As the New Year approaches, it’s time to get smart about your money. Here is a top 10 list of financial resolutions to bring you into 2020. Forget about exercising more or becoming tidier. Get your financial house in order instead!

Sourced from: www.moneyunder30.com

1. Don’t pay off student loans as fast as possible

This may sound like a weird piece of advice for someone trying to get out of a daunting amount of educational debt. But there’s a way to use your debt as leverage to build more wealth than you could without it.

Consider taking the money you would use to pay off your student loan debt extra fast (you should still be making your regular payments, obvs) and invest it instead. By doing this, you can actually get a return on your money and have it on hand for emergencies, a new home, a car, etc.

But isn’t investing risky?

Yes, investing is inherently risky, but typically the returns outweigh the risks and offer you money that you can actually access. You can’t access your paid-off student loans, ya know?

2. Bank as much as you can afford to save for retirement (up to the maximum allowable)

Yeah, I know, you probably keep hearing this and you’re sitting there thinking (just like I usually do) I’ve got plenty of time to start saving for retirement—do I really have to start saving now?

Yes, you do. In fact, you should aim to have about a year’s salary saved by the time you’re 30. Why?

Compound interest, that’s why! If you start saving now, your money will make money for you, saving you from having to make higher payments later on to catch up.

If you’re lucky enough to have an employer that will match your contribution to your retirement fund, start now. Say you earn $30,000 a year and you contribute 6% of your pay each year and your employer matches 3% of that – if you start at 22 you could have over $40,000 saved up by the time you’re 30!

3. Be scared of consumer debt, but not credit cards

There are far more benefits to using credit cards (responsibly) than avoiding them.

I put off getting my first credit card until I was right out of college because I knew my spending habits weren’t compatible with all that credit cards can offer.

While this meant I didn’t have a bad credit score, it also meant I didn’t have much of a credit score at all, which was a serious hindrance when it came to getting a car loan and my own apartment.

If you’re like I was in college, and don’t trust that you’ll be able to save the meager amount of money you get from working a couple part-time jobs, there are credit card options that can work for you!

For those of you who are working on repairing or building credit, there are secured credit cards, or these cards recommended for people with average-good credit (660-719) and these cards for those with fair credit (600-659). You can also find ways to see if you’re pre-approved for certain credit cards before you apply.

Why shouldn’t you just stick with your debit card?

Debit cards don’t help you build credit (even if you run it as credit every once in a while), and there are a lot of benefits that credit cards offer that debit cards simply don’t, like car rental insurance and purchase protection.

4. Rewards cards are great but get the best one for your preferences and interests

After you’ve hopped aboard the credit card train, you may wonder which card to choose out of the seemingly endless possibilities. After taking your credit into consideration and eliminating the cards you probably won’t get approved for, the cards that are left will offer similar total rewards over the course of a year, so it doesn’t make a whole lot of difference which you choose.

If a card offers big signup bonuses, they usually make up this money by giving you less in rewards and vice versa.

When looking for a rewards card, it’s best to pick one that blends into your life (i.e. if you’ve got a Bank of America® checking account, then Bank of America® credit cards are a good deal), and they’re accepted almost everywhere you want to shop.

5. Move someplace cheaper to start saving money

While this may seem like an odd piece of advice for those trying to save money, there are a ton of cities out there in the US where you could be making a lot but spending little on rent.

Take South Bend, Indiana, home of Notre Dame, as an example. Number one on Money Under 30’s list of America’s best cities to get rich, they have an average income (with a bachelor’s degree or higher) of $71,829 and an average rent of just $720. That’s a lot of extra money to spend after paying for basic utilities!

Sure, South Bend may not be New York City, but that’s exactly why it could be great for some people looking to live large in a smaller city. (They have a population of 268,291.)

6. Sorry, but your house isn’t an “investment”

Most home buyers lovingly refer to their house as an “investment,” somehow justifying the large amount they pay towards a down payment and fixing it up. While it may be a great financial decision that gives you a place to call home, it is not an investment.

