13 Incredibly Easy Ways to Improve Your Finances

Incredibly Easy Ways to Improve Your Finances continues the series on Incredibly Easy Ways to Improve Your Life.

See here for what this series is about, and scroll to the bottom or click here for a list of other entries in the series. Also see the end of the post for details on submitting your own incredibly easy life-improvements.

Note: Some links here are affiliate links, meaning I get a small commission when you purchase them, at no additional charge to you. I only suggest things I honestly believe in.

Incredibly Easy Ways to Improve Your Finances

A lot of people are struggling financially now. And no matter how you’re doing, everyone would prefer to improve their finances.

A lot of ways to improve your finances are hard.

You could earn more money by getting a better job or working more hours.

You could save money by setting a budget or sacrificing the things you love.

But there are also ways to improve your finances that are easy. Or even incredibly easy.

Ways that take minimal ongoing willpower, effort, or time-commitment.

Note: This article was originally intended to be about incredibly easy ways to save money, but it ended up way too long. So I broke it up into three parts.

This week covers finances. Next week covers shopping. The week after is about utilities, automotive, and around the house.

If you have any incredibly easy money-saving tips, please suggest them so I can include them in upcoming articles.

Here are the 13 incredibly easy ways to improve your finances.

1. Invest your money in index funds without paying any attention to the stock market. (Assuming you’ve paid off any credit card debt.)

I previously wrote about this, so I won’t go into too much detail here.

I’ll just repeat the one sentence guide to investing:

Once you’ve paid off all your credit card debt, invest as much as you can in your 401k, and park your money in an index fund without paying any attention to the market.

If you want to know more, see the article.

2. Set up automatic deposits into a Vanguard account to buy index funds

Open up an account with Vanguard. You can do it online in a couple minutes.

Then set up automatic deposits into the Vanguard account for the day after your regular payroll, using the deposits to buy a mix of low-risk index funds and higher risk, higher return index funds.

The mix should depend on your own individual risk tolerance.

Do this instead of using a savings account.

3. Don’t use a savings account (for now)

When I asked readers to contribute their own incredibly easy ways to improve their finances, I was surprised by how many people recommended tips that involved savings accounts.

I suspect this is something they learned from their parents or older financial guidebooks. It’s advice that was helpful in the past, but no longer applies today.

Savings accounts were useful when they paid meaningful interest rates. Now that they pay approximately half a poop emoji percent, they’re pointless.

Savings accounts were useful when they paid meaningful interest rates. Now that they pay approximately half a poop emoji percent, they’re pointless.

Put your money in index funds instead.

(This may change in the future if savings accounts start to pay a meaningful interest rate.)

4. Max out your company-sponsored 401k match

If your employer has a 401k match, put as much money as they match into your 401k.

That’s an immediate 50% or 100% return on your investment.

You’ll never find another investment with returns that good.

It’s generally a good idea to put as much money as you can afford into your 401k, even beyond what your employer matches. But you absolutely should take full advantage of the match.

5. If a friend/relative messages you asking for money or personal information, ask them a random question

A common form of fraud is to message someone from a spoofed address/number/account claiming to be a friend or loved one, saying they’re in trouble and need money. Or saying they’re filling out some paperwork and need personal information.

While this is often a scam, sometimes it really is a friend or loved one.

The obvious first thing is to double-check the sending information to make sure it’s really coming from who it says it’s from. But even if everything looks legit, it still could be fraud.

An easy way to distinguish is to ask the sender an off-the-wall question that they would easily know, but a scammer wouldn’t. Something that couldn’t be found online or by searching e-mail or social media.

Like, “What did we have for dinner last night?” “Which of our pets smells the worst?” “What street was our grocery store on when we lived in Cleveland?” “Which Backstreet Boy did you have a crush on in third grade?”

6. Pay off your credit card in full every month

Always pay off your credit card in full every month. Always.

If you don’t, you rack up outrageous interest costs on everything you buy.

