One thing that’s amazed me since starting this blog was the breadth of knowledge of the money blogging community, so, rather than keep all these new insights to myself,  I thought I’d ask them to share their top financial tip with you.

A key feature of many posts is about financial education and what people wish they knew earlier. Many want to stop others making the same mistakes they did and pass on the knowledge they have learnt to others. Lots of these top financial tips are really straight forward and easy to follow, but could significantly improve your financial affairs.

I have asked fellow bloggers to share the top financial tip they wish they knew earlier in the hopes you can benefit from their wisdom.

This is the third post in the series. The first two, July and August, have proved very popular. I hope this post will be equally informative and interesting for you and will give you some new insights.

Here are this month’s top financial tips:

Tracy from Mind over Money Matters

Give yourself a pay cut

My top financial tip is to give yourself a pay cut. It sounds daft right but hear me out. Taz and I are over 50 and are looking at how we want to retire. The years fly by – in my twenties, thinking about retirement was not even a thing. If I could go back 30 years and give myself one piece of financial advice it would be this:

Set up a standing order for 10 percent of your salary every payday to leave your account as soon as your wages hit. Set up another account for this 10 percent to go into. Get used to living within your means on that (slightly) smaller amount. You can do it. If it is not there you won’t even notice it, let alone spend it.

Whenever you get a bonus or unexpected cash. Put half, yes half, straight into this other account.

What do you do with this other account? That’s the fun part. You put it to work. You invest. For the long term. For your future. There are many options for this money, make it work for you. Keep it entirely separate from your ‘everyday’ money.

How much would you save without noticing?

In 30 years you’ll be glad you did this. I’d love a £200k pot right now!

Scott from The Grumpy Git

Be aware of the power of pound cost averaging

The top financial tip I wish I knew earlier was the power of pound cost averaging. I couldn’t invest in an ISA when I lived in the Isle of Man (where I worked in financial services), although I did via Hargreaves Lansdown when I moved to Edinburgh in November 2013.

I have spread monthly contributions over a selection of investments that I have hand-picked based on my own research. It’s often referred to as pound cost averaging. have periodically amended my contributions based on what I have seen as trends, and my ISA has gained more than 20% even in the midst of a global pandemic.

I worked for Baillie Gifford on a short-term project which gave me a fascinating insight in to the world of investments. Baillie Gifford are based in Edinburgh and their research and philosophy is fascinating. They have a proven track record with investments for everyone.

Problems and Projects

Live on last month’s income

I spent most of my twenties working low paying, variable income jobs.  I’ve always tried to be mindful of where my money goes and have some  emergency cash on hand. It was virtually impossible, though, to plan for my expenses when my unpredictable income could vary by as much as $1,000 every month! The top financial tip I wish I’d known earlier was to start  living on last month’s income.

Here’s the gist. You set your budget and pay all your expenses for a given month using the money you earned the month before. So, September’s income pays October’s bills. My financial life changed drastically when I saved up enough to start doing this.

Suddenly, I could set a budget, plan for low pay cheques, and pay off  debt faster. I stopped over-drafting, paying late fees, and stressing about my money.

One of the best parts of living on last month’s income is always  having a built-in emergency fund. If my circumstances change, I can alter my budget and give myself 5-6 weeks to create a new plan. I  started managing my money this way about 7 years ago, and I’ve never looked back!

Dan from The Financial Wilderness

Assess the long term value of financial decisions

I wished I had learned earlier to assess dispassionately the longer term value of what something would do for me, rather than getting distracted by the exciting!

A good example was when setting up my student bank account – the lead choices were an MP3 player with HSBC or a 3 year student railcard as the best perks on offer for otherwise similar accounts.

Now, I happened to desperately want an MP3 player at that point, and think I had imagined in my head this would be equivalent to a shiny IPod so I leapt at it. It wasn’t. It was a cheap rubbish one that was difficult to use and broke in 2 months.

With the money I’d have saved if I’d have gone for the railcard, I could have got myself a luxury MP3 player of my choice anyhow. D’oh! Always calculate the benefit (and make sure you know what you’re actually getting, not what you think you’re getting!)

The Loaded Pig

Prepare before making financial decisions

If I could tell my younger self some words of wisdom, I would say to take the time to learn before making financial decisions. At 18, I applied for financial aid and accepted the student loans my school said I qualified for.

My loans had an interest rate of 8.7%, which I didn’t know was a high interest rate at the time. Looking back after paying them off, I wasted thousands on interest. When it really came down to it, I was unprepared to make the financial decision to get student loans.

I recognised that some money lessons you have to learn the hard way, but if you do it right it can put you on a better path. Since then I learned a lot about personal finance and how to manage my money. Most importantly, I learned how to do extensive research before I make a financial decision so that I am fully prepared.

When it comes to credit cards, I have never accumulated high-interest credit card debt because I pay off my balances in full each month. I earn cash back and my high credit score has saved me a significant amount of money. Before my boyfriend and I bought our house last year, we scoured the internet to learn everything we could about the home buying process and mortgages.

We ended up with an exceptionally low interest rate, low monthly payment and a home that we love. Looking back, the key was simply educating ourselves before we took that major financial step.

Jim from Wallet Hacks

Focus on the ‘big’ money issues

I wish I knew to start focusing on bigger money issues once the smaller ones were pretty well handled. When you first start earning money, it’s important to focus on remaining frugal, paying off any debts, and get your “house in order,” so to speak.

However, after a few years, there’s only so much penny-pinching can get you. You’ve cut the cable, reduced your expenses to cut the fat, so now it’s time to focus on the things that will move the needle in your financial life. These are things like negotiating a raise, making sure you invest properly, and look towards wealth building.

If you found this post interesting, please like it and share across social media or send it to your friends. I’d also love to hear your thoughts and experiences, so please leave a comment! What’s the top financial tip you wish you knew earlier? Also, please get in touch if you’d like to be included in a future post. I’d love to hear from as many different points of view as possible!