30 Personal Finance Tips to Become the Master of Your Money

A 2023 survey by NerdWallet, conducted by The Harris Poll, showed that three out of four Americans have a monthly budget. Although at first that sounds encouraging, 84% of the same people report going over their budget occasionally, which tells us that, despite the intention being there, it’s sometimes hard (or impossible) to stay within your range.

If you can relate to this, the good news is that there are many different ways in which you can implement changes in how you spend — and how you relate to spending — money. Below, we’ll discuss 30 tips that can help you form better habits as well as strengthen your awareness on how you currently fare in the personal finance department.

1. Create a budget

If you don’t have a monthly budget, you may want to begin by creating one. Getting into the habit of budgeting is a good way of becoming more aware of your finances more generally, which can be beneficial even when you aren’t struggling financially.

If anything, building this habit early on can ensure that, when or if the time comes, you’ll have the necessary “tools” to identify where saving money may be possible and start implementing changes right away.

2. Follow the 50/30/20 rule

The 50/30/20 rule offers a suggestion as to where your money should be allocated each month:

• 50% should go toward non-discretionary expenses, such as rent and food
• 30% should go toward discretionary expenses including vacations and entertainment
• 20% should be put aside into a savings account or go toward debt payments

Although it may not be possible to stick to these numbers every single month, having them serve as a general guideline can help you stay on track and rethink some of your expenses.

3. Set financial goals

Setting goals can be motivating, as your actions are bringing you a step closer to accomplishing a vision you’ve created for yourself. The sense of reward that comes from meeting such targets can then push you to set bigger ones, work harder and accomplish even more.

It’s a good idea to start with one goal rather than try to meet several targets at one. All you need is a definition for your goal, like saving for a vacation or creating an emergency fund, and a form of deadline to have met your goal by.

4. Create a financial calendar

A good habit to get into (especially if you’re the type of person who easily gets distracted) is to create and maintain a financial calendar. Setting reminders for upcoming payments, such as your quarterly taxes, can ensure you give yourself enough time to prepare.

You may also want to periodically set reminders for checking your credit report so you’re always on top of any changes.

5. Pay attention to interest rates

If you have taken out several loans, you should prioritize paying off the one with the highest interest rate. If it’s time to open up a new savings account, try to pick the one with the best interest rate. If you use your credit card for most purchases, make sure you understand how the compound interest works.

What we’re getting at here is that you should always be on top of what interest rates are paid and where, and striving to get yourself the best deal possible.

6. Stay aware of your net worth

Your net worth is the difference between what you own and how much you owe. In other words, it’s a reflection your remaining assets once you take away any debt you may have.

Although it can be unpleasant to think about debt, doing so can be a sobering act that ends up informing your financial decisions for the better — especially if you’re prone to impulse buys.

7. Keep an eye on your credit report

Much like being aware of your net worth, keeping an eye on your credit report can help motivate you to make better choices when it comes to spending money.

Your long-term financial success can depend on your ability to maintain a healthy credit score. The more creditworthiness you build, the better the interest you’ll be offered, should you take out a bigger loan (for example: to buy a home).

8. Consume personal finance resources

We recommend picking up a few personal finance books or listening to personal finance podcasts (or even audiobooks) if you’re not a big fan of reading. The more time you spend informing yourself, the more naturally certain habits will come.

Popular reads include The Psychology of Money by Morgan Housel and I Will Teach You to Be Rich by Ramit Sethi.

9. Move your savings out of your checking account

Having a separate savings account can make all the difference between keeping the money you’ve set aside safe and unintentionally spending half of it on an online shopping spree. Let’s face it: if the money you’ve saved is always within reach, it will become even harder to resist spending it on things you don’t need.

10. Try the all-cash diet

With online and contactless payments being the norm, it can be hard to have a clear idea of how much money you spend and how often. Relying on cash more, however, like in older days, can increase your awareness of how quickly money really goes.

The all-cash diet refers to spending cash for most if not all your daily expenses, from filling up your gas tank to paying for your groceries.

11. Build an emergency fund

Life is full of unexpected events; we all have to deal with them at some point.

To ensure that you’re as prepared as possible, make a goal out of setting aside a sum that’s large enough to cover three to six months’ worth of rent, food and utility bills. You never know when you might need it!

12. Start the month with savings

A lot of us get through the month, leaving our savings for last. That is, we take whatever money is left at the end of the month and put that into our savings account.

What can be more beneficial, however, is to take the amount we’re hoping to save at the start of the month (informed by our monthly budget) and have that be the first payment of the month. That way, we’re not tempted to spend money we could otherwise be saving elsewhere.

13. Cut down on variable expenses

Knowing your monthly variable and fixed expenses is key to effective financial planning.

Fixed expenses include things like rent and loan payments — they’re the same every month. Variable expenses, on the other hand, refer to things like food and shopping, which aren’t fixed, and therefore they’re easier to reduce.

14. Take a daily money minute

Alexa von Tobel, founder and CEO of personal finance website LearnVest.com, recommends setting aside 60 seconds a day to check in on your finances. It can help you identify areas of overspending as well as monitor your progress, which reduces the likelihood of adopting an “out of sight, out of mind” approach to your finances.

15. Create a financial vision board

Vision boards are a great way of having a physical reminder of what you would like your life to look like. Creating one for your personal finances and putting it up in your house, in a room you frequent such as your kitchen or living room, can serve as an unconscious motivator that pushes you toward making better choices.

