The Top 3 Adult Tips To Get Your Financial Life Together
Everyone wants to know what they can do to become more financially savvy, but few people are willing to put in the time and effort to really get their financial life back on track. Unfortunately, that means that most “quick tips” out there are written for preschoolers. You’ll see dozens of articles on how to save more or spend less, but the advice is generally pretty shallow and obvious. That’s why I decided to create a quick list of “adult tips” for you. I know you’re not dumb. You don’t need to be told to “put a little away every month” or “don’t spend more than you earn.” That’s baby stuff. You’re in the big leagues now.
1. Think long and hard about your physical location
If there’s one thing that determines your lot in life more than anything else, it’s where you live. And while it’s obvious that growing up in America gives you about a billion advantages over growing up in sub-saharan Africa, geography matters on a much smaller scale too. If you live close to places you go frequently you might be able to…
- Live without a car (or at least use one less, decreasing auto expenses)
- Maximize your time (no more long commutes)
- Walk to the grocery store (and get only the food you need, decreasing waste)
- Get more exercise (decreasing your medical expenses long term and hopefully cutting the gym membership)
And it’s a no brainer that big cities tend to be more expensive. If you have to live in one, make sure you can get a job that’s worth the expense. If you want to be a Hollywood producer, then yeah you have to live in Hollywood. But if you’re going to be a chef or a teacher, you have a lot more geographic flexibility. Use that to your advantage. Less expensive metropolitan areas often have decently high paying jobs compared with the cost of living.
Not ready to switch cities and move cross country? At the very least, next time you move, be an adult and do a cost benefit analysis of the new place. It’s about more than how nice it is and how much it costs. Will it let you bike to work? Is there ample parking to have friends over (so you don’t have to go out as much)? Should you rent someplace cheap so you can save up to buy soon? Rarely, you’ll find that all of your criteria align, but simply having criteria in the first place can help tremendously.
2. Fees are for losers
Have some student loans to pay? Have a credit card to pay off? Make it automatic. You’ve heard that setting your payments automatically is a good thing for investments and expenses alike, so this shouldn’t come as a surprise. If you manually work through your payments every month, the likelihood you’ll forget one or two, and have to pay fees or penalties is high. If everything is automatic, you can focus your time and energy on stuff you actually want to do.
The most common excuse I hear for not setting automatic payments is that people are worried they won’t have the money to pay everything off without “moving some money around.” Listen, you’re an adult. If you don’t have the money to pay off your credit cards without thinking about it, you’re spending too much money. If the thought of your electricity bill debiting automatically worries you, you need to downsize to a place where you’ll use fewer utilities.
I’m not saying that every single month all of your expenses will be easily anticipated, but you should plan for the unexpected as much as possible. In my book, the number one predictor of future financial health is how often people miss payments they know are coming up. Paying your rent one day late every month or getting a $25 fee for a bounced check tells the world how little you value your money, and by proxy, your future.
3. Stop not paying for “advice” and start paying for advice
If you’re in the market for financial advice, please don’t equate “insurance salesman” with “financial advisor.” A lot of the time people who are trying to hock their products to you wrap it up in a nice little package they call “advice.” Sometimes they might even have titles like “financial advisor” when really their sole purpose is to sell you insurance or annuities, or they get big commissions off of your investments. That’s not advice. It’s trickery.
I’ve said it before and I’ll say it again. If you don’t have to pay for the advice, you aren’t the customer, you’re the product. A financial advisor who gets compensated by you AND ONLY you (not through commissions or fund managers or kickbacks) is the only way to guarantee the advice you receive is actually the best advice for you and not that guy’s wallet.
And if you’re looking for advice, every financial advisor will be required to give you a document called the ADV Part 2A. It’s a long document. It’s a daunting document. It has a ton of information in it. And if you want to know if you can trust that person with your money, you’ll read it. At the very least you’ll read the section on payments and fees. Then you’ll figure out what conflicts of interest they have. Blindly accepting advice is a dangerous business. Know who you’re getting into bed with or you deserve the bad advice you get.
What Can I Do Today?
You’re probably not going to pick up the phone and call a financial advisor this very second or move tomorrow morning if you’re in a bad location. But that doesn’t mean that these tips can’t help you right now. Set up your automatic payments before you close this browser. If you have a bad advisor, fire them today. No advice is better than bad advice. If you’re on a month to month lease, tell your landlord you’re giving them notice. It’ll be much easier to make the changes you need in your financial life tomorrow if you start today.
Nathan is the Chief Financial Advisor at Monte Largo Financial