If you do pay it off, then there’s no interest charges.

Simple.

7. Get a rewards credit card

If you have decent credit, sign up for a card that offers rewards. There are many cards you can find that offer 2% back on everything, or 5% back on specific categories. This means that everything you buy is slightly cheaper.

And many of these also have sign-up bonuses. Some have annual fees, but the amount you save is much more than the fees, so it’s worth it.

Here are some I recommend.

(These are Affiliate links, but I genuinely believe these are great deals.)

Capital One Venture Card – 2% cash back on everything, 50,000 bonus points (worth $500) if you spend $3,000 in the first three months. $95 annual fee.

Discover Card – 5% cash back on rotating categories, 1% cash back on everything else. $50 statement credit sign-up bonus. No annual fee.

Chase Freedom – 5% cash back on groceries and Lyft, 1.5% cash back on everything else. $200 credit after spending $500 in first three months. No annual fee.

Also, once people start flying again, you should get the credit cards affiliated with any airlines you fly regularly. They often have amazingly good sign-up bonuses, offering 50,000 – 75,000 frequent flyer miles. Plus perks like free baggage and priority boarding.

I wouldn’t recommend getting them now. They usually have annual fees, so they’re only worthwhile for airlines you regularly use. And since you likely aren’t regularly using any airlines now, they’re a waste. But keep this in mind for the future.

8. Don’t use debit cards for everyday purchases

A common bit of bad advice given by finance gurus is to only use debit cards.

This is reasonable if you have a complete lack of self-control, and it’s the only way to stop you from spending more than you can pay off. But if that describes you, you’ve got more serious problems.

For everyone else, this is a terrible idea.

First, you’re losing out on the 2% – 5% discount you’d get from a rewards card.

Second, paying with debit cards often results in fees. While small, these can add up.

Third, if there’s fraud on a credit card, no big deal. They just remove the fraudulent charges and send you a new card.

But if there’s fraud on a debit card, that’s money that’s actually come out of your bank account. It’s a much bigger problem to recover it. And while you’re trying to do that, you don’t have any money to pay rent or buy groceries.

But there’s a bigger concern.

If you exclusively use a debit card and not a credit card, you’re not establishing a credit history.

This means that if you ever want to buy a house, finance a car, or take out a business loan, you won’t be able to.

No matter what your financial situation is and how much cash you have, a bank will go to look at your credit history, see that you don’t have one, and say, “nope.”

I have a friend who’s a well-paid medical researcher. But for 20 years he followed the terrible advice of only using debit cards. Now he has to squeeze his kids’ car seats into a crappy used compact and wait years to move his family into a forever home, even though he could easily afford better.

9. Set up automatic bill payments for recurring bills

You should be able to easily set up automatic payments for your recurring bills.

Things like rent/mortgage, gas, electricity, phone, cable, internet, car, insurance, etc.

Just log into the website once.

Or if they don’t let you do this from the website, set up a recurring payment from your bank.

Then you’ll never have to think about it, and never have to worry about late fees or late payments hurting your credit.

Even better – make the payment using your rewards credit card so you get a discount.

The one exception is your credit card bill.

10. Set a recurring time on your calendar to review your credit card statement(s).

Most bills are fine to automate, but you should review your credit card every month.

Both to see if there are any fraudulent charges, and to see if you’re spending too much in any category.

To make sure you don’t forget about this, set a recurring reminder on your calendar app at a convenient time for you. (Like, 8:00 PM on the third Thursday of the month.)

Make sure it’s at least a week before the payment due date.

Then you’ll be sure to pay, avoiding any late fees and interest.

Also do this with any other bills that need to be reviewed instead of paid automatically.

11. Refinance your mortgage and student loans right now

Current interest rates are the lowest they’ve ever been, and likely ever will be.

If you have a mortgage or student loan, refinance it with a lower interest fixed rate.

