5 Personal Finance Tips You Don't Always Hear About

By Tisha Tolar on 26 January 2009 (Updated 22 February 2010) 21 comments



We have all read about the usual personal finance tips being offered by the writers of the personal finance blogs around the internet and from the experts on television. They usually end up meshing somewhere along the line with information that includes the importance of setting a budget, tracking your spending, and establishing an emergency fund. While that advice is all valuable and true, there are some other things you should be doing that will keep you financially strong.

Here are some of those tips that may be just as important to your financial health as the basics. Even if you've heard them before, there is nothing wrong with a refresher course:

1. Save For Your Child's Education Now

The cost of a college education certainly is not going down any time soon so in order to prevent future stress on family finances or subject your children to a potentially harder road during the college years, invest money into a tax-free 529 college savings account. The earlier you start, the more chances you have to save.

2. Get Your Own Education

Sure, it is likely we will struggle with paying for an education but it is essential to earning extra money when compared to those with only a high school diploma. If you can find a way to go back to college for the degree you never got or to obtain a degree you have wanted, it is never too late. Furthering your education doesn't necessarily mean going back to college. There are a lot of alternative options for furthering your knowledge and learning new skills. Many communities offer classes to improve your computer skills, your crafting skills, and can even introduce you to new talents you didn't know you had. Take a course in photography or creative writing. You can always use these skills to supplement your existing income and explore what financial freedom your natural talents and hobbies can bring to you.

3. Skip the Extended Warranties

nge up to a year or more. If something is going to break, it will likely break during that time. The only one that profits from your purchase of an extended warranty is the company that sells them. Be choosy in what you are spending your money on and research items before you buy them. Armed with this information before you hit the store should make you less susceptible to spending cash on useless warranties.

4. Question Your Loyalty

Chances are good that over the last few years, you have selected and stayed loyal with many technological services from day one. You are barraged day in and out with promotional offers for the latest plans for cell phones, cable services, internet providers and the like. While it may be annoying to have to sift through the deals that are out there, your wallet may appreciate your efforts. Most companies will not be the first to tell you that you can get a better deal if you just pay attention to what is going on. They are happy to keep letting you pay more for less services than other customers are getting. Stay on top of what you are paying for and you'll find savings.

5. Prioritize Your Health

Face it, if your health goes in the toilet and you don't have the appropriate health insurance coverage available, you can very quickly lose everything you have saved when medical bills start taking over your life. If you an your spouse have employer-sponsored health plans, make the most of whichever plan covers your needs. If you are self-employed and have to find insurance on your own, work hard to find the plan that fits your financial needs and your health concerns. You should not always go for the cheapest policy but the one that will cover your basic medical care costs as well as the costs of the unexpected expenses that can arise with health issues.

 

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Guest's picture

It's nice to get a "fresh" set of tips. Keep up the good work.

Guest's picture

Wow! You're on the ball with this one. Education, both yours and especially your children's is critically important. Start saving today through state sponsored Keogh plans. you should be paying into an education plan the month of your child's birth. I would estimate for $50,000 /yr for college in 18 years from now.

Guest's picture
Gordon

Child's education or retirement. Which one comes first? We can't rely on social security when we retire, but our children can apply for financial aid/scholarship, right?

Guest's picture
Femmeknitzi

Gordon:

You're absolutely right. Never sacrifice your retirement for your child's education. However, most people overestimate how much financial aid their children will receive.

But you can do both. Max out your 401 (k) (at least up to your employers match), start regular contributions to an IRA and then start a 529 for your children.

Guest's picture

This is a very well done article. Nothing more to say other than well done. I'm going to link to this on my site!

Guest's picture

It is amazing to think just how much money the stores and companies that sell extended warranties must make! It's basically like pure profit, because I would guess that for many of the ones that are sold, the item does not break during the warranty period, so it's just 100% profit right to them. I agree - they are not necessary and are very expensive.

Guest's picture

I've seen that some extended warranties pay off. Something like a laptop if you do a lot of traveling may be a good candidate. I've known people who aren't very careful with their cell phone and have to buy a new smartphone a couple of times a year.

Some extended warranties cover these of damages and can be boon to some.

Guest's picture
Guest

#5 bears repeating! Your health should take priority over everything else. Unfortunately, it's a challenge when you're surrounded by people who think sleep is optional and who think people who have time to exercise and eat right aren't working hard enough.

Guest's picture

This post is on the money (if you will pardon the pu).

I have to chime in on extended warranties-- I think they are one of the biggest rackets going . . .

As mentioned, most products already come with warranties and to take it a step further, is the product that questionable that it needs to be warrantied? Something to think about when making the purchase in the first place!

Guest's picture
Bontempfeline

Being a longtime frugalizer, I always turned down extended warranties. Fortunately, my husband bought the 3-year on an LCD TV which went on the fritz after 2.5 years. (He actually bought it because the cashier quoted and sold us the 3-year at a 1-year price, and we took it without realizing it.)

The TV needed a new board, which was no longer manufactured. We wound up with a check for the entire amount, including the tax; almost $900. We paid only $40 for the extended warranty, but, would that have been worth $100? I think so.

I think it all depends on the ratio warranty price to product price.

Guest's picture
Michelle

Bontempfeline, it would depend on the ratio of the warranty price to the product price, and all that divided by the chance that you will need to use the warranty. So even if the warranty costs only 3% of the product price, if the chance you need to use it is only .5%, you shouldn't buy it.

(That is an oversimplification. Basically, you want the warranty to cost less than its expected value, which is what you get if you take each thing that can go wrong, multiply the cost of it going wrong times the probability of it going wrong, and add up all of those. Also left out is the value of avoiding risk--but unlike with your health, where you could end up with a million dollar cancer treatment or something, the most you would be risking is the price of the item. For most things, I daresay that if you can't afford to save up for it twice, you probably can't afford it the first time.)

Guest's picture
Bontempfeline

I must defer to your logic. However, I'm still very glad I had that TV warranty!

Guest's picture
jacktukis

6) Don't get into fender benders like I did this morning (snow, Chicago). D'oh.

Guest's picture
Ken

Our health is one of our most valuable investments. I can't trade this bod in at Walmart. It's the only one I have. I better take care of it.

Guest's picture
cupcakegirl27

The extended warranties are good for the big items washers, dryers, fridges, etc. Also really good if you have kids and buy the expensive Wii or Xbox 360. Kids are a little hard on those items and the warranties do pay off on the bigger and expensive items.

rstlne's picture
rstlne

One loyalty that I questioned was the landline phone. I realized that I kept it only because I wanted to make cheap international calls. So I replaced it with a phone card.

Guest's picture
Mickey Rat

Here's a tip I just used. When I went to visit my daughter out of town, I was afraid to run up bills on my phone because I have a local plan. I went to Walmart and bought a Tracfone that came loaded with minutes and a card for a few extra ones.

By doing this, I was able to control how much I spent and not go over minutes. Good deal!

Guest's picture
kmd

I was expecting a long winded list of tips of do's and dont's on the other side of the normal lists of tips .. Unexpectly I was pleasantly surprised by this article.

Tisha Tolar's picture

just wanted to say thanks for all the kind words about this post! I appreciate it and am glad the tips helped!

 

 

Guest's picture
Victorino

Reconsidering our loyalty to products and companies is a great personal finance tip that many people took for granted.
And of course yes, our health is always a good investment that will keep us away from medical expenses in the future.

Guest's picture
joel gray

I think getting a college plan is one of the best gifts you can give to your children. Thanks for sharing these advices. If you get the chance, feel free to visit my site for helpful finance tips.