When it comes to personal finance, there's a lot of advice out there.
Some of the best advice comes from a forum website called Reddit. Specifically, the r/PersonalFinance subreddit. (A subreddit is like a mini forum within Reddit all about a specific topic—in this case, personal finance!)
However, there are tens of thousands of posts talking about everything from retirement to getting out of debt, making big purchases, increasing your income, budgeting, and so much more.
So, to help you find the best personal finance advice, I spent a few hours digging through hundreds of posts to uncover the hidden gems with timeless, life-changing information.
Here are the 21 r/PersonalFinance I think everyone should read, broken down by category:
I put budgeting first because knowing how to create and use a budget is essential to any financial plan. There are two posts I think are specifically awesome:
Reddit user Celesmeh created a beautiful spreadsheet (pictured below) over three years ago. Since then, he's updated it twice to it's current version (ver 3.0) to make it easier and easier to use, even for people who have never budgeted in their life! And it works wonders.
If you do nothing else from this post, simply copy this spreadsheet and fill it out. It can change your life!
Gamification is the addition of game-design elements to non-game activities, such as budgeting and saving money or even getting out of debt. Even if you're not a gamer, you can use this powerful psychological hack to make saving money easier and more fun!
That's just what one Reddit user did in this post:
I'm a tipped employee who takes home my main source of income on a daily basis, which can make it hard to budget correctly. It's easy to spend money when you constantly have a little cash in your wallet. Recently, I decided to crack down, and actually came up with a system that has worked spectacularly. I have very minimal expenses and make a decent living, but I'm still shocked and proud of myself that I managed to save nearly $1500 in less than a month following this method.
Money in Relationships
When it comes to love, money issues are the second most common reason for divorce.
And money issues don't just put a strain on romantic relationships, either. Poor personal finance can lead to fights among friends and family members as well.
That's why I found the following Reddit posts so helpful:
This post is a beautiful description of what often happens to new married couples who never shared their finances before. It talks about the mistakes they made and how they came together to create a beautiful, harmonious relationship with their money.
You get married and then it’s living happily ever after, right? Well... A few months after we were married, my wife came home from Target with a couple of large shopping bags. “What did you buy this time?!” ... I couldn’t answer the question, “Are we okay?”
He perfectly breaks up their strategy into three simple steps:
- Step 1: See everything in one place.
- Step 2: Give each other permission to spend money.
- Step 3: Decide what we want, together.
Definitely a must-read for anyone in a committed relationship!
If you're used to two incomes but want to cut down to one, here is some solid advice:
Create/update your budget. Carefully go through everything line by line to see what you can cutback or cut out.
Bolster your emergency fund to a year's worth of expenses.
Reduce/eliminate unnecessary big-ticket item expenses. I noticed you just bough a brand new car. Drive that thing into the ground for the next 10 years if you can.
Try to maximize your retirement investment first before funding the 529. Students can always borrow for school. You can't borrow for retirement. If anything, not being a financial burden to your adult children is a great gift.
You can talk to a CPA or even a fee-only fiduciary financial adviser, but your situation isn't complicated or desperate, it just needs fine tuning and cutbacks here and there.
The only thing I disagree with on this thread is building up a year's worth of expenses in a savings account. Especially given the massive money printing that has happened over the last year (yay 2020!), having so much cash in a savings account is only going to hurt you.
Instead, what I personally am doing is keeping 2 months of expenses in the bank and investing all the rest in income generating assets. Examples include blue-chip stocks, precious metals, cryptocurrencies, and starting your own business.
Of course, it all depends on your own individual risk tolerance. If you can't sleep at night without many months worth of expenses saved, this might not be the best strategy for you. For me, this invested money is still liquid enough that I'm not worried about it.
Dealing with a death is never easy. This is especially true when it comes to personal finance; you have to pay for the funeral arrangements, figure out how to divy up the deceased's assets, and more—all while likely dealing with intense emotional pain.
Luckily, one Reddit user created this beautiful list of everything you need to do when a loved one passes. For example:
The funeral home won’t tell you this, but you don’t have to buy things like urns and whatnot from them. I chose to, because the prospect of receiving a plastic baggie with my husband’s ashes that I would have to deal with was horrifying. A friend bought an urn for his father’s ashes on Amazon. There are options that are cheaper than the funeral home, but I chose to pay the obscene markup so that I wouldn’t have to deal with the logistics.
Consider bookmarking this one so you have it just in case.
Now let's dive into the topic everyone loves—saving money, baby!
6. For everyone shopping on Amazon's Prime Day: "savings" from sales aren't savings if you weren't already planning on buying the item.
Oof, if you're a big sales shopper, this one probably cuts deep! But it's true; buying something you never intended to buy just because it's "on sale" is not the same as saving money.
This is a trap a lot of people fall into (myself included): just because it's a "good deal" doesn't mean you "saved" money by buying it, it's still money that you spent!
This might be obvious to most people but it's a good reminder that pops up on here occasionally and has stopped me from making some dumb purchases on more than one occasion. Hopefully it helps someone on this Prime Day.
