5 Awesome Tips to Saving, Managing, and Investing Money that ANYONE Could Do

I was about 12-years-old and my older sister and I decided to go shopping at the mall. One of my favourite stores at this time was called Spencers, which was a store full of lava lamps, hair paints, fun costumes, and crazy furniture. We never bought anything in Spencers, we just wanted to look around. Our parents always told us to spend our money on things we need and not only on stuff we just want - and Spencers definitely had nothing we needed. But as "almost-teenagers", we felt like this store was one of the coolest places ever! It had black walls, crazy colours splattered all over, and truly funky stuff.

But... this day was the last day that I ever went to Spencers

My sister and I walked in and looked at the usual stuff. We checked out the new glow-stick glasses and the crazy life-sized lava lamp in the corner. Then we stumbled upon this super fuzzy red and black butterfly chair. My goodness was this chair super comfortable! A hideous colour, but super comfy! I decided wait and cozy up on the chair while my sister finished looking around. 

That summer I had been saving all my money so I could buy myself something super cool. Back when I was a kid, my parents developed a system to help us make a little chore money. If I did a chore - like feed the dog, make my bed, help with the dishes or set the table - and I would get a little gold star placed by my name on this board my mum made up for us. By the end of the week my mum would stand by the board, pen in her hand, and tally up all the stars and give us our allowance. Each star was equivalent to $0.25. So that means I needed to do 20 chores to get the $5 I was aiming for by the end of the week. 


By this point in the summer I had saved my $5 every week and had just over $100 to spend! It was crazy! I earned that money so I wasn't planning on giving it up on something frivolous. 

When my sister was finally done her browsing at Spencers she came over to me and said "oh my goodness, Britte you look so comfortable. You should buy that chair!" 

"Pssh! Come on Alyssa, I can't afford a chair like this!" I said back, "I am only a kid."

Alyssa laughed and reasoned with me, "yes you can, you see it is only $99. Haven't you been saving your money all summer? This would be something really cool to spend your money on."

She jumped back into the chair, leaned back, sighed one looooong sigh, got all cozy, looked over at me and winked. 

"hmmm." I wasn't too sure. 

"Come on Britte. You won't regret it!" 

"Ok fine. I'll get the chair!" I was pretty excited at this point. I was going to have the most cosy chair in the entire world! 

I went up to the cash register and the guy tells me that the chair is a final sale.

"No problem!" Like I was going to return a chair so awesome anyways.

I paid my money - all in $5 bills might I add - and walked out of the store. 

Then it hit me like a ton of bricks. 

I just worked my entire summer for that money and now it is all gone! No more "rich Britte"

Just like that I was back to being a broke 12-year-old kid. 

Anyone been in that type of situation before? I feel like spending all our money (and some) has become so commonplace now that we don't even think about it anymore. 

It bugs me that as a society we don't like to talk about money. We have no problem getting together with our friends and talk about the new diet we are trying or the issues we are having at work, but personal finances is almost a no-go zone in our culture. 

With that annoyance in mind, in the past couple months I have gotten together with my siblings and a couple friends every week for what we call "finance club." Every week we dive deep into one of the members finances, check their management strategies, and give suggestions of how they can make their finance situation better. We look up blogs and posts on how to manage our money better and we have learnt a lot! One of our members didn't know that their interest rate on their credit card was WAY higher then the rest of ours. Another realized that they could be saving tons of money on travel fares, as everyone else was. Another realized they need to lower their expenses, and another realized that they didn't know where all their money was going as they had very few expenses! We need to get out and talk about these things so today I plan to share with you a couple money managing techniques I have learnt over the years and within our finance club. Hopefully you can find a little gem in here for yourself :)


The tips:

1. The 80/20 rule. 

You have probably have heard of the 80/20 rule when it comes to your time. Spend 80% of your time on one thing that matters and 20% on stuff that doesn't. 80% of the time be "good" and eat healthy so that 20% of the time you can indulge in whatever you want to eat. Well, you can use this idea with your money as well. If you save, save, save and never spend, you will probably pop at one point, go shopping, buy tons of stuff that you don't need, then fret about your next visa statement all the way until the point that the money is due. It's better to have a budget for yourself, or a guideline you could say, of what you can spend on whatever per month. The 80/20 rule is great for that. Calculate 80% of your monthly income and reserve that for your expenses and savings, then calculate the remaining 20% and call that your "fun money." Some money gurus will take it even farther and make categories for all their finances including short-term and long-term savings, education, giving back, play money, etc. But I find that that can get a bit too much when starting out. Better to just have a simple guideline like the 80/20 rule. 

2. The classic. Save 10% of your pay cheque and NEVER TOUCH IT!

Yes, you heard me - NEVER TOUCH IT! This is a classic rule. I have heard many people tell me this in the past including my parents, family friends, and money gurus like Tony Robbins and T. Harv Eker. What do I mean by never touch it? I mean put it into an account that you can't see or access easily and honestly never touch it. This 10% will grow and grow and if you honestly never touch it, you will have a nice savings saved up in short order. 

Some people ask if they can invest their 10%. My rule of thumb is yes... but ONLY if it is a sure bet like real estate or something else that you know very well. Don't go using this 10% on stocks or any other volatile investment. The point of the 10% savings is to make it so you know that you will be OK even if all hell broke loose in your life. It is your safety blanket. It is your personal, saved-up retirement. It is that little voice in the back of your head that tells you everything will be OK when you decide to go back to school so you can change into a career that you actually love. I love that voice, don't mess with that voice!

Also, I find it easier to stick to this rule if you follow tip #3

3. Pay yourself first, and automatically. 

Paying yourself first is SO HUGE when it comes to savings. This is one that I struggled with when I first started saving money. Now, I have my bank automatically take my 10% out of my account at the beginning of the month a few days after my first pay cheque. It is automatic, it is done first, and so when my visa comes in at the end of the month I don't even have the money in my account to play with it is already gone. This has helped me tremendously with saving my 10%, and I recommend that strategy to anyone who wants to follow the 10% rule. 

4. Always pay your credit card in full.

It is a good rule of thumb to always pay your credit card in full. It comes back to bite you if you don't. It is so easy to just pay the minimum payment, but the problem with that is that you then think you have more money then you do and spend more. Then you end up not being able to pay off your credit card and you decide to avoid it and hope it goes away. Believe me, it doesn't go away. Just spend the money that you have.

5. Use your debt ONLY if the purchase will increase your revenue in the future.

If you need some extra money for a large purchase that will increase your revenue in the future, that is when you can use your debt. I like to use my line of credit for those types of purchases. For example, if you want to buy a new fancy couch and use your line of credit - probably not a great idea. Better to save until you can afford the couch, then purchase it. BUT if you want to put a new fancy couch into your apartment that you are planning to AirBNB, and this couch will add value to the whole apartment so you can charge people more to stay there, then go ahead and use your credit! The interest that the bank will take will probably be paid off by the value creation due to the purchase, so why not use someone elses money?

There. Just a few tips on saving and managing money. If you have some tips that you want to share please post them in the comments below and I will bring them to my next finance club meeting ;) Also, let me know if you like this as I have tons of more tips and tricks and would love to share more if you want them!


With love,