5 Big Financial Tips To Get Ahead and Stay Ahead

by Omie Ismail

Want to get ahead financially? And stay ahead for life? Here are five big financial tips that can help you do just that.

If you want to move ahead financially and stay ahead for life, you need to nail down a few major financial decisions. And the sooner you get them right, the more likely they will make a difference in your lifestyle.

Here are five significant financial tips that will give you a financial leg up for the rest of your life:

1. Max Your 401k From 21 On

The moment you start working and qualify for a 401K program, you should max out on it. Hopefully, by the time you land your first “real” job, the only debt you have is a few student loans. So before you start spending your first paycheck, put away at least 15% of your income in a tax-deferred account.

It’s a statistical fact of life that most Americans spend most of whatever they have in their hands. That’s the nature of the beast, and chances are that you’re no different than the rest of us. So, the trick to saving is to keep the money out of reach. And because you’ve never gotten used to what your net paycheck is, start yourself out with a little less take-home pay, and you’ll never know the difference. Your net income will only decline by ten percent when you consider tax savings.

By the time you reach your forties, you’ll have some comfort knowing that there is a six-figure account with your name on it.

Related:

• Making the Most of Your 401k Plan
• A Guide to 401k Contribution Basics

2. Buy a Modest Home Early in Life

Many people will debate to death the whole rent versus buy argument. I was a happy renter for many, many years. But if you are planning on staying in an area for at least ten years and you can get a house where the payment is about what you would pay in rent, buy it. Before you buy, put together a 20 percent down payment and get your credit score well into the 700s. That should decrease your monthly cost.

A home doesn’t necessarily mean a house, and if the cost of a condo is the same as rent and that meets your needs, buy it. If you plan to marry and have kids, buy into a good school district because the price of private schools is likely to continue to skyrocket.

3. Learn the Stock Market and Invest Very Young

The vast majority of Americans never invest in a single company’s stock. Most of them are content to put their money in the mutual funds offered by their 401k plans. And that’s a shame. The stock market has been an enormous wealth generator for many people, and increasing opportunities to prosper will come from investments in foreign companies.

If your kids have graduated high school and don’t know the fundamentals of stocks, you haven’t done your job educating them. The stock market benefits from compounding over time. Investments made during one’s early 20s can become massive by mid-life. Sure, the markets will always go through declines, but on average, they produce returns of about ten percent over long periods.

Related:

• 4 Beginner Investment Mistakes To Avoid
• 3 Questions To Ask Before Investing To Minimize Costly Mistakes
• Options for Investing Small Amounts

4. Learn How to Negotiate Your Salary

This skill is probably the most overlooked and under-discussed.

I used to have a few people that worked for me that would never accept what I offered them for a raise. I had to battle with them every year, but they were very good at their jobs, and I was not about to lose them. They never got everything they wanted, but they were able to inch up their salary a little more each year. Over several years, this added up to over $10,000 per year.

Learn how to sell what you’ve accomplished and seek a higher salary each year. It may not be comfortable, but it can make a huge difference.

Related:

• 5 Steps to Getting a Salary Increase
• 13 Ways to Score a Bigger Raise

5. Set Goals and Measure Them

If you want to make progress, you need to have a goal, a plan, and a way to track your progress.

The most financially successful person I know had a clear goal from the day he entered college. He knew exactly what he wanted to do. It was a reasonably simple plan, but he stayed focused on it, and it all came down to execution. He stuck to the plan, which has paid off hugely for him.

You may have different goals, but whatever they are, get them down on paper and don’t let others deter you. Once a quarter or yearly, try to see where you are versus your goals and make the necessary adjustments.

If you’ve decided to live a simple life so that you can pursue your dreams in your work, then don’t let someone that lives a lavish lifestyle convince you to switch course. On the other hand, if living large is your goal and requires you to have a high income, then stick with that plan and live large as cheaply as you can!

Related:

• Successfully Setting and Achieving Financial Goals
• Be Debt-Free This Year
• Easy Ways To Build an Emergency Fund on a Tight Budget
• 7 Basic Steps to Managing Your Money

Reviewed April 2023