12/03/2021
*** What personal finance tips do you have? ***
Originally Answered: What is the key to successful personal finance? - By Dale Miller
1. Save like a maniac—at least 15% of your gross pay. Save more than 15% as your income increases.
2. Avoid debt like the plague. Aside from a fixed-rate, 15-year mortgage costing no more than 25% of your take-home pay, adopt the following philosophy: If I can’t pay cash for something, I can’t afford it. Consistent with that, pay your credit card off in full every month—no amount of frequent-flier points, or cash back, is worth paying 18–20+% interest. If you can’t discipline yourself to do that, cancel your card, cut it up and only use a debit card/cash.
3. Invest sensibly in low-cost, well-diversified equity index mutual funds. You can learn all about doing so on Vanguard’s website.
4. Understand the difference between needs and wants. Buy your needs, and only the wants you can afford. (See #2 above.)
Simple rules, really. Now all you have to do is follow them. Good luck!
