on the initial $10,000, but also on the additional $500 that was earned in the first year. This process can continue to compound over time and if left untouched even a relatively small sum of money can grow significantly over a number of years.  

Take advantage of compounding interest by saving and investing regularly and for long periods of time. The sooner you start investing, the more opportunity there is for your money to grow! 

#44: Reinvest Your Dividends

To best take advantage of the money in your brokerage account, set up your dividends to be reinvested. Some companies essentially have enough extra cash that they return a small portion of their profits back to shareholders on a regular basis, and this is typically done in the form of a dividend. What this means for you is that you will occasionally see these dividends pop up in your brokerage account in the form of a few cents here and a few dollars there in cash. However, this cash isn’t doing you any good just sitting there! Lucky for us, most financial institutions allow you to set up your dividends to be automatically reinvested. Win!

(Note: There are definitely cases, situations, and types of people where it doesn’t make sense to do this, so do your homework!)

#45: Track Your Investments’ Cost Basis by “Specific Lots”

The cost basis of an investment is the amount that you originally paid for it*. When you go to sell your investments later, you don’t pay taxes on this part because this was your initial contribution. You only pay taxes on any capital gains over your cost basis. It’s necessary to track your investments’ cost basis accurately so that you know how much money was made or lost during the sale.

Tracking by “specific lots” means that each investment chunk bought is tracked separately, taking into account any changes in price over time (such as dividend payments). This way, when you go to sell a particular lot of shares, you can choose which chunk to sell and will know exactly what the original cost basis was and how much profit or loss was incurred on the sale (so you can optimize your taxes on any gains or losses!).

Most brokerages keep track of this for you, and “specific lot” or “spec ID” is just a cost basis method you need to designate. Win! 

Pillar #10: Establishing and Managing Credit Responsibly

#46: Pay Off Your Credit Card in Full Each Month

When it comes to establishing and managing credit responsibly, the most important thing you can do is aim to pay off your credit card balances in full each month. This will help ensure that you don’t accumulate debt just from your day-to-day spending and also avoid late payment fees.

You can also break up payments into smaller increments throughout the month. Not only could this make it more manageable, but it can also help improve your credit score over time because your overall credit card balance will be lower on average throughout the month.

Another great way to stay on top of your debts is by setting up automatic payments. This will make sure that your payments are made on time and can help reduce the risk of any late fees or negative impacts to your credit score. 

By taking basic steps like paying off your credit card in full each month, you’ll be able to better manage your finances and avoid accumulating debt. So remember, keep a close eye on your spending habits and aim to pay off all of your debts in a timely manner!

#47: Review Your Credit Report Regularly

It’s important to make sure you’re regularly checking your credit score for errors or fraudulent activity. By doing this, you can quickly act on any incorrect information or theft and ensure your credit score is accurate.

One of the best ways to do this is by signing up for a credit monitoring service that will send you alerts when changes are made to your report. This way, you’ll be able to stay on top of any discrepancies and take action if needed. Additionally, most credit cards also offer free daily credit scores that let you track progress over time.

You should also check your actual credit report yourself once per year using at least one of the three major bureaus – Equifax, Experian, and TransUnion. Just make sure that all the accounts listed are yours and everything generally looks correct. It’s important to check all three since some creditors may not report to any one bureau. By regularly checking your credit report and signing up for a monitoring service, you can better manage your finances and ensure that no fraudulent activity is taking place.

#48: Establish Good Credit Habits

Having a good credit score is an important part of managing your finances. Good credit can help you get better rates on loans and access to more financial opportunities, such as a larger loan amount or lower interest rates. It also makes it easier for lenders to trust that you will be able to pay back the money they lend you. Having a good credit score also gives you peace of mind knowing that if something unexpected happens, like losing your job, it won’t take long for banks and other creditors to approve new lines of credit or loan applications.

Good credit habits are essential for getting and maintaining a good credit score. This means paying all of your bills on time, not using more than 10% of your available credit, and avoiding any behaviors like taking out payday loans or applying for too many cards at once.

This will show creditors that you have the ability to manage your money responsibly, and it will help keep your credit score in good standing. 

Note that your credit score isn’t everything though! Your credit score only reflects how you handle debt itself. So if you find yourself in a situation where you have to prioritize your overall personal finances or your credit score, you should generally pick the former!

Download your 10 Steps to An Abundant Financial Future here!

#49: Review Credit Cards and Ask for Credit Limit Increases

If you are already managing your money responsibly, consider asking for increased credit limits on your credit cards.

Even though there might be a slight hit to your credit score at first (you asking for more credit), an increased credit limit will lower your overall credit utilization rate which can boost your score over time.

