If you’re on the internet and social media, most likely you know about Reddit. If not, we have a quick primer for you in our previous article 19 Best Personal Finance Reddit Communities You Should Join. One of the communities we talk about in that article is r/personalfinance.
r/personalfinance is a popular Reddit Personal Finance Community that has over 15 million members. The community members share wisdom and tips with the other readers, and other users comment adding more value or presenting a counter perspective. We have compiled a list of some of the best Reddit personal finance tips found on this subreddit.
Best Reddit Personal Finance Tips on r/PersonalFinance
Let’s dive right into the community’s shared wisdom and go through the 19 best Reddit Personal Finance tips compiled by our team.
1. Take The Better Job Offer
The first tip on our list of Best Reddit Personal Finance Tips is to take the better job offer. Loyalty to an employer is overrated, and the employee should look for their best interests (because the business definitely does).
You are not “family” to your company. If you have an opportunity to better yourself, take it. They will do the same when it comes to cutting ties with you.
People tend to feel a sense of guilt when it comes to leaving a job like they owe them or their coworkers something. That is because America preaches this “family” culture that we are such a strong team all working together. In reality, if they need to close your entire division, they will do it without hesitation. If they can outsource something cheaper, they will do it. You do not owe them anything and if you see a better opportunity for yourself or your family, please take it and make your own financial future.u/Po1sonator
2. Cook Your Food At Home
The second tip on our list of Best Reddit Personal Finance Tips is to cook your food at home more often. A device such as an Instant Pot is not very expensive and allows you to cook multiple items (with the help of cooking blogs and Youtube videos).
Stop Spending Money on Food! — BUY A CROCKPOT
Holy sh#t at the money people spend on food!
And I was the exact same way when I landed my first job out of college. You know what I’m talking about–biscuit and Starbucks on the way to work, lunch out with coworkers and pizza and beer at the local tavern for dinner! Every night! All week! Professional money spender! And more beers and dinners on the weekends! Woohoo!
Wait. Where did all my money go? And how the hell did I gain 40 pounds in six months? If you’re nodding your head you’ve fallen into the brand-new-job-big-salary-eat-out-because-I-can trap. And you have to stop it. It’s killing your bank account, it’s killing your financial freedom and it’s killing you. (Literally–I was on the edge of type 2 diabetes and had hyperglycemia during routine physicals.)
What you know you need to do: STOP EATING OUT
But how??? How do I stop eating out??? Fast food is soooo good! And cooking is soooo hard! Well, first off, not really–you’re just attuned to that garbage ‘food’. You’re going to break free of both these stereotypes and someone has already invented it…..
Crockpot. It’s the crockpot. Crockpot. Crockpot. Maybe you call it a slow cooker, but I’m from Georgia and here it’s a crockpot.
!STOP!–If you do not own a crockpot I highly recommend you go buy one from Amazon and buy the biggest one you can afford!
Get one with a timer that switches to warm after the cook settings: JUST GOOGLE IT CAUSE MODS DONT LIKE LINKS!
BOOM! $39 investment. We’re going to make that back in…. three days. Are you ready? We’re going to make enough food for dinner AND left overs for lunch.
I’m going to give you some of my super-secret-I-eat-this-every-week-crockpot-meals that are delicious, cheap, filling and easy. Yes. The crockpot makes all of those possible.u/bplturner
3. When Negotiating For Salary, Don’t Speak First
The third tip on our list of Best Reddit Personal Finance Tips is not to be the first to speak your number when negotiating your salary offer in a new job. You never know when your future employer has a much higher budget than you planned to ask for!
Quick Reminder to Not Give Away Your Salary Requirement in a Job Interview
I know I’ve read this here before but had a real-life experience with it yesterday that I thought I’d share.
Going into the interview I was hoping/expecting that the range for the salary would be similar to where I am now. When the company recruiter asked me what my target salary was, I responded by asking, “What is the range for the position?” to which they responded with their target, which was $30k more than I was expecting/am making now. Essentially, if I would have given the range I was hoping for (even if it was +$10k more than I am making it now) I still would have sold myself short.
