20 Essential Tips on Finance to Empower Beginners in Financial Wellbeing

Hey there!

Today I’m talking about 20 tips on finance for beginners to help you get a head start with creating a healthy financial lifestyle. These are things I wish I knew right from the start.

When I first set off on my own, navigating the world of personal finance was like stepping into a dense fog without a compass. It was a scary experience!

I had no financial advice to rely on except my parents telling me to “save, save a lot.” I had no wise guru giving me tips or pointing me in the right direction. I was left to figure it out all on my own, which was learning from trial and error.

It wasn’t easy, I can tell you that! 

Money matters were overwhelming, but with time and perseverance, I started gaining some understanding from simply talking to other people.

The personal money management advice from others helped a bit.

Slowly but surely, my confidence did grow, and I became more capable of making informed decisions about saving, investing, and budgeting.

Looking back at those early years with no guidance whatsoever now makes me appreciate even more how vital it is for everyone to have access to good financial advice right from the start.

Today I have 20 essential tips on finance that helped me get on track with my finances.

This post is not miracle advice on how to get rich, but it starts with a foundation to help you get started on the right path; A perfect way to form good money habits and grow a strong, secure, and financially independent life.  

Here we go…

20 Essential Tips on Finance to Empower Beginners in Financial Wellbeing

1. Create a budget and stick to it like glue

Start tracking your income and expenses to understand where your money is going. This will help you identify areas where you can cut back and save more. Download my FREE simple 50/30/20 Monthly Budget to get started.

2. “Save, save a lot” should be your manta

Make it a habit to save a portion of your income every month. Aim to save at least 10-20% of your earnings. 

If you’re eager to significantly increase your savings, I will post my 10 ways to save 50% of your income. Here is my post on Do You Waste Money? 112 Things to Give Up NOW

3. Set financial goals

Setting financial goals is essential. Define both short-term and long-term goals, such as saving for a down payment on a house, paying off your mortgage faster or planning for retirement. Having these goals in place will give you something to strive for and keep you motivated on your financial journey.

4. Prioritize paying off high-interest debts like credit cards

Tackle them head-on and free yourself from that cycle of interest charges. This will save you so much money in the long run.

After we paid off everything from credit cards to vehicle payments we took on the task of paying off our house in 5 years.

5. Avoid impulse purchases

Before you buy something, ask yourself if you really need it or just want it. Take some time to think before making a decision, because those impulse purchases can really start to add up. A good challenge to try out is a “no spend challenge”, which can help you get into the habit of saving money.

6. Kickstart your emergency fund

Life has a way of throwing unexpected curveballs our way, so it’s important to have a safety net in place. Aim to save up 3-6 months’ worth of living expenses in an emergency fund. This will help you be prepared for any surprises that come your way, like losing your job or facing a medical emergency.

7. Automate bill payments

Set up automatic payments for your bills to avoid missing due dates and paying late fees. This will also help you maintain a good credit score.

8. Start investing early

Think ‘compound interest’ –  it’s your new best friend! Take advantage of compounding interest by starting to invest as soon as possible. Even small amounts can grow significantly over time.

There are many different ways to get started depending on what your financial goals are in life. Check out this saving and investing page. It has good up-to-date financial information. 

Even if you learn more about some financial services and plans and then visit your personal bank to set up something you have in mind.

I’m a bit old school, because I still prefer meeting with someone face-to-face to discuss and ask questions before making any decisions about my money. I always find people offer their best advice in person with tips and tricks you can’t find on the internet.

9. Diversify your investments

To minimize risk, it’s a good idea to diversify your investments by spreading them out among various asset classes like stocks, bonds, and real estate. This way, you’re not putting all your eggs in one basket and you’ll have a better chance of seeing positive returns.

10. Educate yourself

It’s important to educate yourself on personal finance, investing, and other financial topics. The more you know, the better financial decisions you’ll make with your money.

11. Negotiate your bills

Don’t hesitate to negotiate or compare prices for your bills, like insurance and cable. It’s always worth asking. And let’s face it, being a loyal customer doesn’t always pay off these days. So, say adios!

Check with your employer to see if they offer any benefits through insurance companies for union members or perks for employees. I was able to save a significant amount on my home and auto insurance by being a nurse and a member of the SEIU union.

12. Use credit responsibly

Using credit responsibly is key. To avoid interest charges, always pay your credit card bills in full and on time. Only use credit when you really need to and try to keep your credit utilization low.

It’s important to get a credit card when you’re young so you can start building credit for the future. By doing this, you’ll be working on improving your credit score. This will increase your chances of being approved for big purchases in the future. After all, if you have no credit history, how can someone trust you with their money?

The smartest way to make the most of your credit cards is to only purchase what you know you can pay off by the end of the month. Take advantage of any card point systems available but that’s it.

13. Take advantage of employee benefits

Make sure you understand and utilize all the benefits offered by your employer, such as retirement plans, health insurance, or flexible spending accounts in some countries.

14. Plan for retirement

Start saving for retirement as early as possible. Contribute to retirement accounts like work pensions and take advantage of any employer match-based savings. Talk to your financial institution or workplace to help you get started.

15. Review your insurance coverage

Make sure to regularly review your insurance policies to ensure you have enough coverage to protect yourself and your assets.

16. Avoid unnecessary fees

Be mindful of bank fees, ATM fees, and other charges. Choose accounts and services that have low or no fees.

Contact the financial institution you bank with to find out more information.

For example, TD Canada Trust offers basic chequing accounts with no fees as long as you maintain a minimum balance of $5,000 or more. These accounts also come with additional benefits such as personal credit cards with no annual fees and free cheques, including certified cheques.

Scotiabank offers similar accounts and benefits if you keep a balance of $3,000 or more.

17. Regularly review your financial progress

Take time to regularly review your financial situation. Assess your progress towards your goals, adjust your budget as needed, and make any necessary changes. One way to gain an understanding of your overall financial situation is by filling out a Net Worth Statement. It can provide you with a clear picture of where your whole financial health is.

Here are a couple Net Worth Statements to get you started… a simple version and an advanced.

FYI – The advanced statement took about 10 minutes to come through to my email after filling out and submitting

18. Always live below your means

Resist the temptation to overspend just because you have extra money. Living within your means will help you save more and build wealth over time. So don’t try to keep up with the Joneses. You’ll thank yourself when you’re older.

19. Start a side hustle

Consider starting a side business or freelancing to earn extra income. This can help you accelerate your savings or pay off debt faster. Every little bit counts.

In my 20s, I always felt like I needed to be making more money and advancing in life if there were still hours left in the day. Was that normal? Probably not! But I really wanted a better life for myself and it can really pay off when you’re starting from the bottom financially.

20. Seek professional advice

If you‘re unsure about certain financial decisions or need guidance, always do your research before making any major financial decisions – knowledge is power! A financial advisor can provide personalized advice based on your specific situation.

Thank You Credits: Cover photo by Esranur Kalay on Pexels.

“Savings and Investments.” National Bank of Canada, 2024, https://www.nbc.ca/personal/savings-investments.html

“Net Worth Worksheet.” Chartered Professional Accountants (CPA), 2024, https://www.cpacanada.ca/

“Balance Sheet.” National Bank of Canada, 2024, https://www.nbc.ca/forms/savings-investments/balance-sheet.html