#50: Get Credit Cards Based on What YOU Need

Getting credit cards based on rewards programs is great, but it is just the icing on the personal finance cake. Rewards cards offer discounts or points for purchases you make with the card, allowing you to save money on everyday purchases.

Sometimes you just can’t beat a simple cash back card with no annual fee - you can redeem the cash every month and put it to use (or towards your credit card bill) straight away. It's essential that you stay disciplined when using rewards cards. Don’t purchase extra items just for the discount - that’s still “losing” money! And if there’s an annual fee, make sure that you anticipate getting net rewards that are higher than that.

Pillar #11: Estate and Everything Else

#51: Prepare for Tax Season All Year Long

Taxes can be a daunting task for many people, but knowing how to prepare for them all year long can make the experience much less painful. Staying organized and on top of tax obligations throughout the year makes it easier to file taxes quickly and accurately when the time comes.

Start by making sure you have a list of the different companies and institutions that you’ll be receiving tax information from come tax time. Keep track of receipts or any other documents that may be needed to back up any deductions that apply to you (i.e. home office deduction, rental maintenance, etc.). This will help ensure that you have accurate numbers to enter when filing your taxes. 

Tax planning allows you to identify opportunities in your own life to take advantage of particular situations such as low-income years, high-income years, getting married, having a baby, etc. There are definitely planning opportunities to consider if any of those apply to you!

Finally, stay up-to-date with changes to contribution amounts and income limits for different retirement accounts. These numbers typically change every year. Knowing how new tax laws may affect you can also help you to make more informed decisions throughout the year and potentially reduce your overall tax bill. By following these tips, you can make tax filing much easier and less stressful come April.

#52: Plan for Your Estate

When most people hear the word "estate," they think of large mansions and vast tracts of land. However, estate planning is not just for the rich and famous. An estate plan is simply organizing your money and property during your lifetime to optimize how it’s handled after your death or if you could no longer do so during your lifetime.

One of the main benefits of estate planning is that it gives you control over what will happen to your money and possessions and makes it easier on your loved ones when you’re no longer here to tell them. Without a plan, the state will determine how your assets are distributed, which may not be in line with your wishes. Estate planning can also help you manage your money during your lifetime. For example, if you become incapacitated, an estate plan can designate someone to manage your finances on your behalf.

In short: Planning your estate is a crucial part of preparing for your future, while also protecting your loved ones. 

Check out my Step-by-Step Cheatsheet to Financial Freedom!

#53: Have More than One Income Source

Most people rely on a single income source - their job. But what happens if you experience job loss due to a recession (like the 11,000 layoffs at Meta in 2022 *Mind Blown Emoji* )? Would you still be able to support yourself or your family?  Having multiple income sources is a great way of providing financial security and stability for you to fall back on in a time of need and help boost your sense of financial abundance and independence. 

Now I’m not saying you have to become Oprah tomorrow, but if financial success is something you aspire to, having more than one way to make money is key to having in your back pocket. There are many different ways to create additional income sources. You could build a side hustle selling hand-made crafts, start a freelance business, or invest in rental properties. Whatever route you decide to go, diversifying your income streams is a smart move that will help not only protect your finances, but build an affluent and abundant financial future.

#54: Optimize Your Insurance Premiums for Your Needs

When it comes to money management, your insurance premiums can be one of the biggest expenses. To make sure you're getting the most bang for your buck, take some time to analyze and optimize your policy for your needs.

Start by assessing how much coverage you actually need and evaluating any additional providers or discounts that you may qualify for. You can also try bundling your insurance with other policies to get a lower overall rate. Additionally, look into switching providers if you find that another company is offering better coverage at a cheaper price. The goal is to keep as much of your future paychecks available for other expenses and living costs.

For example, if you have a full emergency fund, then you might not need to pay more for the $100 deductible when you could select a $1,000 or $2,500 deductible for a lower payment. Yes, if something happened, that deductible would apply, but in the meantime, you would be saving up front on the premiums and pocket that extra money.

By taking the time to analyze and optimize your policy, you can make sure that you’re getting the most out of your money while getting the coverage that you need.

#55: Plan Your Finances with your Significant Other

Most people enter into a relationship with the hope that it will last forever. But if you're not on the same page when it comes to finances, it can be easy for things to start falling apart. (Unfortunately, 41% divorces are due to disagreements around money.)

It's so important to approach finances as a couple rather than as individuals. Now, this doesn’t have to mean getting a joint bank account with your partner, but it is essential for couples to talk about money to establish things like saving habits, creating a monthly spending plan, and having a joint financial position.