The same is also true for Black Friday, as this Redditor points out.
It's amazing how much money we spend on food and eating out. And even more amazing how much money we waste on food that goes in the garbage!
Luckily, this Reddit user found a solution: The Crockpot.
BOOM! $39 investment. We're going to make that back in.... three days. Are you ready? We're going to make enough food for dinner AND left overs for lunch.
I'm going to give you some of my super-secret-I-eat-this-every-week-crockpot-meals that are delicious, cheap, filling and easy. Yes. The crockpot makes all of those possible.
If crockpot meals aren't your thing but you still like saving money, check out these Reddit posts on food savings as well:
8. My Dad just figured out he's been paying $30/month for AOL dial-up internet he hasn't used for at least the last ten years.
The point of this post is not AOL dial-up internet. The point is that it's very easy for even a seasoned personal finance veteran to miss simple recurring subscription payments and end up wasting thousands of dollars!
The bill was being autopaid on his credit card. I think he was aware he was paying it (I'm assuming), but not sure that he really knew why. Or he forgot about it as I don't believe he receives physical bills in the mail and he autopays everything through his card.
He's actually super smart financially. Budgets his money, is on track to retire next year (he's 56 now), uses a credit card for all his spending for points, and owns approximately 14 rental properties.
This is a common trend on the Personal Finance Reddit forums! Pay attention to your statements.
Just to hammer the point home, here is a thread about how this Reddit user's Amazon store card was charging him extra illegally.
Called the number and the guy answered then danced around what the name of the company was and what they were charging me for. Eventually he slipped the word synchrony and that dinged in my head the bank that issues the amazon card. So i googled (all this while still trying to get this guy to tell me what this charge was for) and found that it's an automatic form of insurance that you are put on when you open the card. It's 1.66% of your balance monthly and you have to opt out by responding to a single piece of paper mail that gets sent sometime when you open the card.
10. If you have an expensive prescription, contact the manufacturer and tell them you can't afford it.
Sometimes as consumers we feel helpless and frustrated with high bills, whether that's perscriptions, utility bills, or credit card interest rates.
This Reddit user wanted to share that people can call in and lower these bills fairly easily:
Bristol Myers just gave me a copay card that changed my monthly medication from $500 a month to $10. It lasts 2 years and they will renew it then with one phone call. Sorry if this is a repost, but this was a literal lifesaver for me.
Saving money is great. But you know what's better?
Letting your money work for you.
That's why investing is so important. In saving, you actually lose money over time in the form of lost purchasing power. Meaning, inflation (the rising cost of goods) is higher than the interest you earn from your savings account. So in a year, your dollars are not worth as much despite having more of them. (If you want to learn more about purchasing power, read this article.)
But by investing, your money works FOR you! You get to earn more money just by using your current money wisely. Isn't that awesome?! It's the key to living in financial abundance.
Here are two beautiful Reddit posts on investing:
Warren Buffet is known as one of the greatest investors of all time—and he has the net worth to prove it. His age-old advice is to put your money into an index fund, such as the S&P 500, rather than trying to play the market and bet on individual stocks.
"Over the years, I’ve often been asked for investment advice, and in the process of answering I’ve learned a good deal about human behavior. My regular recommendation has been a low-cost S&P 500 index fund. To their credit, my friends who possess only modest means have usually followed my suggestion.
I believe, however, that none of the mega-rich individuals, institutions or pension funds has followed that same advice when I’ve given it to them. Instead, these investors politely thank me for my thoughts and depart to listen to the siren song of a high-fee manager or, in the case of many institutions, to seek out another breed of hyper-helper called a consultant."
Please note, however, that this is Buffet's advice to people who don't have the time to spend deeply researching the economy, finances, and individual companies. If you have the time or interest, investing individually can make you much richer much faster.
But if you'd prefer a low-risk option that simply raises over time, index funds are the way to go.
There is always fear waiting to stop you. But if you let it stop you in 2020, you would have missed out on doubling your money in the stock market or with cryptocurrency.
This Reddit post talks about why you shouldn't listen to the doomsday people"
"What about my stocks? Should I sell all my stocks?" NO!!! Do. Not. Sell. Your. Stocks. The only exception here is if you really are completely and utterly broke otherwise and absolutely need the money. Look, I invested almost all of my life savings in late September last year. And then watched a LOT of it go away - on paper. But guess what? It's all back already, and then some - because I didn't panic sell. In fact, the best thing you can do in a recession is buy more stock! A bad market just means that stocks are on sale. Who doesn't love a discount? Again, I wouldn't advise buying unless you have the budget to do so.
With that said, it IS actually likely that we will see a recession similar to or greater than the Great Recession in the coming years due to the impact of the Coronavirus and the insane money printing happening in the US.
What I am doing is buying gold, silver, cryptocurrencies (such as Bitcoin), and some stocks I believe will continue to climb in value despite a recession (such as energy stocks, EV stocks, and mining stocks). But I am not a financial advisor and this is not financial advice. Do your own research!
