These choices have helped me keep my finances intact.
There are many decisions I've made in life that I'm not proud of -- like the choice to buy an ultra-cheap first car that practically blew up on me following a minor accident. Or the choice to run a marathon knowing full well that my existing knee problems would increase my risk of injury.
But when it comes to my finances, I've actually made some decent choices (not including the aforementioned first car fiasco), and I'm sharing them in the hopes that other people may be inspired to go a similar route. Here are four moves that have served me pretty well.
1. Not buying a home at the top of my price range
Back when I was looking to buy a home, I set a budget so I knew what listings I could afford. And during my search, I was tempted on more than one occasion to buy a home at the very top of my price range. Technically, I could swing the associated mortgage payments and costs. But rather than go that route, I chose a home whose purchase price was a good $50,000 lower than my maximum spend. By opting for a less expensive home, I had more wiggle room to tackle renovations shortly after moving in, and I also encountered a lot less stress when my property taxes went up -- a lot -- within a couple of years and I wasn't able to get them lowered.
2. Not racking up credit card debt
I've been using credit cards since my college days, and I've even, on occasion, maxed one out. But I'm happy to say that I've never carried an actual credit card balance that accrued interest -- I've always paid my bills in full when they came due. Doing so has saved me a world of money, and it's also helped me maintain a good credit score. In fact, when I applied for my mortgage, I was able to qualify for some of the best rates because my score was in such decent shape.
3. Building an emergency fund
From the moment I got my first job in high school, a little voice in my head urged me to stick a chunk of my earnings into the bank. And throughout my adult life, I've made sure to have emergency savings. In my case, that's enough money to cover about six months of living expenses, though some people can get away with more like three months' worth. That emergency fund has, in turn, come in extremely handy for things like car repairs and house-related issues. It's also saved me from racking up debt and wasting money on interest charges.
Let's be clear: I've made my share of financial mistakes in life. (Did I mention my first disaster of a car?) But I'm really happy I made the above moves, even if it wasn't always easy.
Alert: highest cash back card we've seen now has 0% intro APR until 2025
If you're using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.
In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.
Our Research Expert
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2023 The Ascent. All rights reserved.