Granted, this is just an interview and not an offer- but I’m happy knowing that I didn’t lowball myself from the getgo.u/lltrs186
4. Re-eavaluate Your Perception of ‘Savings’ During a Sale
The fourth tip on our list of Best Reddit Personal Finance Tips is to not get carried away and overspend to take advantage of the ‘savings’ during the promotional sale events. If you are saving on a purchase of an item you don’t really need, then effectively you are wasting money!
For everyone shopping on Amazon’s Prime Day: “savings” from sales aren’t savings if you weren’t already planning on buying the item.
This is a trap a lot of people fall into (myself included): just because it’s a “good deal” doesn’t mean you “saved” money by buying it, it’s still money that you spent!
This might be obvious to most people but it’s a good reminder that pops up on here occasionally and has stopped me from making some dumb purchases on more than one occasion. Hopefully it helps someone on this Prime Day.u/IlCaneEUnaMucca
5. Do Not Hesitate To Ask For A Raise
The fifth tip on our list of Best Reddit Personal Finance Tips is to understand your value at your workplace and ask for a raise if you feel you deserve it. Employers want to retain good employees and it is a tiresome and expensive process for them to replace an existing good employee. If you believe you deserve a raise, just ask for it!
In most cases, it will cost your employer far more to replace you than it would to give you a raise. So ask firmly.
The cost of recruiting, onboarding/training, etc often exceeds the cost of paying an already established employee more. Just remember that next time you talk yourself out of asking for a raise.
Edit: Ok, so I’ve only been responding to push notifications and didn’t realize this is the top post on Personal Finance. Wowsers.
Also all of you have provided so many good comments and insights I failed to point out. What a sub you have here.
Edit: My phone is so old that trying to turn off the push notifications is causing it to freeze. Front page life is hard. I’m still in disbelief this made the front page. More importantly the collective participation has been amazing. From useful to funny, you guys killed it. Thanks to employers who weren’t afraid to offer their own food for thought. It made for a more valuable thread.Reddit User Account Could Not Be Found
6. Commit To A Good Financial Habit, Start With Eating Out Less Often
The sixth tip on our list of Best Reddit Personal Finance Tips is to commit to a good financial habit, start with cutting down on eating outside, reap the benefits, and move on to more goals. Taking the first step may be difficult, but when you see the benefits, it supercharges you to do more and get financially healthier!
Last month, I spent $770 eating out. This month, I’ve spent $42. This is only the first of many financial self control habits I’m trying to get myself into!
In my credit card’s April-May billing cycle, I spent $770 eating out as one person. I decided to track my spending in this area by putting all my meals I’ve been eating out on a credit card used only for that purpose. I looked at the end of the month and was absolutely dumbfounded at the amount of money I was spending eating out. I thought it might be $300ish dollars!
Anyway, I paid off the credit card (angrily) and made a vow I would eat at home at every possible meal I could for the foreseeable future. I’ve spent about $70 a week on groceries, (was about $50/week prior) so plus $42, I went from and $1000/mo food expense (how the ever living hell was I making ends meet with this?) to $322/mo. And the kicker is I still have tons of food leftover at the end of the week. The only two meals I bought this month were a BK chicken sandwich while I was on the road and a birthday meal for someone.
It feels awesome to have a 70% reduction in spending in this area just due to self control.
I’m planning on using this self control in other areas. Next one is booze and cigarettes. Then my sh#tty habit of mobile game micro transactions.
Sometimes I don’t know how I’ve made it this far without being broke.Reddit User Account Could Not Be Found
7. Be Careful With Your Personal Information in Public
The seventh tip on our list of Best Reddit Personal Finance Tips is to be careful with your personal information such as Zip code, credit card details, social security number, date of birth, etc. at all times. Even if you are talking to a customer care executive on the phone, be mindful of your surroundings. Do not divulge these details on a phone call when you are in a public place. Someone else might listen in and use the details to access your funds or commit identity fraud.
Be careful what you say in public
My wife and I were at Panera eating breakfast and we noticed a lady be hind us talking on the phone very loudly. We couldn’t help over hearing her talk about a bill not being paid. We were a little annoyed but not a big deal because it was a public restaurant. We were not trying to listen but were shocked when she announced that she was about to read her card number. She then gave the card’s expiration date, security code, and her zip code. We clearly heard and if we were planning on stealing it she gave us plenty of notice to get a pen.