Big Purchases (Home/Car/Etc.)
Next up, let's talk about personal finance when it comes to the big stuff that really matters, such as your home or car.
The purpose of this post is not to talk about a bearded dragon. It's to show you that there are lots of hidden costs to almost every big purchase that you might not have thought about.
Life pro tip, do a total cost analysis on pets [or any big purchase] before deciding to purchase. Even free pets are absurdly expensive. In 12 years both of my kids are going to be in college and I will desperately need $10,000 then. I will not need an aging lizard.
In a nutshell: Be aware of the FULL cost of something before you decide to buy. For a home that means repairs, upgrades, utilities, taxes, local costs, etc.
14. I bought a used car last night, and if you're new to buying used, please read this so you don't fall into the traps.
Buying a used car can be a royal pain in the ass. This post helps you avoid the financial pitfalls when they try to get more of your income than you bargained for.
Car salesmen are not the ones you need to fear. Many of them are great, and work long hard honest hours to push some cars. As my dad told me before he dropped me off to buy my first used car, "When they get you in the back room, that's when they're going to try to screw you."
If you think that's a joke or an understatement, please accept the fact that it is neither. When you sit down in the chair in the finance office, you need to be as alert as a deer in hunting season. Here's how they tried to get me, and I hope I can help one person not get taken.
15. In order to get the lowest lease price possible, you must learn how to calculate a lease. Here's a long and in-depth guide to how leasing works, plus real world examples from my most recent lease.
Phew, that was a mouthful! But this post is absolutely fantastic if you're considering leasing a car.
This post will include the following info:
- The math behind the calculation
- What kind of car to look for
- Where to find the info you need
- How to negotiate the best lease
16. As a former car salesman, these are the common fallacies that people used to justify purchasing a new car.
Are you considering buying a brand new car? Read this first.
There are 4 basic reasons people came in to purchase a car.
Just move into a new home and want ALL THE THINGS?! I can relate. But don't forget... you can build your collection over time.
If you're just starting out, remember that it took your parents decades to collect all the furniture, decorations, appliances, etc you are used to having around. It's easy to forget this because you started remembering things a long while after they started out together, so it feels like that's how a house should always be.
Insurance is a big cost in personal finance. Do your financial future a favor and read these posts.
18. Our family of 5 lost everything in a fire yesterday. Would appreciate advice for the rebuilding ahead. (x/post /r/frugal)
This post is just an absolute must-read for everyone. Even if it seems like it has nothing to do with you, read it. It could save your financial future one day.
Hey OP... I used to be the guy who worked for insurance companies, and determined the value of every little thing in your house. The guy who would go head-to-head with those fire-truck-chasing professional loss adjusters. I may be able to help you not get screwed when filing your claim.
19. Reminder: You can negotiate your hospital/medical bills down, even if you have insurance. I knocked 30% off my bill for an in-home sleep study with just two phone calls.
Not only can you negotiate your hospital and medical bills. You can negotiate phone bills, credit card interest rates, and more! Give it a shot.
Credit is a powerful thing. With high credit, your personal finance goals become much easier. You can get a lower interest rate, saving you tons of cash over the course of a loan, as well as better loan terms.
Building credit starts with responsible credit card spending. If you've never gotten a credit card for feal of debt, now may be the time to get one.
It's safer! When you use a debit card to make a purchase, you're essentially handing the merchant direct access to your bank account. Should the waitress at the restaurant you're eating at write down your debit card number or should your favorite grocery store experience a breach, that's direct access to your account and your money. Yeah you can file a fraud dispute with your bank and get your money back eventually, but in the meantime, that money is poof, gone.
Just use your card responsibly—obviously!
What better way to build wealth, increase your income, and prepare for retirement than advancing your career? Here's a subreddit dedicated to just that:
Don't sell yourself short! As one Redditor writes:
Going into the interview I was hoping/expecting that the range for the salary would be similar to where I am now. When the company recruiter asked me what my target salary was, I responded by asking, "What is the range for the position?" to which they responded with their target, which was $30k more than I was expecting/am making now. Essentially, if I would have given the range I was hoping for (even if it was +$10k more than I am making it now) I still would have sold myself short.
Key Takeaways: My Personal Finance Advice
I hope you've enjoyed this list of must-read subreddits relating to personal finance!
Whether you need help with retirement planning, student loans, increasing your income, reducing debt, or starting your own business to quit your job, there's something here for everyone.
Personally, here's what I gathered from these subreddits:
- Create a budget, or at the very least list out all your expenses. Cut what you don't want/need.
- Get credit cards and pay them off every month to build your credit.
- Talk about money openly with your significant other, and make a financial plan together.
- Don't just save your money; invest it. Don't let fear stop you.
- Get a crockpot and save money on eating out.
- Be aware of the full costs of something before you buy it.
- Don't be afraid to negotiate your bills.
I hope these help you take control of your financial future! If you want to learn more about personal finance and increasing your income, check out this guide on how to make money from home.