It would not be fair to begin 2017 without looking back at some of the highlights of 2016. I’ve read many new blogs and met many amazing people who are doing their own thing in the personal finance world and changing people’s lives one action at a time. To pay homage to all who’ve inspired me and countless others with their words of encouragement, I’m looking at the some of the best personal finance quotes of 2016:
1. “The first step toward spending less money is to become aware of your spending problem.” (Natalie Bacon)
I found Natalie Bacon when I was on Pinterest searching through my feed. This post summed up the feelings that so many of us struggle through. If you are addicted to spending, there are ways to get over it. If you can admit that you have a problem, understand the root cause and change your mindset, you can take steps to recondition your habits and eventually cut back on unnecessary spending.
2. “Your financial success and stability depends on what you do when you have a change in income”. (Budget Brain Consulting)
A couple years ago, I had a conversation about salary increases with my neighbour. I told him that if I ever got a big, fat and juicy salry increase, I would continue to “survive” on the old salary. He laughed and said that I would not do it and I would find additional uses for the money. I think that it’s a brilliant idea and Ashley wrote about it in her blog post. If you’ve been lucky enough to get a nice raise, here are five important things you should do.
3. “By counting your blessings and radiating positivity, you will activate a cycle of abundance and prosperity.” (Debt Free Black Girl)
Kristin, has easily become one of my favourite bloggers and this post should give you an idea of why. I’ve been giving thanks for my blessings a lot the last few months. In fact, that’s one of my plans for 2017 – I want to increase my positive outlook about everything that’s going on in my life. Next year is going to be a big year which requires me to spend some money and I’ve been a bit nervous about finding enough funds to pay for my new initiatives. But then one day about three weeks ago, I affirmed that I will find a way to get the funds that I need to make my project a success. Last week I was blessed with an opportunity that will pay me some of what I need to get by.
4. “Spending less than you earn is the founding block of a solid financial future and where everything else starts. ” (Money Q and A)
I know a lady who used to complain that her bills were greater than her income and each month she had to play a juggling game to stay on top. People think that spending less than you earn is just about the cold, hard cash that you pay for an item or service. But your spending also includes your credit card purchases (yes, online purchases as well.) Needless to say, that lady was able to get rid of some of her bills and debt after many years of struggle, but her story was an important lesson. Like Hank from Money Q and A said, when you spend less than you earn, you can stay out of debt.
5. “Savings apps are great, but you will still have to become intentional with saving your money, if you are serious about improving your financial health.” (Your Money Worth)
In this fast paced technological world people want the easiest solution for everything and preferrably something that comes with an app. I suspect that’s why budgeting is not widely practiced in some countries- it takes time to sit down and allocate funds. And you have to keep at it on a regular basis. Melissa over at Your Money Worth acknowledges that budgeting and saving can be difficult. So she has five helpful tips which can help you to start saving especially if you don’t have a clue about how and where to start.
6. “Becoming mortgage free, or debt free, doesn’t “just happen”. It requires work and sacrifice, just like anything else in life.” (Family Money Plan)
If you want something you’ve never had, then you have to do something you’ve never done. I can’t remember the exact quote or who said it, but in my personal journey this is something that I’ve seen over and over again. In 2016 I used the debt snowball method to get rid of a personal line of credit. That was the first time I’d ever used that method and the motivation was to get rid of a loan that was hanging around just under three years. Big goals call for drastic measures. Read about how one family realised their goal of becoming debt free by doing things that they had never done.
7. “I would argue that the most important personal financial number is: the amount of money you need to retire.” (Finance Freaks)
For the first time in my personal finance journey, I calculated how much money I need to retire and it scared everything out of me. It was hard to see those numbers knowing that my current salary can not even get me to at least half of the total. I’m looking at approximately $2,000 a month for at least ten years. Exactly! The good news about calculating how much money I need to retire is a good starting point for creating a plan for how I’m going to reach that goal. However, this article puts a spin on that and suggests that your retirement needs may be adequately serviced by your net worth, specifically how much your assets are worth.
8. “The first question you should ask yourself when it comes to paying down debt or investing is how much your debt is costing you.” (Punch Debt in the Face)
This is one of the best personal finance quotes/ questions that I’ve ever heard in my life. Why? Because it asks an important question that no one ever asks. I had two pieces of debt – the line of credit and a property loan. I still have quite a ways to go on the property loan, but the line of credit, which had a much higher interest rate was a lot easier to pay off. However, if you have multiple debt such as credit cards, car loans, mortgages etc., it will take a bit more number crunching to see which one you should tackle first. How much is each debt costing you? This post suggests tackling short term debt and high interest loans first.
9. “The best way to handle an emergency is to build up a cash emergency fund.” (Hope and Cents)
Many years ago, when I was a new university graduate and fussy that I found my first job, my mother encouraged me to start a registered retirement savings plan with the credit union. I did and I decided that I would contribute to a shares account at the credit union. Unfortunately, as things popped up I would use the funds in the shares account but I would contribute to the RRSP religiously. Fast forward 13 years and my RRSP has bloomed and blossomed, but my shares account, now an emergency fund is still a work in progress. I now realise the benefit of this cash based emergency fund and I’m grateful that I took steps to boost it as much as I could. I agree with Hope and Cents which touts starting an emergency fund as one of the best pieces of financial advice.
10. “Your financial journey will be a mix of confusion, restrain and awakening.” (The Finance Bar)
So true! If it seems as though people are able to get through their financial difficulties fast and easy, that’s always not the case. It’s very easy to write about what happened, especially after you’ve been able to push through and succeed. But going through days and nights of anxiety and uncertainty can be rough and stressful. This post adequately addresses that and explains that it will not always be a bed of daisies. You have to be prepared to put in the effort and make the necessary changes to get to where you want to go. The sweet victory comes when you’ve achieved your goal and can sit back and say that it was all worth it.