Don’t read your personal information in public like this. You never know who is listening and who is writing stuff down.u/Bonsacked
8. While Investing, A Low Cost Broad Market Index Fund Might Be Your Best Bet
The eighth tip on our list of Best Reddit Personal Finance Tips is to take a closer look at where you are investing and how much fees you are paying for those investments. A low-cost index fund is a simple and generally a better-performing investment option.
Warren Buffet just won his ten-year bet about index funds outperforming hedge funds
“Over the years, I’ve often been asked for investment advice, and in the process of answering I’ve learned a good deal about human behavior. My regular recommendation has been a low-cost S&P 500 index fund. To their credit, my friends who possess only modest means have usually followed my suggestion.
I believe, however, that none of the mega-rich individuals, institutions or pension funds has followed that same advice when I’ve given it to them. Instead, these investors politely thank me for my thoughts and depart to listen to the siren song of a high-fee manager or, in the case of many institutions, to seek out another breed of hyper-helper called a consultant.”
“Over the decade-long bet, the index fund returned 7.1% compounded annually. Protégé funds returned an average of only 2.2% net of all fees. Buffett had made his point. When looking at returns, fees are often ignored or obscured. And when that money is not re-invested each year with the principal, it can almost never overtake an index fund if you take the long view.”u/Swampland_Flowers
9. Have a Long Term Investment Horizon, Especially With Retirment Accounts
The ninth tip on our list of Best Reddit Personal Finance Tips is to not worry about the short-term market volatility for your long-term financial goals. Retirement accounts have funds invested for the long term, and over the long term, the short-term volatility will not even matter.
Don’t look at your 401k balances today; it has no impact on your long-term investment outlook
I’m sure this will get buried among the many posts today, but it bears repeating: short-term fluctuations in the stock market are short-term. The fact that the market is down right now does not affect your long-term investment outlook, as stocks are a long-term game. If you sell now, you will lose out on the rebound, just as my parents did during the financial crisis of 2008/2009. You do not want to sell now unless you are selling as part of your financial planning objectives that you have identified long before the whole Coronavirus panic hit.
Edit: this did not, in fact, get buried among the other posts today. RIP my inbox
Edit2: to answer some common questions:
“Is now a good time to invest?” – that’s a weighted question, and not one I can answer directly. There are many factors to determine whether or not it’s a good time to invest. Please refer to the wiki for investing resources to see if now is a good time for you to invest.
“Should I be reallocating from stocks to bonds now?” – as mentioned above, reallocations should be evaluated as part of your overall retirement strategy. A reallocation is basically selling some investments and buying others in place of those you sold; as such, it is generally unwise to reallocate in response to a single event and should really be done as part of your strategy towards retirement (e.g. reallocating from stocks to bonds as you get older to limit risk exposure).
“Will xxxxx affect me?” – I don’t know. Although I am a financial professional, if you have any questions relating to your particular circumstances, you should seek out a financial professional outside of Reddit or refer to the wiki in this sub for specific information.
“What if you’re close to retirement? Should I sell?” – if you’re close to retirement, the general financial planning consensus is that you should not have a significant percentage of your wealth in equities. Example allocations would be anywhere from 80/20 or 90/10 bonds to equities. If you have any more than 20% equities and are close to retirement, yes you should probably think about reallocating to bonds, but not because of this recent stock market panic. Again, please consider speaking to a financial professional or using the sub’s wiki for additional info.u/mart1373
10. Be Comfortable With Your Financial Growth Pace
The tenth tip on our list of Best Reddit Personal Finance Tips is to not stress over your speed of achieving financial goals. The key message from this post is to have a balanced perspective on life and financial journey.
Your parents took decades to furnish their house
If you’re just starting out, remember that it took your parents decades to collect all the furniture, decorations, appliances, etc you are used to having around. It’s easy to forget this because you started remembering things a long while after they started out together, so it feels like that’s how a house should always be.
