We have started a brand new decade, and honestly, it feels weird to say (type) out loud. For whatever reason, “2020” feels way more daunting than when it became “2010.”
No matter how you feel about “the roaring 20’s” and a brand new decade, the new year is a great time to start over with your personal finances. But even if you reset your bank accounts and spending habits – how are you actually going to “get better with money” this year?
The good news is, in just a few minutes each week you can set lifelong habits and get better with your personal money management, bit by bit, over time.
#1 – Adopt a money mantra
One of my core money values is – money is a lifelong journey.
What I mean by this is that we’re constantly having to manage our money, from the time we leave for college to the grave. We’ll make mistakes, and we’ll also learn a lot as we go.
There are lots of other money mantras; I’m not here to tell you what to pick or what makes the most sense for your individual (and very personal) money situation. But, pick a small phrase to repeat to yourself on a daily basis that has a very strong money theme or connection to what you’d like to get.
#2 – Read one of these 18 books
The person who cares most about your money is you. So, make sure that you are as educated as possible. Books are a great way to educate yourself. Go to the finance section of any bookstore and you’ll see a plethora of available options.
But, in case this gets overwhelming, New York Magazine has a fantastic list of 13 personal finance books, hand-picked by experts, that can get you started. I also really enjoy recommending:
- The Financial Diet by Chelsea Fagan and Lauren Ver Hage (please start here if you’ve never read a “money book” in your entire life!)
- Get Money by Kristin Wong
- One Minute Millionaire by Mark Hansen and Robert G. Allen
- The Four Hour Workweek by Timonthy Ferris
- I Will Teach You To Be Rich by Ramit Sethi
#3 – Listen to these 13 Podcasts
I get it – reading may not be your thing. My husband is the most brilliant person I know but he hates picking up a book after a long day of reading patent applications and contracts.
As an alternative, podcasts can be both entertaining and a great source of financial education. Here is a list put together by US News on their 7 favorite podcasts. I also really enjoy:
- The Money Nerds Podcast by Whitney Hansen
- Wander Wealthy by Tess Wicks
- Side Hustle Nation by Nick Loper
- Afford Anything by Paula Pant
- Smart Passive Income by Pat Flynn
- Martinis and Your Money Podcast – by Shannyn McLay of The Financial Gym
#4 – Diversify everything
You know that saying “don't put all your eggs in one basket?”
If you put all of your money into one investing, as Lord Grantham did on Downton Abbey, you could stand to make a lot of money, or lose a lot of money. And if you don't have a lot of money, (or unless you like playing fast and loose with your finances) it makes more sense to spread out your wealth.
Investing isn't really a great avenue to “Get rich quick” (..but what is really?)
Bad things happen to good companies and technology advances can drastically change our lives.
#5 – Vow to Invest and ONLY put money in what you understand
This piece of advice comes from the most renowned investor in the world, Warren Buffet. He only invests in companies that he understands.
This means in order to invest in something, we should/need to be able to understand the business model of the company so we can understand how we're going to MAKE MONEY.
Ford makes cars. Coke sells soda. ALCOA sells aluminum.
Stocks make you money when the company makes money. The price can go up and the company can pay you a dividend, which is actually a portion of their profits. Stocks are part ownership in a company, remember? Since you are literally owning the company, you should understand it’s basic operations.
#5 – Check out one of these 46 new financial tools
If you don't already have a coterie of financial tools at your disposal, make 2020 the year you commit to trying and testing out a handful to see what works. I mean, really, what do you have to lose?
Worst case scenario? You're out a little bit of time.
Best case scenario? You can make your money go further, put some aspects of your finances (like budget tracking and saving) on autopilot. When it works it works and money can even become (dare I say it?) fun.
#6 – Set up an emergency fund
If you read this site, you know I talk about how important it is to set up an emergency fund. And I’m not the only one: you can literally find this “you need an emergency fund” advice on any money blog or financial news site you go to.
And it’s everywhere because it is THAT important. And as important as it is, 3 in 10 Americans have zero emergency savings. According to Bankrate, only 1 in 4 have a “rainy day fund” but not enough to cover three months' worth of expenses.
Emergency funds are important because, without them, you’ll never break the paycheck-to-paycheck cycle.
So, make this the decade you get one, pretty please. Here’s my tutorial on how I built a $1,000 emergency fund in under 45 days without cutting anything from my budget.