16. Create a meal plan

What do meal plans have to do with personal finance? Well — according to a report by Owl Labs, people working from the office spend, on average, $13 on breakfast and coffee and $16 on lunch each day. Add that to the $14 they spend on commuting and the $8 spent on parking, and you end up with $51 spent each day just to work from the office.

Meal prepping, on the other hand, can help you cut back on the food-and-coffee front at the very least. Not to mention it can be a lot healthier too! And the more you look after your body in the present, the less likely that you’re going to have to spend thousands of dollars on medical bills in the future.

17. Use a personal finance app

Personal finance apps like You Need a Budget and Quicken: Simplifi can help you set financial goals, stay on track with the help of alerts and notifications, and provide you with money saving tips and advice so you can make better decisions.

18. Create a passive income stream

When you’re looking to become financially secure, having a passive income stream can be a blessing. Some ideas include investing, renting out a room in your house, writing and selling an e-book, and creating an online course.

The idea is to start generating income for which you have to do little to no work so that you’re still able to enjoy enough time for resting, socializing and exercising. After all, as mentioned earlier, investing in your mental and physical health can save you big amounts of money in the future.

19. Turn a hobby into a side hustle

If you’ve got a few hours to spare each week, consider monetizing one of your hobbies or an ability that comes naturally to you. For example, if you’re an amateur violinist, you could start offering classes to locals in your area on the weekends.

By making money out of something you enjoy, you increase your chances of sticking to it — and being good at it!

20. Negotiate a higher salary

This is important, especially where starting salaries are concerned. If you repeatedly fail to negotiate a higher starting salary when changing jobs, you could end up missing out on as much as $750,000 over the course of your career.

Plus, with inflation having been high recently, it’s perfectly reasonable to ask for a 5–10% raise on your current earnings, given that your performance has been consistent and you can back up your case in a meeting with your manager.

21. Reflect on your spending habits

Doing a bit of inner searching can help when you’re looking to adopt better money habits. Consider when you tend to make poor spending choices and why: are you likelier to buy things you don’t need when you’re bored, upset, or feeling the need to impress someone or to fit in?

The faster you identify what leaves you vulnerable to making unhelpful choices, the quicker you can address it.

22. Kick unhealthy habits

According to Tobacco Free Life, the average smoker spends nearly $4,700 a year on cigarettes. Over a 50-year period, that adds up to more than $234,000, nearly as much as it costs to raise a child until the age of 18.

But it’s not just cigarettes. Gambling, drinking, shopping — there are many habits (or, in some cases, addictions) that are as unhealthy as they are costly.

23. Remember that it’s okay to say “no”

Sometimes, we end up agreeing to things we don’t really feel like doing out of fear of missing out or disappointing a loved one. If your goal is to save money, however, it’s okay to say “no” to grabbing (yet another) dinner or going out for drinks. After all, spending time with someone doesn’t have to entail spending heaps of money.

24. Keep your old credit cards

Your credit score gets determined by the length of your credit history. So, the longer you have good credit for, the better as far as potential lenders are concerned.

Even if you aren’t using the credit cards any longer, you will want to keep the accounts active so as not to erase several years’ worth of credit history. A reasonable exception to this rule, of course, is to close any accounts with high annual fees.

25. Start saving for retirement

The sooner you start to plan for a secure financial future and save for retirement, the better. Finance experts recommend investing in both a 401(k) and an individual retirement account (IRA) if possible, prioritizing maxing out your 401(k) match first if your employer offers a match.

A 401(k) match is not referred to as “free money” for nothing, after all!

26. Opt out of sales emails

Sales emails are cleverly designed to create a sense of urgency. Even if you weren’t planning on making a purchase, a tempting offer can make you cave in. (Most of us can relate!)

To minimize the chances of this happening, unsubscribe from brands you’re no longer interested in, and opt out of as many sales emails as possible.

27. Resist lifestyle inflation

Also known as lifestyle creep, lifestyle inflation refers to when you start increasing your expenses to match a pay rise you have received.

In other words, you start earning more money and “upgrade” your lifestyle in such a way that you’re now spending more than before on clothes or entertainment because you can — in essence neutralizing any effect your raise could have had.

28. Find a money buddy

Our social circle influences us on both a conscious and unconscious level — far more than we realize where the latter is concerned.

If you can, surround yourself with people who are less likely to spend impulsively, and who also have the habit of setting goals for themselves. That way, you’ll be likelier to stick to making better decisions.

29. Avoid cosigning loans

Sometimes, friends and family members need our help, and it can be hard to say “no”. But if a bank is requiring a cosigner to give out a loan, then the institution itself doesn’t trust that the borrower will be able to pay. If you do step in, your own credit score can plunge, and it can also put a strain on the relationship.

If you’re a parent whose child is considering their various student loans options, be sure to explore grants, scholarships and federal loans first.

30. Consider cost per use when buying

Asking yourself how many bites, sips or uses you’re going to get out of a food item, fashion item or gadget relative to its price can lead to making better buying decisions.

Let’s say you buy a cheap pair of jeans, thinking it’s a good way to save money. If the quality isn’t good, though, and you only get a limited number of wears out of it before it starts to fall apart, then it’s not a great investment, as you’ll have to buy a more expensive pair down the line.

Final thoughts

From downloading a budget app to reading books on money management and finding an accountability buddy, there are multiple ways you can improve your financial habits. Implementing several of these finance tips at the same time — though without taking it to the other extreme and overwhelming yourself — can be an effective strategy, as you’ll be making progress on multiple fronts at once.

Can you think of any more personal finance tips to share with fellow readers? Let us know in the comments section below!

This article is a complete update of an earlier version originally published on January 10, 2018.