It’s impossible for most people starting out to get to that level of settled in without burying themselves in debt. So relax, take your time, and embrace the emptiness! You’ll enjoy the house much more if you’re not worried about how to pay for everything all the time.u/fat_tire_fanatic
11. Keep A Tab On Your Expenses, Even More So On The Recurring Ones
The eleventh tip on our list of Best Reddit Personal Finance Tips is to keep evaluating your cash flow by checking your bank account and credit card statements. There might be some recurring expenses for things that you don’t even use (or know!) anymore. A recurring charge of $30 per month may not seem like a huge amount, but over a period of 10 years it adds up to $30 * 12 * 10 = $3,600. That’s throwing away a lot of money on something that doesn’t add any value to your life!
My Dad just figured out he’s been paying $30/month for AOL dial-up internet he hasn’t used for at least the last ten years.
The bill was being autopaid on his credit card. I think he was aware he was paying it (I’m assuming), but not sure that he really knew why. Or he forgot about it as I don’t believe he receives physical bills in the mail and he autopays everything through his card.
He’s actually super smart financially. Budgets his money, is on track to retire next year (he’s 56 now), uses a credit card for all his spending for points, and owns approximately 14 rental properties.
I don’t think he’s used dial up for at least the last 10….15 years? Anything he can do other than calling and cancelling now?
EDIT: AOL refused to refund anything as I figured, and also tried to keep on selling their services by dropping the price when he said to cancel.
I got a little clarification on the not checking his statement thing: He doesn’t really check his statements. Or I guess he does, but not in great detail. My dad logs literally everything in Quicken, so when he pays his monthly credit card bill (to which he charges pretty much everything to) as long as the two (payment due and what he shows for expenses in Quicken) are close he doesn’t really think twice. He said they’ve always been pretty close when he compares the two so he didn’t give it second thought.u/MPTPWZ1026
12. Always Ask For Itemized Proof Of Any Debt You Owe
The twelfth tip on our list of Best Reddit Personal Finance Tips is to demand proof of any debts to you. This is true for any debt collection calls (or even medical insurance bills) you might receive. Read the full story of the Reddit user below.
A story of how I just got out of paying a $1500 bill, why you should NEVER blindly trust a Debt collection agency, and ALWAYS request proof of a Debt owed. 😂😂😂
I got a call out of the blue a little over a month ago from a debt collection agency, saying I owed almost $1500 from an ambulance ride I took because of me being involved in a car accident OVER 2 YEARS AGO.
While on the phone with the debt collector, I looked up debt collection laws, and after a couple minutes of research decided to request a Debt Validation Letter, which they are legally required to send me within 5 days of initial contact.
Long story short, never received it. Instead they sent me a “Verification of Balance” letter. Which immediately told me “holy sh#t, they don’t have proof I owe the debt. Which means I’m not legally required to pay this sh#t.”
Today, right before the 30 day cutoff, I receive another call from them attempting to collect the debt. I request to speak with a supervisor. After going back and forth with him for a few minutes about why they haven’t sent me a Debt Validation Letter (WHICH THEY’RE REQUIRED TO DO UNDER THE LAW), he transfers me to his supervisor.
This is where it gets fun. I’m now going back and forth with him. After a few minutes he puts me on hold. Roughly 3 minutes later he comes back on and says “Sir, after reviewing your file, it doesn’t appear we have the documentation required, pertaining to the original bill, in order to send you a Debt Validation Letter. However I am showing you have a balance owed here in your file of $1,410.54. Would you like to pay a portion of it now, set up a payment plan, or…?”
This dumbass just admitted to me they don’t have proof of me owing the debt. Which means im not legally required to pay it. It’s null and void.
I tell him this, he gets flustered, and after some more back and forth, basically tells me to have a nice day and hangs up the phone.
I’m going to still send a letter requesting a copy of the debt validation letter via certified mail with a return receipt requested, to cover my a$$. And when they don’t, because they aren’t able to, it’s a done deal.
If they try to put it on my credit report, I just contact the credit agencies with proof of me asking for the debt validation letter and never receiving it, and it gets removed from my credit report.
