52 Best Ways to Improve Your Personal Finances
What follows is our comprehensive list of the 52 best ways to improve your personal finances. From making more to spending less, and every avenue in between, here are ways you can take control of your finances!
Table of Contents
1. Spend less money
First up on our list of the 52 best ways to improve your personal finances is spending less. Spending less money is simple, just not easy for many. One simple way to improve your finances immediately is to spend less money. There are many methods that follow to help you achieve this. The math is simple, if you spend less than you do now, you will have a surplus of cash to better improve your finances later.
2. Make more money
Here is another strikingly obvious way to improve your finances. This one is slightly harder than spending less, but still important. Be it through starting a business, pursuing a side gig, or asking for a raise, there are many pathways to increasing your income. Remember though, it requires time and perseverance no matter what you choose. With more money comes more security, assuming you don’t inflate your lifestyle to meet your new income.
3. Start a side gig
Side gigs are a great way to pursue more money. They are such a good avenue for improving your finances that I have written a post on the 10 Best Physician Side Gigs. Many of these are just as applicable to everyone as they are to doctors. Create a digital product, blog, invest in real estate, create an app, and more! There are so many ways to use a side gig to generate more revenue and help cultivate multiple streams of income. Starting a side gig is one of the most important 52 best ways to improve your personal finances.
4. Invest
Investing should be at the top of everyone’s list. It is single-handedly one of the most straightforward ways to put your money to work for you. I personally use Vanguard for my investments, but for anyone with excess savings after maxing out their retirement…invest it! I recommend utilizing low expense ratio index funds, but there are millions of avenues to invest.
5. Max out your retirement accounts
Maxing out your retirement account(s) is one of the most fool-proof and effective ways to save. No matter the retirement account available to you, it is always sound advice to contribute the maximum limit each year. Your future self will thank you.
6. Get the employer match
If you do not contribute enough to receive your employer match (if offered) then you are leaving money on the table. Oftentimes, employers will offer contributions to employees who also contribute a certain limit or percentage to their retirement accounts monthly or annually. It is unwise to not capitalize on this offering. It is essentially free money!
7. Create a budget
Budgeting competed for the top position on this list of the 52 best ways to improve your personal finances. Having a comprehensive, honest, and transparent budget is essential to cultivating an environment of financial wellbeing. This is so important that I have created a FREE budgeting spreadsheet that I personally provide to each and every individual who subscribes to The Motivated M.D.! If you have not built a budget for yourself…this is priority number one! Subscribe to our newsletter, get your free budgeting spreadsheet, and get started. The sooner you review where your money is going, the sooner you can take control of your finances. You can subscribe using the location to the right of your screen or the bottom of this post!
8. Read these books
There are many incredible personal finance books out there, how does one know what ones to read? Look no further, I have already done the work for you. I have compiled a list of the 5 Physician Finance Books that I Recommend. This is a non-exhaustive list of books that can help you get started, or maintain, your financial education. Pursuing continued education is the best way to take control of your finances!
9. Subscribe and follow personal finance blogs
Now, I may be a bit biased here being a personal finance blog myself…however, personal finance blogs provide an endless stream of applicable content straight to your inbox. Not to toot my own horn, but our site has grown exponentially over the past year, and I encourage you to join so many others who have subscribed to our newsletter. After you have done that, make sure to check out the Best Personal Finance Blogs, a post I wrote previously on the all-around best of the best when it comes to personal finance. Also, for my physician colleagues, make sure to check out the Best Physician Finance Blogs! Hopefully this helpful post on the 52 best ways to improve your personal finances convinces you to sign up for our newsletter!
10. Comment on financial forums
OK, now that you have subscribed to some of the Best Personal Finance Blogs, now is your time to interact with the communities that support them! One of the best aspects of following a personal finance blog or website is that they often come with passionate audiences. Often forums, or the comments section at the end of a post, allow you to interact with the author and others enjoying similar content. What is great is that often you can post comments anonymously and thus retain privacy when asking nuanced questions that may be applicable to your financial situation. This can be a great way to improve your financial knowledge.