Being on the same page financially with a partner can give you a sense of security and confidence in your future together, especially if you ever plan on making a large purchase like buying a home or car. Talk honestly and openly about your spending habits and build a financial plan together so that both of you are clear on your direction and goals. By being proactive, you can set yourselves up for a future of abundance - both financially and emotionally.

#56: Have Life insurance (If You Have Dependents)

If you don’t have anyone depending on you, then you probably don’t need any life insurance. But if you do and you don’t already have more than enough money to live on for the rest of your life (winkface), then it’s definitely something you should consider having. Make sure your loved ones will be ok no matter what!

#57: Understand and Optimize Your Equity Compensation Decisions

Many of my clients have equity compensation, and it’s such a tool that can really drastically change a financial situation. Whether you have ISOs, NSOs, RSUs, an ESPP, or some combination of all of them, make sure you do your research and really optimize your choices here. Too many people just ignore this very significant part of a compensation package, and it can be a huge win for you. I know that it can be scary to look at so many acronyms and have to make big decisions around this, especially when there’s so many other pieces of your financial life to think about (I mean goodness, we are already at tip number 57!), so do know that this is exactly what I do and I am here to help you figure what what makes sense for you.

Pillar #12: Extras: The Icing on the Personal Finance Cake

#58: Leverage Credit Card Rewards

Assuming you’re using your credit cards correctly, the icing on the cake are the rewards with different credit cards. Many credit card companies offer incredible rewards and points programs that allow you to save money, get cash back, or even receive discounts on travel.

If you're using a rewards program, make sure to read the terms and conditions so that you know what kind of rewards you're eligible for. For instance, if you're a frequent traveler, look into cards that offer miles and discounts on flights and hotels. Or, if you're looking to save money on everyday items, search for cards that give cash back or discounts on groceries and gas.

Once you find the right card for you, you can start leveraging those credit card rewards to save even more money. Just make sure that you always pay off your balance in full each month so that you don't end up having to pay interest!

With the right strategy and a little bit of discipline, you can maximize your savings and build a stronger financial future for yourself.

#59: Contribute to Your FSA or HSA

Flexible Spending Account (FSA) or Health Savings Account (HSA) are both types of accounts that allow you to set aside money for healthcare expenses. FSAs are offered through your employer and allow you to set aside pre-tax money to pay for eligible healthcare expenses, including co-pays, prescriptions, and deductibles. The only problem with this is that you only have a limited amount of time (a year or so, depending on the employer) to use the money, otherwise you lose it!

HSAs are a great option if you have a high deductible and want to save money for retirement. HSAs can be used for the same expenses as FSAs, but they can also be used to invest your savings and grow your account balance over time to help pay for retirement healthcare costs. One of the best advantages of using these accounts is that the money is not subject to taxes! In short, contribute to your FSA or HSA as the “icing on the personal finance cake”. 

Pro tip: While FSAs and HSAs are generally mutually exclusive, if you have an HSA, you can still likely sign up for what’s called a limited FSA that you can use for dental and vision.

#60: Maximize Your Employee Benefits

Maybe your employer offers a wellness incentive, or pet insurance, or maybe it’s cases of beer. Regardless, it’s worth reading through your employee benefits booklet to identify which “fringe benefits” make sense for you. These are fun, and everything helps!

One Last Tip/Parting Thoughts

#61: Be Patient!

In the end, being patient after you’ve got your money management system set up can often be the hardest part. Once you’ve optimized and set up your automatic transfers, let it be out of sight and out of mind to a reasonable extent. Be sure to live your life even while you let your money work for you. Life waits for no one!

Conclusion

Managing money can seem like a daunting task, but it doesn't have to be. By implementing the money management tips I've provided in this article, you will be well on your way to managing your money better! In the same breath, if you feel overwhelmed reading any of this, I am here to help. 

As a financial planner and coach, I specialize in helping early career professionals build a strong financial foundation for their future. From the basic steps of budgeting to retirement planning and more, I am with you every step of the way. Through our personalized 1:1 meetings, we'll create a customized financial plan that takes into account your short-term and long-term goals. Whether you're looking to boost your credit score by changing your spending habits or optimizing your equity compensation and a windfall, I'll provide tailored guidance that fits perfectly with your lifestyle.

I'm here to show you how small steps can lead to big rewards. With my help, you'll discover just how simple it can be to start taking control of your finances today. 

At the end of the day, my goal is to empower YOU by providing accessible financial education and guidance along the way. So if you are ready to take command of your finances and build a secure financial future, let's get started today!

Book Your Free 15-minute Intro Chat Here and let’s reach your money management goals together!

Disclaimer

This article was written to help you understand finances. This is not legal, financial, or professional advice. I do not hold any responsibility for your actions. Please consult a financial professional if you have any questions or concerns.