7 Personal Finance Tips You Need to Know About
April is Financial Literacy Month, so let’s talk about personal finance!
Growing up in an immigrant household, I never heard my parents use words like inversiones or valor neto. Sure, my parents lectured me about the importance of saving and not spending so much money on clothes, but that was the extent of our money conversations. I had to learn about those types of personal finance terms on my own and let me tell you, the learning curve was steep.
If you are a first or second-generation American, most likely, you had a similar experience to mine. You not only have had to learn about personal finance and generational wealth, but you’ve also been tasked to make sure your family knows about it too.
Here are 7 personal finance tips that have helped me on my financial journey. I hope you find them helpful.
1. Don’t compare your financial situation to anybody else’s. Easier said than done, right? It’s natural to feel a certain way when you see someone who is seemingly in a better financial situation than you. Remember, you will never know the entire story. Everyone’s situation is different, and it’s better to focus on your own journey instead of comparing yourself to others.
2. Identify your values and priorities. The way you spend your money is a direct reflection of what you value in life, so use your values to make financial decisions that make sense to you. For example, I sold my car five years ago and at this moment in my life, owning a vehicle is not one of my priorities. Many people don’t understand my decision, but it works for me. I may own one in the future, but my priority is to save and invest right now. Always keep your values and priorities in mind when thinking about personal finance.
3. Automate your savings and investments. You have enough on your to-do list, amiga. Automating your savings and investments will be the best financial decision you’ll ever make. I learned this strategy when I read the Automatic Millionaire by David Bach, and it was life-changing. You can set this up in various ways depending on your accounts. If you want to simplify your finances and not think about your money every day, this is the strategy for you!
4. Find ways to feel rich every day. I don’t remember if I read this in a book, blog, or Cosmo, but I came across this piece of advice somewhere along my financial journey. In my early thirties, I rented a small studio a block away from the beach and I felt like a retiree every single weekend. Never in a million years did I think I would ever live so close to a beach, but I did it! I was living frugally, but I felt like a million bucks since I lived right next to the ocean.
5. Talk about money with people you trust. I know what you’re thinking: talking about money can be awkward with a capital A. Conversations about dinero can bring up so many emotions, good and bad. Luckily for you, people are opening up about their finances more than ever before! If you’re uncomfortable having money conversations, start by opening up to people you trust and admire. Think of it as a learning opportunity. You’ll never know who you can help by sharing your personal experiences.
6. Track your money habits. Notice how I didn’t use the B word. This might be controversial, but not everyone needs a highly detailed budget. What is important is that you track your money habits. Do you spend when you’re stressed? Do you have an “I deserve it” mentality? Notice any patterns? Understanding your money habits will help you make better decisions on your journey to financial independence.
7. Don’t get discouraged. As a daughter of immigrants, there have been many times (especially in my twenties!) I’ve felt frustrated and hopeless with my financial situation. It’s easy to get discouraged if you are drowning in debt or if you’re saving for a down payment or if you are severely underpaid. The road to financial independence won’t be easy, but with dedication, commitment, and a whole lot of ganas, you’ll get there!
What are some of your personal finance tips that have helped you? Let me know in the comments below!