11. Cut out the coffee
There are a few things we all do that add to our day-to-day expenses. Look, I enjoy a well-made coffee just as much as the next person. As a practicing physician, I basically run on caffeine. However, I have found that the coffee I brew at home is just as effective as the coffee from a drive-thru. The difference…about $10. If you get drive-thru coffee most days of the week, it adds up. Do yourself a favor, cut out the coffee. You will very likely save hundreds of dollars. Make your coffee at home. Save your money. Being more self-reliant with eating make our list of the 52 best ways to improve your personal finances…more to follow!
12. Eat out less
In the same vein as coffee, is eating out. There are times when going out, or having a ‘financial dinner date’ are necessary. However, eating out regularly has many side effects. For one, it is expensive. Depending on the options available to you, it can be unhealthy too. The process of cooking can be time consuming, but you have more control over what you put into your mouth. Further, you can budget and save leftovers. Speaking of left-overs….
13. Meal prep
One of the best ways to eat healthy and save money is to prepare meals. For my wife and I, we meal prep on Sundays. That is our day to relax, cook, and go to bed early. We generally cook for dinner, prepare a slow-cooker meal, and meal prep another larger meal. We freeze the majority of what we cook so we can have easy meals later in the week. This is a simple way to save time later when it can prove difficult to make dinner. Depending on your grocery shopping, this can always be a great way to save money by buying in bulk.
14. Exercise regularly
This may not directly improve your finances, but a healthy body and mind will keep you sharp and focused. There are decades worth of literature highlighting the importance of regular exercise. Make sure when you are focusing on your financial well-being, you don’t forget your physical, mental, and emotional well being too. Take 30 minutes each day and be active. Your wallet will reap the benefits of healthier eating and preventable healthcare expenses later in life.
15. Pay with cash
Don’t think you have the self-control to use a credit card? Don’t worry… you are not alone. Many use credit cards when they do not have the money to pay off their debt. I understand this is the point of credit, but for many, it can lead to financial turmoil. If you believe your credit card habits are keeping you in debt, ditch the card and pay everything in cash. Honestly, this is an exercise we all should do. Handing over each individual dollar of our hard-earned money can feel much more impactful than swiping a card. You can’t spend what you don’t have.
16. Hire a financial advisor
I could write multiple reasons you should both hire a financial advisor and fire your financial advisor. However, I recognize that there is a subset of the population that either feels overwhelmed with their finances or just don’t care. If this is you, then it likely is worth your money to higher a financial advisor. However, who you hire should contractually acknowledge their fiduciary duty. It is also encouraged that they be reimbursed by the hour, not based on assets under management (AUM). The AUM model has a tendency to cause a conflict of interest. If you want to know more, check out When to Hire a Financial Advisor!
17. Relocate to a lower cost of living area
Cost of living can be a major factor influencing your finances. Across the United States, there is wide variation in cost of living. For those in need of a radical change as well as a quick fix to their finances, moving to a lower cost of living area can be an effective way to drastically reduce your expenses. Understand that these decisions are not made lightly. Relocation comes with new employment, distance from friends and family, and new climates. However, cost of living should always be a factor worthy of consideration when looking to improve your finances.
18. Live on half of what you make
If you are someone looking to expedite financial independence, or just feel like you need more financial ‘wiggle room,’ then living on half of your take-home pay can help you achieve this goal. This may seem like a radical exercise, and it likely is to most, but hear me out. If you struggle with spending, have not built an emergency fund, are living paycheck to paycheck, then it can be hard to break free of the rat race. Downsize your life, cut unnecessary expenses, and work to live on far less than you make. I have picked half as an arbitrary number. However, this exercise can be applied to living on 75% or 80%. No matter what you choose, leave yourself substantial financial wiggle room and your wallet (and psyche) will thank you.
19. Get a job with a pension
Here’s another easy one, get a job that offers a pension. Though I am simplifying the concept, certain employers will offer regular retirement payouts to employees based on the number of years worked. Many government positions offer pensions. Though you should prioritize maxing out your retirement accounts annually, pensions can offer another avenue to supplement your retirement. This can lessen the burden of savings necessary to reach retirement goals.