When you think of stocks, bonds, and even real estate that you don’t live in, you can mostly control when you buy and sell it. With your home, since it’s most important aspect is providing you and your family with shelter, you have a little less control over buying and selling willy-nilly, since you need it for your own well-being.

Also, if you never plan to sell your house, you can’t consider it an investment since there won’t be a time where you sell and get more from it than what you initially invested.

So, unless you’re a real-estate flipper, your house isn’t an investment.

7. Your car isn’t an investment either so go easy with auto financing

Cars lose value the minute you drive them off the lot and there is rarely, if ever, a time when you can sell your car for more than you bought it. Don’t buy more car than you can afford. Pay cash if you can, but if you need to get a loan, finance it in a way that lets you avoid a debt headache. In other words, make sure you pay it off while it’s still worth owning.

Some basic car buying tips from the folks at Money Under 30 are:

• Put 20% down so you avoid long loan terms.
• Know your credit score and what it means before you go to dealers.
• If your credit score isn’t great, get financing quotes from places other than your dealer, like a credit union

8. If you’re thinking of getting engaged in 2020, there are better ways to pay for the ring than through jewelry store financing

You’re probably pretty excited about getting engaged, and you should be! But, now it’s time to deal with the gnawing burden of actually paying off the ring you so lovingly picked out. There’s a couple of ways to go about financing an engagement ring that may make the process a little less of a financial hurdle.

First, try not to pay for an engagement ring through a jewelry store credit account. While initially, rates may be as low as 0%, after this promotional period ends, the interest rates are very high.

Check out jewelers like Blue Nile or James Allen, which are online jewelers that can save you a ton of money and have a large selection to choose from.

Also, consider alternatives to diamonds – they’re usually cheaper and tend to be conflict-free.

Many people consider paying for a ring with a credit card, which can be a good way to finance it, if you do so the right way.

Some credit cards offer promotions that give cardholders 0% introductory interest rates on new purchases for 12 months (sometimes longer).  Use WisePiggys rate finder tool to find 0% rate credit cards.

If you sign up for one of these credit cards right before you buy the ring and pay off the ring before the promotional period, this might save you the most money when financing.

If you know you can’t pay off the ring in this 12-14 month period, a personal loan, while it may seem costlier initially, can save you more money in the long run. Personal loans tend to offer interest rates that are substantially less than credit cards.

Try our personal loan finder tool to compare multiple rates, from multiple providers all in one place.

*An important caveat to both of these suggestions is that you have to have decent credit to get loans and the best credit cards.

9. Side hustles are great (but rideshare drivers earn less than you think)

Uber is a well-known rideshare side hustle. And plenty of folks make an entire living off of driving for Uber.

But, you’ve probably heard that Uber has run into a few problems in the past. So, if you’re thinking of becoming an Uber driver don’t let Uber’s promises of an abundance of extra cash fool you. There are plenty of considerations they leave out when they tell you how much you could make.

For a start, Uber or Lyft always get a substantial cut. When you sign up with Uber, they reserve the right to raise their driver fees whenever they feel like.

There are also hidden costs of driving professionally such as maintenance, self-employment taxes, gas, and tolls.

Yes, you’ll make some money as a part-time (or maybe even full-time) Uber driver but, depending on the state of your car, its gas mileage, and where you live, the costs might very well outweigh the rewards.

10. Being an adult is hard, but there are ways you can make it easier

Our friends from Money Under 30 offer some helpful tips to ease the pain of adult life, making it just a little easier (financially speaking):

• Pay yourself first. Make sure you’re working toward an emergency fund. You’ll thank yourself later.
• Live within your means. Don’t spend more than you earn.
• Plan for the future. You need to start building credit now so you can use it to buy a car or a house in the future.
• Set money goals. Start saving now for what you need (or want) later.
• Be patient. Saving money takes time, and you might not see the effects rights away. Don’t be discouraged.

Summary

If you’re looking to better your financial life, follow some (or even all!) of these tips, and remember that making money, saving money, and just learning how money works takes time, so be patient with yourself and know that it’s okay to have questions.

This article was originally published on Money Under 30. Read the original article.