Moral of the story, ALWAYS ask for documentation. Don’t let debt collectors scaring you into paying a Debt you may not be required to pay.Reddit User Account Could Not Be Found
13. Get A Credit Card, And Use It Responsibly, For Its Benefits
The thirteenth tip on our list of Best Reddit Personal Finance Tips is to sign up for a credit card, and make use of credit cards responsibly to reap all the benefits that come with them such as building your credit history, strong credit score, making secure payments,
Seriously, get and use a credit card
I’ve encountered many people, both in my personal life and online, that insist upon using a debit card for their purchases, instead of using a credit card — either because they don’t yet have one, or because they have some fear of using a credit card. There are literally no cons to using a credit card if, and here’s the catch, you’re responsible. That’s all. There are so many pros built in to using a credit card over a debit card. Here are a few:
It’s safer! When you use a debit card to make a purchase, you’re essentially handing the merchant direct access to your bank account. Should the waitress at the restaurant you’re eating at write down your debit card number or should your favorite grocery store experience a breach, that’s direct access to your account and your money. Yeah you can file a fraud dispute with your bank and get your money back eventually, but in the meantime, that money is poof, gone.
Compare this to using a credit card – when you do this, you’re using the creditor’s money to make your purchase and you don’t have to pay it until your statement closes. You have a 30 day window in between payments to make sure that all purchases on your card are yours. And if there’s a purchase you didn’t make, that’s not your money missing.
It builds your credit. When you use a credit card RESPONSIBLY, it will build your credit over time. Which if you’re young may not be a big deal to you, but eventually you might want to buy a car or house, and unless you have a lump sum sitting in cash, you’re going to need to finance it. Low interest loans are granted to people with good credit scores, meaning you pay the bank less in interest to use their money. Compared to someone with poor credit who will either get a high interest loan or no loan at all.
The caveat here is that you never miss a payment. EVER. A good rule of thumb is to only spend on credit what you can pay cash for at the same time. You should never buy something on credit that you couldn’t otherwise afford at that same point in time with your debit card.
Purchase protection. A lot of major credit card companies (like American Express and Discover) offer a suite of purchase protection features. This is especially useful when you buy big ticket items (like a flat screen TV or laptop, for example), because it adds a layer of protection to you, the consumer. Some features are:
Accidental damage coverage – if you break your device in the first couple months of owning it, you can get it replaced by your credit card company.
Better price guarantee – just bought an expensive item but found a better deal somewhere else? The credit card company will cover the difference.
Theft protection – if your item is stolen within the first few months of owning it, your credit card company will replace it for you
Extended warranty – all my credit cards offer 100% of the manufacturer’s original warranty on any purchase. 1 year manufacturer’s warranty on my iPhone becomes a 2 year warranty including the extra year of coverage from the credit card company.
And many more.
The credit card company will reward you for using it. Most credit cards offer points or cash back that you earn every time you swipe your card on things you’d already be buying anyways. Same applies for paying bills. So by using a credit card, you can get a percentage of cash back or points that you can redeem later or put towards a purchase or vacation/trip.
Some tips on using a credit card:
NEVER miss a payment. EVER. You will destroy your credit with as little as one missed payment.
Only buy on a credit card what you can afford to buy on a debit card at the same point in time. This is how people end up with $1,000s in credit card debt – because they use their card irresponsibly and then can’t afford the payments. Being responsible is the only thing it takes to use a credit card.
Pay in full – only suckers make the minimum payments. When you only pay the minimum each month, the credit card companies will charge you interest for using their money longer than the 30 day statement period. Whatever you heard about making the minimum payment to boost your credit score is false. Paying your card off in full achieves the same score improvements.
Hopefully this post is enough to convince you to make the move to responsible spending with a credit card. They’re awesome financial tools to build your credit and build your future as a responsible adult, and all it takes is responsibility and self control now.u/idealdreams
14. Before Leasing A Car, Understand How Leasing Works
The fourteenth tip on our list of Best Reddit Personal Finance Tips is to understand how leasing works and how to compute the full cost rather than just focus on the monthly payments. If you solely talk about the monthly payments, the car dealer can essentially lower your monthly payments by extending the tenure of your lease or loan – making you pay a lot more money over a longer period.
Read the comprehensive explanation of leasing on the r/personalfinance thread by u/tomatuvm
15. Ask Yourself If You Really Need A New Car
The fifteenth tip on our list of Best Reddit Personal Finance Tips is to be honest with yourself whether you need to purchase a new car (or buy any high ticket item). Understand the fallacies and see if there’s a cheaper alternative available that fixes your problems or pain points. “Status Symbol” may not be the pain point worthy of a $20,000 solution.
