Top Personal Finance Tips for 2025
We all have to work with a limited amount of money, an that’s why it’s very important to stay wise when it comes to what you spend, what you save, and also how you manage your finances. Sure, some of us want to buy a car or a house and need a loan. Others just want to set money aside to travel and see the world. But it’s always important to save money, set aside as much as you can while also being more stringent when it comes to personal finance. That’s why we made a list with some of the most important tips and tricks for you to take into consideration.
Always try to create a budget
It’s very important to ensure that you know how to manage your money. And the first thing you need to consider is what and how you will spend everything. There are many budgeting methods, like the 50/20/30 method, for example, where you spend 50% on housing, food, utilities, and transport, 30% goes towards shopping and entertainment or other "wants", and lastly, 20% goes towards debt payments and savings.
Of course, you are free to adjust percentages the way you want or use another budgeting method. But it’s always a great idea to set at least 20% of your income aside because you never know when an emergency might arise. Being able to set a budget and ensure you handle everything correctly can help a lot more than expected. Plus, budgeting gives you the ability to track and identify unnecessary expenses. So, in the end, it will make it easier to save money, which is exactly what you need to pursue.
Set financial goals
In order to better manage your finances, it’s very important to have financial goals. For example, some people want to pay off their personal loans; others want to go on an expensive vacation or set money aside to buy a new house. Regardless of the goal, it’s a very good idea to have one. Not only will it bring you a narrow focus, but it also encourages you to avoid unnecessary expenses since you are building towards an important goal, and nothing will be able to stop you. Plus, it helps you make a habit out of saving money, which is extremely important to have.
Use a finance app
The reason why you want to use finance apps is because they give you direct access to your expenses. You can see exactly where your money goes, and that will make it easier to identify unnecessary expenses. Of course, it always depends on how much money you earn. But realistically, we all have expenses that we can get rid of and start saving some money.
The great thing about finance apps is they will provide you with tips and ideas on how to manage your budget better. They might even help you establish a savings account and save money. Thankfully, there’s no shortage of finance apps, and they can be a game changer if you struggle saving money or paying your bills. YNAB, Every Dollar, NerdWallet or PocketGuard are only a few of the many options available right now.
Avoid loans (especially high-interest loans)
If you want to stay financially stable, the last thing you want is to deal with loans. However, certain loans are unavoidable, like mortgages or car loans. However, personal loans like payday loans, for example, should always be avoided. They come with a very high interest rate, and a lot of the time, you’re overpaying for stuff that’s not mandatory for you to live a great life.
That’s the reason why you need to stay away from loans as much as you possibly can. Yes, they can be a great facilitator sometimes, especially if you want a new home or to start a business. But a lot of the time, loans can be very easy to avoid and that’s the thing you need to take into consideration. The more you focus on personal finance, the better it will be in the end.
Establish an emergency fund
Needless to say, emergencies can appear out of nowhere. And if you already struggle financially, figuring out how to deal with an emergency can be very tough. That’s why the best thing you can do is to create an emergency fund. You can do that via your bank since you can automate the process of saving 20% of your income directly to a designated account.
Of course, you can save as much or as little as you want. But the truth is, you always want to have an emergency fund ready to go. That’s because you can get sick, you might need money right away to pay for an unforeseen situation, and so on. The faster you tackle these problems, the better it will be. That’s the reason why you want to focus on establishing an emergency fund, to prevent any future worries!
Always ensure monthly expenses get paid right away!
If you don’t pay your monthly expenses on time, they accrue interest, and that’s the last thing you want to have. Realistically, the best thing you want to do is to pay your expenses as quickly as possible and ensure nothing gets postponed to the next month. Because if it does, it will be quite a struggle to deal with even more expenses. Stay on top of your expenses, and try to remove stuff that you just don’t need right now.
Sure, it would be nice to have access to many streaming services, but you don’t really need them. Focusing on paying your bills and food is crucial; other expenses outside of that can be avoided a lot of the time. Stick to your needs at first, and remove unnecessary expenses.
Set some money aside to travel
Traveling is great because it gives you the means to unwind, relax and just explore this amazing world we are living in. Realistically, you always want to try and set money aside for traveling, as it will help improve your mental health. Plus, who knows, you can access some extraordinary opportunities as well, and that’s always exciting.
