Five Financial No-Brainers
Much of personal finance is just that — personal. And as such, tips that work for one group of individuals often don’t work for another. However, there are a handful of money management suggestions that are beneficial to nearly everyone. In fact, they’re so good that they can be listed as financial no-brainers. Here are five:
Financial No-Brainer #1: Spend less than you earn
Reason: If you don’t, everything else you do financially is for naught. (And if you think this is “common sense, think again. 70% of Americans are close to if not completely ignoring this advice.)
Key step: Pretty simple: income must be greater than expenses — and the bigger the gap, the better.
Financial No-Brainer #2: Grow your career
Reason: Your career is your most valuable financial asset. The good news is that what you do with it can make it even more valuable. If you make the right moves in growing your career, the difference will be millions of dollars added to your income over your working lifetime.
Key step: Work so you deserve raises by setting expectations and then over-performing against them.
Financial No-Brainer #3: Take the full employer match on a 401k
Reason: What other investment guarantees you a 50% to 100% (depending on your plan) automatic return on your money immediately after you invest? We thought so.
Key steps: Sign up early, make investments automatic, and invest appropriately for your age and financial goals.
Financial No-Brainer #4: Invest early
Reason: Investing early is the best way to maximize your investment return. Added plus: it’s totally within our control.
Key step: Start yesterday. Today is ok too.
Financial No-Brainer #5: Pay off credit card debt
Reason: Not even great investments regularly return the 18% to 25% you’ll save by paying off your credit cards. Plus, these returns are GUARANTEED!!!!
Key step: Set up a debt snowball to get rid of all your consumer debt.
How are those for financial no-brainers? Did we miss any?