Comments on: Ask the Readers – What is Your #1 personal finance tip?

By: Make Friends, Earn Money

Make Friends, Earn Money — Thu, 19 Jun 2008 10:39:22 +0000

never buy extended warranties or extra insurance on consumer products, the likelihood of them going wrong in the first 2-3 is small and you are just wasting money.

By: glblguy

glblguy — Fri, 03 Aug 2007 17:20:45 +0000

Good one, that’s like the golden rule of personal finance.

By: MITBeta

MITBeta — Fri, 03 Aug 2007 01:17:55 +0000

Pay yourself first.

Corollary:

Start early.

By: glblguy

glblguy — Fri, 20 Jul 2007 23:24:07 +0000

Great tips guys. Come on everyone, what are your tips?

By: Ron

Ron — Fri, 20 Jul 2007 22:59:28 +0000

I’ll skip over the usual suspects like have an emergency fund, max out your retirement, use credit wisely, etc.

Here is something I have been doing for years. I save change left over from the day just like many other readers do, I’m sure. But I also save my dollar bills.

The key to this (so it becomes less noticable) is to spend your day to day cash normally. Don’t save back your dollar bills during the day. If something costs 50 cents, break the dollar. If you end up with no singles at the end of the day, oh well. But if you do, save them back. When I get around $50 or so, I deposit it in my online savings account.

I’ve never tracked this but I estimate I’ve saved several hundred dollars a year doing this and I never miss it.

Ron

By: ChristianPF

ChristianPF — Thu, 19 Jul 2007 17:51:46 +0000

Other than DISCIPLINE, which may or may not be considered “personal finance” I would have to say the most important thing is to understand how interest rates affect your money. Both on your assets and liabilities.

It is easy to forget, after reading PF information all the time, that most people do NOT understand the power of compound interest. Einstein called it one of the most powerful forces in the modern world (I don’t remember the quote exactly). Most people do not realize that time is the most powerful component when compounding interest.

Most people don’t realize how LITTLE money it takes to retire wealthy, if they just take advantage of the power of compound interest.