Think about insurance
At first, you may think that having insurance doesn’t belong on a list where you try to save money and improve your finances. But as we said earlier, the truth is that emergencies can appear out of nowhere. And while insurance can be a monthly/yearly expense, it will help protect you from major expenses down the line. For example, if your house was burnt down, if you lost your car, having insurance helps you immensely.
Insurance brings peace of mind, knowing that any potential issues are covered. In addition, you can ensure that even if something is lost, damaged, or stolen, you still have a way to stay protected. A lot of people dismiss the importance of insurance until they need it, of course.
Educate yourself about personal finance
Another great idea is to try and read as many personal finance books as you can. The truth is that personal finance can be quite challenging to understand, and you don’t always know where to get started. Thankfully, there are plenty of books out there that can help you learn more about managing your money, how to invest, and so on.
Here are a few books you can use to get started, among many others:
- " Think And Grow Rich" by Napoleon Hill
- " The Total Money Makeover" by Dave Ramsey
- " Rich Dad Poor Dad", written by Robert T. Kiyosaki
- " Get Good with Money" by Tiffany Aliche
- " The Price You Pay for College" by Ron Lieber
- "Finance for the People: Getting a Grip on Your Finances" by Paco de Leon
These are only a few of the many finance books you can read, and they can have a very positive insight into managing your money. Realistically, there are tons of amazing books to consider, and all of them can bring valuable information. Educating yourself about finances and learning how and when to save, but also how to improve is what can help you get past many challenges.
Reduce those variable expenses
We define variable expenses as those things that change from month to month. Naturally, these are things like shopping, entertainment, and stuff that you haven’t really planned to buy at the beginning of the month. Fixed expenses, like mortgage, insurance, or loan payments, are strict and defined at the beginning of the month. Variable expenses are not, and that’s why you can usually cut them down.
Of course, you need to create a plan and focus solely on the essential stuff, at least for a while. Check the budgeting app you use, see what expenses tend to be the most common and which you don’t really need. For example, it’s cool to go to the movies 2 times per month, but it’s not a necessity. Paying your rent/mortgage is important, so not going to the movies will help you save money. Even if it seems like a simple cut, those add up, and you can save a significant amount if you just reduce some of the variable expenses.
Set priorities
We mentioned earlier that it’s very important to set goals, and that’s true. Yet, at the same time, we usually have multiple goals that we need to accomplish. And that’s why you have to set priorities and focus on figuring out how to handle personal finance issues and narrow down the best results. Once you set priorities, you will also find that it’s a lot easier to narrow down on something and obtain a great result, so use it to your advantage.
Everyone should have certain priorities based on what they require the most. For example, if you are a gamer and make money from that, it’s important to buy a better computer or console. However, if you love traveling, you may want to set money aside for a great vacation. Or maybe you want to set money aside for a home downpayment if you want to buy your own property soon. The thing is, you always want to set priorities because it can make a huge difference!
Start focusing on meal planning
What you’ll notice a lot of the time is that a lot of your income is spent on food. And that’s even more so if you have one or more kids. What you want to do is create a meal plan and focus on eliminating any way you’re wasting food. Meal planning is great here because it offers you the means to prepare your meals in advance and ensure you have enough to cover all your needs. Yet at the same time, it also makes it easier to avoid situations when you throw food. Start creating a meal plan yourself or follow one of the many meal plans you can find online.
Use the round-up function offered by your bank
If you pay pretty much everything with your card, it’s a great idea to use the round-up function to set some money aside. A lot of banks offer this option, and the way it works is for each payment you make with your debit card, the amount gets rounded up to the multiple you chose. That’s deposited in the round-up savings account.
Some banks even offer interest to the round-up savings account, so you can easily save money and even get some interest on top of that. For example, if you set the round-up option to $5, every time you spend something and it’s $3, $2 will be taken from your debit card and added to the round-up account. Naturally, the more you save, the more you will accrue, and it’s a good idea to leave it there, either for emergency purposes or for investments!
Conclusion
Using these personal finance tips is a great idea if you’re looking to improve the way you manage your money. It’s important to learn how to save, but also how to improve financially and ensure you’re not wasting money. Simple things like avoiding unnecessary expenses, using budgeting apps, and meal planning might not seem like much, but they will help you save a huge amount of money in 2025 and beyond!