I admit that refinancing a mortgage may not be incredibly easy, in that you’ll have to put in a few hours of effort over the course of a month or so.

But that one-time investment of a few hours will save you tens of thousands to hundreds of thousands of dollars.

(And refinancing a student loan is incredibly easy.)

12. Don’t pay off low-interest mortgage and student loans early

Another common piece of advice which was good in the past when interest rates were high, but is bad now, is to pay down your debts early.

Once you’ve refinanced your mortgage and student loans to a low rate, pay according to the loan schedule, and no faster.

Money you use to pay down your loan is money you can’t invest. And investing that money in an index fund would pay you better returns than the interest rate on your loan. You’re losing money by paying early.

This also applies to strategies like rounding up your payments, or making 13 payments a year instead of 12.

I want to reiterate this point, because paying debts early is extremely common advice, which is very very wrong in the current world.

Often people suggest paying your mortgage every four weeks instead of monthly, or half your mortgage every two weeks. So you end up making an extra payment every year to pay your loan off sooner.

Do not do this!

Paying off low-interest debts with money you could have invested in an index fund will cost you a huge amount of money in the long run.

For example, if you have a $500,000 30-year mortgage at 3% interest, paying every four weeks instead of investing the equivalent amount of money in an index fund paying 10% annual returns will cost you nearly $300,000 (!) over the life of the loan.

13. Don’t get vision or dental insurance unless your employer is paying for it.

This is only relevant to people in the US. Everyone else, skip to the conclusion.

It’s important to have health insurance. But vision and dental insurance aren’t health insurance. They aren’t even insurance at all. They’re scams.

The point of insurance is to protect you in case of unexpected large costs. But your dental and vision costs are regular and predictable.

So the insurance companies figure out how much you’re going to spend for the year, and then charge you more than that.

And if you do have unexpected large costs – your kid needs braces, you stick a fork in your eye, or someone hits you in the mouth with a lead pipe – then your airquotes “insurance” doesn’t cover that. (Though the latter two would be covered by medical insurance, which is actual insurance.)

If your employer pays for your vision/dental insurance, you might as well use it so you don’t have to pay yourself.

But don’t buy it on your own. Just pay out of pocket from your FSA or HSA when you go to the dentist and optometrist.

I have an insurance broker friend that refuses to sell dental and vision insurance even though he’d make commissions off them, and even when his customers ask for them. Because he has too much integrity to sell his customers something that makes them worse off.

Follow these incredibly easy ways to improve your finances and you’ll be much better off

So there you have it. Thirteen incredibly easy ways to improve your finances.

Four items on the list are things to not do, and one applies to specific situations.

You should be able to do everything else on the list other than refinancing your mortgage in under two hours total.

• Open up a Vanguard account.
• Pick out a mix of low risk and higher risk index funds.
• Transfer your savings account into the index funds, leaving enough in your checking account to cover a month or two worth of expenses.
• Set up automatic transfers to the Vanguard account/index funds
• Enroll in your companies 401k to take advantage of any match
• Apply for rewards credit cards
• Set up automatic bill payments
• Put a recurring time on your calendar to review and pay your credit card(s)
• Refinance your student loans
• And then start the process of refinancing your mortgage

You’ll be in a much better financial position than you were two hours ago.

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Do you have any thoughts on the items on this list?

Or suggestions of others to add?

I’d love to hear from you.

If you have suggestions of incredibly easy ways to be happier, or any other ways to improve your life, please send them to me so I can include them in a future entry. You can comment here, e-mail stevenraymarks at gmail.com, or tweet/DM to @YourselfHelping.

Other entries in the Incredibly Easy series:

• The Incredibly Simple, One-Sentence Guide to Investing
• 10 Incredibly Easy Ways to Improve Your Health
• 10 Incredibly Easy Ways to Be Happier
• 11 Incredibly Easy Things to Stop Doing to Be Happier
• 15 Incredibly Easy Ways to Improve Your Sleep

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