It’s a humble strength that’s present when you have a clue where your money’s headed. Not the overzealous extreme couponing, super austere “don’t get lattes” type of personal finance. I mean the actual personal finance, the type that provides you with some wiggle room, some options, and some liberty.
I never had this belief. In fact, when I first started coaching students on budgeting, they would present me with spreadsheets full of numbers but lacking in sense. That’s when it struck me: money stability isn’t a matter of perfection. It’s a matter of making choices.
Please allow me to demonstrate how I go on now.
Why One Salary Isn’t Enough Anymore
Even five years ago, I might’ve told someone to just get a good job, save faithfully, and build wealth over the years. That still works for some. Times have changed, however. Higher costs, salaries that don’t keep up, and an unpredictable economy have made it hard to be able to rely on one source of income. Many now turn to digital avenues, some even buy Instagram followers to improve your earnings to diversify their income and keep up with the cost of living.
What’s the way forward?
Diversifying one’s streams of income. Not that one must be running three businesses and a full-time job. But making something on the side? That changes lives. My student started by making basic Canva templates and now earns more doing that than she does with her 9-5.
Ditch the Old-Fashioned Budgeting Methods
I’ve attempted every budgeting technique in the book. Zero-based, envelope, pretty-graph software, you’ll never guess. What finally did work for me and for my students? Something extremely, ridiculously, mind-bogglingly simple: the rule of three.
Divide your income into
- Basics
- Celebrate
- You
It’s simple to recall and allows guilt-free spending. Yes, I believe you ought to indulge in what brings you joy, if only it doesn’t come at the expense of your financial health.
I had a client previously who wouldn’t allow herself to spend money on books that she enjoyed because they were considered indulgent. However, she would indulge in $80 worth of delivery stress-snacking each week. Once we shifted the way she spent money into conscious indulgence, she began saving more unwittingly.
Saving Is Developing a System
If you wait for the enthusiasm level to hit before you start saving, the wait will never occur. It’s the same with so many: they have great intentions but not automation. My recommendation is always the same: automate your savings as a bill. Get it paid the instant your income hits your account.
Start with a start. $10. $25. Not how much, but the routine.
High-interest savings will be a perk, but a plain one will suffice to get started. The goal is to make the savings dull but routine. If a motivator is needed, get the accounts named. “Emergency Fund” won’t cut it. “Screw You Fund”? Much more productive.
Beginner’s Investment Tips
I invested late. Regionally, for the most part. Mostly out of fear. It felt as if this big universe in which if you took one misstep, you would lose your fortune. But after simplifying and investing in index funds, things changed.
If you’re a beginner, stay away from the hype stocks. Begin with ETFs or mutual funds. I’ve watched individuals investing in meme stocks and in cryptocurrencies when they have no idea what they are doing, and it never appears to end well. I teach the students: investing is long-term wealth. If it’s done as a bet, then that’s the wrong way.
The Debt Trap
Debt can be overwhelming. I remember working with a student who felt as though they were suffocated by credit card debt and by payday loans. Every monthly payment felt like a drop in the bucket. What rescued them, and thousands more with whom I’ve worked is the avalanche technique. Pay the debt with the highest interest first and the minimums on the other ones.
But outside the procedure, what they needed was a mindset adjustment. Shame stops people in their tracks. Once they realized that debt was neutral, merely a figure, a figure not representing their self-worth as people, that they were unencumbered.
Also watch your interest rates closely. Many times, negotiating and/or refinancing will decrease what you owe significantly.
Making Money While You Sleep
Passive income seems too good to be true until suddenly it isn’t. By this, I don’t necessarily mean a pyramid scheme, selling some items you’ve never used. I mean something in your skill set.
Rental income, dividend-paying investments, even digital products like e-books or tutorials can produce income as you are engaged in some other activity.
One of my past students borrowed my past class notes and compiled a study guide for freshmen. That PDF now makes me money each month with no maintenance.
Con Artists Adapt More Rapidly Than Savings
I don’t want to say it, but too often have I seen people fall prey to investment scams on the promise of “opportunities.” If it’s offering a 10x return with no risk, it’s a scam. Period.
A good rule: if you have no idea how it works, don’t invest. It could be a foreign exchange program, a cryptocurrency, some fancy-schmancy app. Get to the bottom. And never allow another human being to hold your money, even if they say they’re “managing your portfolio.”
If you’re unsure about a platform or you’re struggling to even see your own comments on Instagram, that’s your red flag to investigate further, scams often start with confusion and end with regret.
It’s Not Today That Matters
Your economic plan should not look one month into the future. Plan five, ten, even twenty years forward. Begin with retirement savings. A Roth IRA or employer-sponsored 401(k) will be enough as a start.
I have witnessed individuals in their 20s think retirement savings are for “later on.” Fact: later comes quickly. Even the little that one saves today can be multiplied over time with the power of compound interest. And insurance. Medical, rental, even the life insurance if other people’s well-being depend on you, it’s all more significant than you might think.
FAQs
What’s the easiest way to start managing my personal finances?
Start by tracking where your money goes. You can’t fix what you don’t see. Apps like YNAB or even a basic spreadsheet can help you spot patterns and make adjustments.
Is it really worth having multiple income streams if I already have a full-time job?
Yes. Even a small side hustle can provide financial cushioning. It’s not about working endlessly, but about building options.
Do I need a financial advisor to get started with investing?
Not necessarily. If you’re just beginning, a robo-advisor or DIY approach using index funds is often enough. Advisors can help later when your assets grow or your financial situation gets more complex.
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