20. Pay off your credit card debt
Please oh please do not carry credit card debt. Yes, credit cards serve a much-needed purpose, but the individuals who truly benefit from credit cards are often those who understand the importance of not carrying a balance. As the saying goes ‘if you can’t afford it in cash, then you cannot afford it.’ This is no different with credit cards. Every day customers are making purchases they cannot really afford using credit cards. The interest rates are astronomically high and actively work to keep you poor. Do not buy into the mainstream. If you choose to use a credit card, make sure you always pay your balance in full immediately when it posts. This way, you never accumulate interest and you benefit from rewards.
21. Stop using a credit card
Let me go a step further… Stop using your credit card. If you are an individual who struggles with credit card debt, or feels reliant on credit to maintain your lifestyle, then stop. Stop using a credit card and just use cash. Force yourself to only utilize what you have. Pay off what remains of your credit debt then keep the card strictly for emergency purposes. Force yourself to no longer be reliant on the ‘credit card culture.’
22. Automate your savings
I have stood on this soapbox for a long time now, and I remain resolute. Humans and their pesky emotions often get in the way of logical ideas and financial strategies. We are pushed and pulled by our ‘wants.’ Automating your savings, or ‘paying yourself first,’ is arguably the best way to help yourself to do the logical thing and save! Do yourself a favor, automate your retirement contributions. Automate your credit card payments and your investments too. Completely remove yourself from the equation. This way you are investing in your future without even thinking about it. Your future self thanks you.
23. Cut unnecessary cable expenses
Wake up…it’s 2023, cut the cord already. Cable is a thing of the past. Today, our home entertainment is largely streaming. Cable companies charge high prices and work to bundle this with high-speed internet and landlines. Do not succumb to the trap! There are options to only pay for high-speed internet and then you can decide which streaming services are appropriate. It will save you money.
24. Cut unnecessary streaming services
Streaming services own the market now. Smart devices and TVs are plastered with Netflix, Disney Plus, Hulu, HBO Max, Apple TV, etc. Each and every one of these networks carries different ‘must watch’ movies and shows. Here is the benefit of streaming services…you can cancel subscriptions when you are finished! Have a show you want to watch? Or a sports game? Just purchase the service when you need it, then delete it as soon as you are finished watching. This may seem like chump change, but we all know we pay for streaming services we rarely use. Cancel these subscriptions…you’re not using them.
25. Review your recurring payments
It is actually incredible how many recurring payments we fail to recognize. Think about it for a moment, streaming services are recurring, certain podcast memberships, internet services, smartphone apps, the list goes on. Take the time to sit down and review your last few banking/credit card statements. Keep track of the recurring payments and determine if you are still using those services. Cancel what is no longer necessary, the difference may surprise you. Catching your recurring payments is an overlooked way to save money and is worthy of a place on our list of the 52 best ways to improve your personal finances.
26. Download a budgeting app
For those who do not wish to build their own budget from the ground up, there are two things I recommend. First, I highly recommend that you sign up for our newsletter at the bottom of this post! Just by subscribing you will receive our FREE budgeting spreadsheet! This is a tool I have poured weeks into perfecting just for you. It can help you better understand where your money is going and help you take control of your finances. However, for those who do not like spreadsheets or do not wish to create their own budget, then there are some great budgeting apps out there. Here are a few I recommend:
Each of these apps can help you get on the right track as you follow the 52 best ways to improve your personal finances!
27. Downsize your home
Our homes can be a substantial portion of our monthly living expenses. Be it strictly the mortgage payment or furnishing, heating, cooling, and maintaining a large home…it gets pricey. For those not looking to relocate to a lower cost of living area, sometimes downsizing your home can be a great way to save money. For individuals or families with kids who have left the nest, you no longer need a larger home. Save yourself the money and downsize. It will yield savings in a multitude of ways.
