Finances Life Hacks 101

19 Oct 2022

Design by kentoh

In today's economy, having a solid financial foundation is more critical than ever.

Unfortunately, finances can be a very tricky topic. It can be hard to know where to start when it comes to budgeting and saving.

But following simple life hacks can make managing your money much more accessible.

This article will explore some of the most common financial life hacks. Hopefully, by following these tips, you will be able to start to manage your money better and achieve your financial goals. 

Finance 101

Personal finances are the financial decisions made by an individual or family. They include budgeting, saving, and spending.

Personal finance is about managing money and making choices to help you reach your financial goals.

Personal Finance: The Complete Guide - Investopedia

Making smart personal finance decisions can be the difference between a comfortable retirement and a difficult one. It can also mean the difference between being able to afford a home and not.

Personal finance | Life skills - Khan Academy

Personal finance is essential for everyone, but it can be especially challenging for young adults just starting independently.

Why is Finance Not Taught in School?

It is a well-known fact that our education system is not ideal. One of its many problems is that essential life skills, such as financial literacy, are not taught in school.

This is a massive issue because money management is a vital skill everyone should know.

Why Isn't Personal Finance Taught in School: Data | NFEC

There are many reasons why finance is not taught in school. One reason is that it is seen as an "adult" topic and something that kids don't need to worry about.

Another reason is that there is already so much content that needs to be covered in the curriculum, so adding another subject would be too overwhelming.

Whatever the reasons may be, the fact remains that financial illiteracy is a significant problem in our society.

It leads people to make poor decisions with their money and fall into debt. It also contributes to the widening wealth gap between the rich and the poor.

A Brief History of Finance

Finance has evolved to become the complex system it is today. The first recorded financial transactions date back to Mesopotamia in 3000 BC, when people used clay tablets to register loans and repayments.

A brief history of lending through the ages - KOHO

In Ancient Greece, lenders would charge interest on loans, which was considered unethical. This led to the development of moneylending as a profession, further refined in Rome with the introduction of laws and regulations governing lending.

Greece's History of Loans Since 1824 - Greek Reporter

The modern concept of finance began to develop during the Renaissance, as merchants and bankers began to specialize in financial services.

This led to establishing of banks and other financial institutions, which provided a more comprehensive range of services such as loans, investment opportunities, and insurance products.

The Different Types of Finance

There are many different types of personal finance. Some people may think there is only one type, but there are several. Here are three of the different kinds of personal finance:

1. Debt management: This personal finance deals with managing your debt. This can include consolidating your debt, negotiating with creditors, and creating a budget to help you get out of debt.

2. Savings and investment: This type of personal finance deals with saving money for the future and investing it in growing your wealth. This can include setting up a savings account, investing in stocks or mutual funds, and planning retirement.

3. Credit management: This personal finance deals with managing your credit.

Why do most people get into debt?

There are many reasons why people get into debt. Some people spend more money than they earn, while others may have unexpected expenses.

10 Reasons People Go into Debt

Many people also use credit cards to make purchases, which can lead to debt if the cardholder does not pay off the monthly balance.

Debt can be stressful and cause financial problems for many people. Therefore, it is essential to understand why you may be in debt and work on a plan to pay it off.

Life Hacks to Manage your Finances

Letting our finances get away from us in our fast-paced lives is easy. We can find ourselves spending too much, not saving enough, and not investing for our future. That's where life hacks come in.

A life hack is "a tool or technique that makes a task easier." For example, plenty of life hacks can help when managing your finances.

For example, a straightforward way to save money is to create a budget and stick to it. You can also set up automatic transfers from your checking account to your savings account, so
you're never tempted to spend what you're supposed to be saving.

Investing can be another area where life hacks can help. If you're not sure where to start, here are five life hacks that can provide guidance:

1. Make a budget: Making and sticking to a budget can be difficult, but it's worth it in the long run. A budget helps you keep track of your income and expenses so that you can make informed financial decisions.

To make a budget, start by tracking your income and expenses for one month. Then, categorize your expenses into fixed costs (like rent or mortgage payments) and variable costs (like groceries or entertainment).

How to Create a Budget in 6 Simple Steps - Better Money Habits

Once you understand where your money is going, you can start setting aside money for specific purposes.

It's important to review your budget regularly and make adjustments as necessary. If you're consistently spending more than planned, consider cutting back on some of your discretionary expenses. By sticking to a budget, you'll be better able to reach your financial goals.

2. Invest early: Investing early has many benefits that can help set you up for a bright future. For one, investing early gives you a longer time horizon to take advantage of compound interest.

The earlier you start investing, the more time your money has to grow. This can significantly impact you, especially if you start saving early in your career.

How to Start Investing: A Guide for Beginners - NerdWallet

Another benefit of investing early is that it can help you be more disciplined with your finances. When you have money invested, you're less likely to spend it frivolously since you know it's working for you in the long run.

This discipline can carry over into other areas of your financial life, helping you stay on track.

Lastly, investing early can give you peace of mind knowing that you're taking steps to secure your financial future.

3. Live below your means: In today's society, getting caught up in life's materialistic aspects is easy. We are constantly bombarded with ads and social media posts of the latest "must-have" item.

But it's important to remember that we don't need to keep up with the Joneses. Instead, we should focus on living below our means.

One of the best ways to live below your means is to create a budget and stick to it. First, track your income and expenses to know exactly where your money is going. Once you understand your spending habits well, you can make adjustments to ensure you're living within your means.

It can also be helpful to set financial goals, so you have something to work towards.

4. Automate your finances: Wouldn't it be great if you could automate your finances so that you don't have to think about them all the time? Well, you can! By taking a few simple steps, you can set up your finances on autopilot so that you can focus on other things.

Here's how to automate your finances:

1. Set up automatic payments for all of your bills. This way, you'll never have to worry about forgetting a payment or being late on a bill.

2. Automate your savings. Have a certain amount automatically transferred into savings each month to reach your financial goals quicker.

3. Keep track of your spending. There are many ways to do this, but one easy way is to use a budgeting app like Mint or YNAB.

5. Save for retirement: Saving for retirement may seem daunting, but there are simple steps that anyone can take to start putting money away for their future. The first step is to figure out how much money you will need to save to retire comfortably. Of course, this number will be different for everyone, but some online calculators can help you get an estimate.

Once you know how much you need to save, the next step is to start setting aside money each month.

Final Thought

Personal finance is an integral part of life. Knowing how to budget, save, and invest money is essential. Personal finance can help you reach your financial goals, whether they are short-term or long-term.

If you are not good at managing your finances, it can lead to problems. These problems include debt, poor credit, and even homelessness. That is why it is so important to learn about personal finance and ensure that you do everything possible to stay on top of your finances.

Most importantly, you take the time to learn about personal finance and make it a priority in your life.

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I love automation!! Personally it's helped me with building a bank of savings. Even better, it also encourages more discipline because I know I can't change it.
An in-depth knowledge in an article
As always some insightful tips on money management. The ability to budget is critical that will allow you to adopt the other tips in the article. Something so simple can often be complex or overwhelming inhibiting the ability to take that fist step to financial literacy.