You might feel like financial hacks are only for rich people, or you may have read a tip like skip your daily luxury coffee drink and save that cash instead over and over. There is actually plenty of money hacks you can access on a modest income, and there are plenty of helpful things you can do that aren’t just the same old pieces of advice. From credit cards to investing and getting more out of your home’s value to being creative with cash, the hacks below can help you improve your personal finances.
You’ve probably heard plenty of advice about why you shouldn’t use credit cards, but in fact, there are actually several smart ways to make them work for you. First, look for cards that offer rewards. You can then charge as much as you want on them—up to your limit, of course—as long as you pay off the balance in full each month. If you are already carrying a balance on your credit card that you can’t pay off this month, look for credit cards that give you a 0% introductory offer on balance transfers.
Be sure to note how long this is for since your interest may skyrocket when this period ends, but it could be as long as 12 to 18 months. If you need to pay down debt on multiple credit cards, focus on paying off one card at a time. You can start with either the one with the highest interest rate, which will save you money or the one with the lowest balance, which can give you the psychological satisfaction of paying off debt quickly.
Homeownership hacks are all about finding ways to maximize the value of your home or using your home to access money. For example, one of the ways to do the latter is by taking out a home equity loan. How much you can access depends on the available amount you have already paid down and the value of your home. You can find out more by reviewing a guide that will also give you information about tax treatments.
Another way to get money using your home is by signing up with a home-sharing service. For many people, this can be more desirable than bringing in a housemate because you may be able to make as much renting out a room a few nights per month on a temporary basis as you would having a full-time tenant sharing the place with you. Depending on where you live, your home can also be a great investment. If property prices are on the rise, you may be able to sell it in a few years and make a significant profit.
Saving and investing
There is a saying that you should pay yourself first. What this means is that your first priority should always be putting money away in savings, such as a retirement fund, before you do anything else. While it is generally a good idea to prioritize retirement savings, you may want to modify this advice if you are looking at a choice between putting money in a low-interest savings account or paying off debt. You probably owe more in interest on the debt than you are making on the savings.
However, assuming that you have paid off or are paying down significant debt, you should think about having a fixed amount automatically deducted for investing and other costs. You may want to talk to a financial planner about the right proportion to put toward savings and what type of investments would be best for you. When it comes to savings, it can be tempting to think that it isn’t worthwhile to only save small amounts. However, an emergency cushion of as little as $500 can make a big difference, and you can get there by saving $10 per week for a year, or less than $2 per day. Think in terms of something being better than nothing.
There are a few ways that switching to cash can help you manage your money better. First, there is just something about physically handling cash that makes it seem more real than swiping your card, and you will probably be more likely to think twice instead of mindlessly spending. Second, using cash can be a great way to manage your spending. You give yourself a certain spending budget each week. When it’s gone, there’s no more to spend.
Third, cash can have great visual appeal. While you’re generally better off putting money into, at minimum, interest-bearing savings accounts, you may be more motivated to save small amounts if you set up jars that you can throw change or small bills into. Ideally, this system might work best if you supplement it with automatic deductions from your paycheck into savings. You can label each jar for what you are saving toward, such as “tropical vacation.” Just be sure that you don’t give into temptation and raid them when your weekly allotted cash budget runs out.