As a former car salesman, these are the common fallacies that people used to justify purchasing a new car.
There are 4 basic reasons people came in to purchase a car.
Current car is messy: I sold a ton of cars to people who’s current car they hated simply because it was dirty. Some elbow grease or paying for a good detail could have saved them $20k.
Wanted new technology: I sold $50k cars weekly because of Bluetooth capabilities. No matter how old your car is, you can add this to any existing car for around $200. Cheaper if your DIY.
Wanted it as a status symbol: Cars always look amazing at a dealership where they are waxed, clean, and smothered in Armor All and tire shine. In two weeks the difference between your old car and your new car will probably be negligible. The whole status symbol thing really only lasts a few weeks. Most of your peers don’t know the difference between a new and much older models if they are both dirty.
Mechanical problems: This is the only reason I would advise anyone to purchase a car. Eventually the repairs get to the point where its more expensive to keep it than to move on. If you are buying a car for anyother reason than this… don’t!
EDIT: Reading the comments, I figured I should address some general thoughts.
Safety isn’t something I meantioned before, but probably should have. Regardless of how reliable a car is, if you are driving something with a rusted frame and 20 year old safety features its time to upgrade (assuming you can afford it). My wife and kids drive in a 5 star crash rating car with every modern safety feature. We have chose to be stingy in other places in our finances so we can afford to have a car with these types of features. Its worth a little bit of money to us to know our family is safe and to be able to see when backing out of the driveway.
That moment when repairs out way the cost of upgrading is tricky. I have been burned several times by spending money on repairs that I thought were a good investment only to have more and more repairs pile up. I wish I knew some perfect rule for this. I don’t. I have repaired cars I shouldn’t have and I have gotten rid of cars that probably would have been great with minor investments.u/Cravati
16. It Doesn’t Hurt To Explain Your Situation and Ask For Special Consideration For Your Prescription Bills
The sixteenth tip on our list of Best Reddit Personal Finance Tips is to realize the power of communication and explain your situation to even the big pharma companies. If for some reason you are facing financial difficulties, the medicine manufacturer may make an exception or help you out somehow so that you can continue with your medications. After all, there’s a human at the other end of the line, and they may even go out of their way to help you!
If you have an expensive prescription, contact the manufacturer and tell them you can’t afford it.
Bristol Myers just gave me a copay card that changed my monthly medication from $500 a month to $10. It lasts 2 years and they will renew it then with one phone call. Sorry if this is a repost, but this was a literal lifesaver for me.
EDIT: In my case income level was never asked. Also, the company benefits by hoping people with max out their maximum-out-of-pocket. This discount only applies to what the insurance company won’t pay.
Shout out to hot Wendi for telling me!u/chainsawx72
17. If You Don’t Use It, Sell It So That Someone Else Can Use It
The seventeenth tip on our list of Best Reddit Personal Finance Tips is to sell some items that are just lying around in your house that you don’t need or use anymore. You can sell these items on the Facebook marketplace or some other app. The monetary value of these items may or may not be a lot, but you’ll have more space in your house and someone else might derive value and joy from those items!
Sell the things that aren’t bringing value to you anymore. 5-$20 per item may not seem worth the effort but it adds up. We’ve focused on this at our house and have made a couple hundred bucks now.
It also makes you feel good knowing that the item is now bringing value to someone else’s life instead of sitting there collecting dustu/oldschoolawesome
18. Recession Is Normal in Any Economy. Freaking Out About It Will Not Help You, Preparing For You Will!
The eighteenth tip on our list of Best Reddit Personal Finance Tips is to stay prepared for any financial crisis, but understand that constantly freaking about it will take you nowhere. Make sure the emergency fund is stocked up, keep maintaining healthy financial habits, and live with tons of mental peace. If you are well prepared and have some extra cash on hand, a recession (or stock market crash, which tends to overlap with a recession) might be a great investment opportunity for you.
Stop freaking out about “the recession”
Hi Personal Finance!
