Business Insider’s Tanza Loudenback has been reporting on personal finance topics for almost four years now. In that period, she’s spoken to numerous financial planners and experts.
So, it’s not surprising that she’s gathered a ton of knowledge on everything that has to do with overcoming financial challenges and effectively working towards money goals.
Now, she shares the top three tips she’s ever heard from financial planners.
The Debt Fireball Method
Almost everybody has taken on some form of debt to help them achieve certain life goals. However, a lot of people also find themselves buried in more debt than they can afford to pay at the moment.
This is where the debt snowball, debt avalanche or debt fireball method comes in handy.
While they go by different names, these methods all entail you to attack your debts with the highest interest rates first. Doing so would allow you to save on interest payments.
Loudenback particularly praises the fireball method though as it diverges from other methods in that it also prioritizes building your savings. This means that you should start saving first before moving on to paying off low-interest debts.
Setting Streamlined Priorities
Loudenback then spoke about Beyond Your Hammock founder Eric Roberge’s advice on using money as a tool for life. When helping his clients plan their future, Roberge asks them to visualize where they want their net worth to be in the next five or 10 years or whatever financial goals they have.
After they’ve come up with a list of short term and long term goals, he then urges them to determine which one they’d choose if they can only achieve one. Following this method would allow you to decide which expense or expenses your money should go to first.
It would also make it easier for you to adjust your plans and timeline depending on your priorities and capabilities at the moment.
Taking on Risk
Millennials are often afraid of investing because of the risk that comes with it. This fear and hesitation can be attributed to their experience with the Great Recession just over a decade ago.
Financial planners like Erika Safran of Safran Wealth Advisors are all for helping young people overcome their fears. Safran recommends sticking to a hands-off investing strategy, which means choosing diversified funds over individual stocks.
She also emphasized that investing small on wise investments is always better than investing none at all.