|Here's a list of advice for
Keep track of what you spend!
I know this sounds pathetically simple,
but there's more to it. I mean keep track of every
penny you spend. If you buy a pack of gum, log it!
You can use a spread sheet, like Excel, and make
categories (food, phone, rent, clothing, gifts)...
You can make it as specific as you like -- for example,
instead of just "food" how about groceries, fast food
and restaurants. The key is to stick all receipts
for the day in your pocket and enter them into the
computer each night.
You certainly don't have to do
this all the time... But, I'm telling you, if you
do this for just a couple of months, it will change your
spending habits (the bad ones). You will,
literally, stand in a store and think, "Dang, if I buy
this DVD (that I don't need), I'm going to have to enter
it into my stupid spreadsheet!"
"Buy and hold" goes for cars too!
You know those people who get a new car
every year or two? Well, chances
are very good that they are just one
paycheck away from losing everything.
Cars depreciate, so the second you buy
them, you are losing money. The
only way to get your money's worth out
of this expense is to keep the car for
several years. If you buy smart
(do your research),
you can buy a good
car that will remain reliable for years.
And, remember, always buy used!
Let someone else eat that big initial
depreciation when they drive that brand
new car off the lot.
Be a smart shopper!
With the Internet at our disposal,
there's no excuse to pay more than you
need to or to buy a bad product.
ALWAYS investigate big purchases!
Cars, electronics, even little things
like music and movies... Do
research and buy the best that you can
afford. For things like car
stereos, it's better to pay more and get
a better quality item. It will
sound better and last longer. For
cars, you can check out sites like
Trader to check on prices and sites
Edmunds for quality and reliability.
For electronics, you can check out
customer reviews on sites like Circuit
Buy real estate!
Buy a house or condo as soon as you can.
Why? Because very few things
appreciate (go up in value) like real
estate does. You can buy a house
for $200,000 and just 5 years later, it
could be worth $300,000. Heck, in
some areas, values have gone up over
$150,000 in the last 18 months!
Also, you get to deduct the interest on
your mortgage from your taxes.
Let's say you make $50,000 a year and
you paid $6,000 for the year in interest
on your mortgage loan... You get
to subtract that and you'll really just
have to pay taxes on $44,000.
Remember that "want" and "need" are two
very different things. You have a
long life ahead of you and you don't
need everything right now... You
just want everything right now. Be
patient. Plan. Invest.
The end rewards will be worth the wait.
Don't buy the
Mercedes (and make payments) when you
should by the Toyota and invest the
rest. Other than a house and a
reasonable car, if you have to finance
it or put it on a credit card, you don't
deserve to have it yet. (Other
than emergencies, of course, or investments in your
future, like a computer for a new
Don't have credit card debt!!
And, if you do, pay it off before you
start to save money. If you are
paying 19% on your credit cards and
putting money away in a savings account
that makes 2%, you are still losing 17%.