I see an awful lot of threads here about people wondering how on earth they’ll possibly survive this horrible doomsday recession that is just absolutely going to happen any day now. Here’s some tips:
There is not a gigantic country-destroying recession that is coming to ruin your life in the coming weeks. Talking heads have been predicting one ever since the last recession. The current news cycle is little more than fear-mongering (full disclosure: I used to be a journalist). IF the current indicators that people are looking at end up holding true, it’s still well over a year before things are “expected” to go south. Plenty of time to shore up those savings accounts, make sure you’re budgeting properly (see below), etc.
The last recession was called the Great Recession for a reason – it was a harder-hitting one than those that came before. And since it was largely based on a housing crisis, it felt even worse because people were losing their homes due to ridiculous mortgages that they never should have been offered, or agreed to, in the first place. Which leads me to…
Just be smart. Are you living within your means now? Great! Make sure your emergency fund is in good shape, and continue about your business. If you’re overspending, take a look at your budget and see what you can cut out of it. This is something you should be doing regardless of how the markets look. Find a cheaper cell phone plan, ditch that $100 / mo cable bill, subscribe to a slower internet package, go out to eat less often, etc.
“What about my stocks? Should I sell all my stocks?” NO!!! Do. Not. Sell. Your. Stocks. The only exception here is if you really are completely and utterly broke otherwise and absolutely need the money. Look, I invested almost all of my life savings in late September last year. And then watched a LOT of it go away – on paper. But guess what? It’s all back already, and then some – because I didn’t panic sell. In fact, the best thing you can do in a recession is buy more stock! A bad market just means that stocks are on sale. Who doesn’t love a discount? Again, I wouldn’t advise buying unless you have the budget to do so.
So there you have it, friends. The world isn’t ending. Be smart with your money, use some common sense, and be prepared to make some small sacrifices in the short term if a recession hits.u/AlwaysTheNoob
19. Maintain a Balance Between Fun in Life and Financial Discipline For Future Life Goals
The nineteenth tip on our list of Best Reddit Personal Finance Tips is to be honest with yourself about your financial goals and life goals. If carefully planned, you can hit all your financial goals while having fun at the same time. Balance is the key to a happy and financially secure life. The narrative you tell yourself helps shape your actions and habits – so don’t gaslight yourself into believing you don’t need to plan for the future at all (or vice versa).
Saying: “I don’t want to save, I want to live life and have fun while I’m young” is just an excuse that makes you feel better about your bad spending habits.
I see this over and over in my family and friends and ironically in r/personalfinance. ” I want to live my life, not save every penny”, that sort of thing.
It is possible to save while still doings fun things, eating nice meals and traveling. When someone makes it a this-or-that situation I think they are making excuses for poor spending habits or budgeting. Sometimes deferring gratification leads to the ability to have MORE fun and freedom once you’ve established yourself financially. I’m NOT talking about waiting till retirement BTW, im talking about getting a budget setup, getting some investments going, getting some interest coming in, paying off debt that costs you interest etc. Interest is money you could be using for fun, that you instead are paying to some huge corporation. What I’m describing isn’t some kind of punishment, it’s a way to be more intentional and to always make sure the things you are spending on are helping you attain your goals and add lasting fulfillment to your life. It’s the ability to buy things at their actual cost because you can get a decent interest rate.
I don’t make insane amounts of money, but I’m careful and try not to buy things I don’t need. I always ask how many times a year I will use something before buying it. I think about how small amounts add up to be a big amount over time. My family mocks me saying things like ” he still has his first $1.” Basically saying I’m cheap. They all buy whatever they want when they want it. They are in debt, stuck in life and unfulfilled by the very items keeping them there. Once you get on the roller coaster of spending on credit cards for instant gratification, it can be VERY hard to get off.
I’m not saying this in a judgemental way, I’ve just seen so many people I care about struggle financially because of this mindset. I’ve seen it limit their ability to see the world and follow their dreams. Seeing it being perpetuated in a place designed to help people get their sh#t together is kind of brutal to watch.
If you are a young person coming here for advice, this is the best advice I can give: Briefly defer your gratification. Half the time the thing you “must have” seems pointless if you just sit on it for a week. Avoid impulses and focus on experiences and items that will last and wear well over time. Once you have established a solid financial foundation, your ability to go places and do things will quickly outpace the friends and family around you that are focused on attaining every minor impulse and paying off the associated debts.
TL:DR You can be financially together and still have a fun!u/hungryfreediver
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