Tips to Help you Hack Your Finances

It can be super hard starting out in this world as a young adult, or having to start over later in life. I want to share a couple tips with you that have helped me, though. 

Credit Cards

First of all: credit cards. They can be great for you or terrible depending on how you use them. What you shouldn't do is treat credit cards like you have extra cash to spend on things you don't truly need. What is good is to get a credit card and use it to get only the things you normally would anyway, like gas and groceries. If you know how to live below your means, you can get a lot of benefit out of having a credit card. 

The first step of using a credit card to help you get ahead is to pay what's on the credit card off each month. If you do that, you will never pay interest. I recommend setting it up on autopay for the full amount so you don't accidentally forget and have to pay interest. (Extra tip: make sure when you apply for a credit card that you get one with no annual fee so that having a credit card truly doesn't cost you anything extra). Having a credit card will allow you to build your credit score, allowing you to have lower interest rates when you take out loans for things like cars or a house in the future. 

In addition to this, you can get credit cards that give you cash back or other kinds of rewards. So, not only do you never pay interest and build your credit score, you are also being paid to purchase what you would have to anyway. I started out with a Discover It credit card. It gave me a couple percent cash back on purchases. Over time I've been able to get cards that give higher percents cash back. 

Stocks

Next: the stock market. This one can seem really hard to get into, but it is more accessible and easier to get started than you might think. Before you invest in the stock market, you should set aside some savings. Also keep in mind that stocks are a long term investment, so whatever you put in needs to stay there at least a few years. 

After you have some savings set aside and some more that you want to invest, now it's time to talk about how to start investing. My first advice is to go with something like a mutual fund where each stock buys you into multiple different companies. It's safer to invest in multiple different companies than to put all your eggs in one basket. I have mutual fund stocks that are for places like Amazon and Apple. I also have exchanged traded fund stocks, although I don't like them as much since their rate of return has not been as high. Since 2016, these stocks together have almost tripled in value, so I know they can give a good rate of return while being fairly low risk. 

My next advice about stocks is to wait until the market is down to buy. You don't want to buy stocks when the market is up, or you will get less bang for your buck. For example, I bought my stocks in January of 2016 when the market was down, which is one thing that has allowed me to have a very good rate of return. December of 2018 and March of 2020 are other times that the market has been down and it was a great time to buy. If you are going to use an investing company like Edward Jones, you can let them know that you want to invest but prefer to wait to buy until the market is down. Your financial advisor can help you determine when it is a good time to buy. 

Speaking of investing companies and financial advisors... When you have an account with a place like Edward Jones, you get a financial advisor to handle your money and give you advice for no extra cost. The only cost involved is that they get a small fee from your earnings. I think that's worth being able to have someone do the work for you and give you invaluable advice.