28. Start a business
In a prior post I wrote called Can Doctors Be Filthy Rich we looked at ways physicians can move from wealthy to fat FIRE. One of the best ways for anyone to grow their income is to create a business. Unlike being employed, owning a business affords you control on scale and income. For individuals who create something valuable, as your business grows, so too does your income. From passive income to lucrative side gigs, starting a business can be a great way to put your income generation into overdrive.
29. Create an emergency fund
This may be the single most important way to improve your finances on our list of the 52 best ways to improve your finances. An emergency fund is critically important in guarding against financial disaster. No one expects to get in a car accident or to have their HVAC fail, but it happens…all the time. If you are caught unprepared, you could be on the hook for tens of thousands of dollars. For individuals who do not have a large line of credit or an emergency fund, this can devastate personal finances. Unexpected expenses can even force individuals to take out debt. Do not put yourself in this situation. Build an emergency fund of 3 to 6 months living expenses that you only utilize for emergencies. If you want to know more, check out Emergency Fund: Your First Financial Goal.
30. Create an opportunity fund
OK, so you have created your emergency fund, maybe you still have some extra cash lying around. What to do with it? It is important you are maxing out your retirement and investing intelligently, however luck is where preparation meets opportunity. I advocate for the keeping of an opportunity fund if you already have an emergency fund and maintain stable financial footing. This is basically a liquid amount of money held in preparation for a lucrative financial opportunity that requires upfront capital. This may be to purchase stocks at a discount during a recession or depression. This fund may be used for the purchase of a rental property, needing a down payment. Whatever the opportunity, it is nice to have a fund prepared.
31. Cultivate passive income streams
Everyone wants to make money while they sleep. For the vast majority of the working world, this will never happen. However, there are ways to generate multiple revenue streams through passive income. I feel so strongly about this I have written an extensive post on the 8 Best Passive Income Ideas for Doctors. Again, many of these passive income streams are applicable to non-physicians as well. Understand that for almost all of these passive income ideas, revenue is not generated quickly. However, the sooner you get started, the sooner you create the potential for continuous cash flow.
32. Diversify your cash flow
Just as important as creating passive income, is diversifying your portfolio in general. It is good to protect yourself against losses in any financial sector. It is this reason many advise a diverse stock and bond portfolio. When it comes to assets, you should do the same. Invest in real estate, create a passive revenue stream, build a digital product or blog. Any and all of these avenues make you less reliant on your primary profession and thus more financially secure. Diversifying your cash flow is one of the more lucrative ways to earn more money on our list of the 52 best ways to improve your personal finances.
33. Travel less
Vacation travel is important, but costly. If you find that your finances are strained but you take multiple vacations a year, it may be time to re-explore how and why you travel. This could come in the form of less vacations or going to less expensive destinations. This could also come in the form of better budgeting your trips to save money on the front end. No matter how you incorporate travel in your life, there is often room to tighten the purse strings.
34. Cut your own lawn
Though it may save you a few hours on a weekend, until you have the financial flexibility to outsource your unwanted labor, save yourself the money and do it yourself. One of the most common ways to save a few extra dollars is to no longer pay someone else to cut your lawn. Carve out the time, save the money, and do it yourself.
35. Clean your own home
Cleaning and yard work can seem monotonous, but for the majority of individuals who pay others to do their unwanted tasks, rarely do they have the funds necessary to afford this and still intelligently invest their money. Where I live, on average a cleaning is $150 every two weeks, that’s $300 a month, which is $3600 annually! To put that in perspective, $300 invested monthly, compounded annually, with a real rate of return of 4% over 20 years would be $107,201.08! So, there may be better uses of your income. Just clean your own house for a while.
36. Prepare for tax season early
Prepare for tax season early. Often, we are limited by when our tax documentation is provided to us. This usually occurs in late December and early January. However, the earlier you prepare your taxes, the better. There is money to be saved and anxiety to be abated for those who tackle their finances early. Get your paperwork together, budget, and even hire an accountant if needed.
37. Hire an accountant
Hiring a professional to review and handle both my personal and professional expenses was one of the best things I ever did. Accounts help in more ways than you realize. For me, opening an LLC while simultaneously having a dual physician household became cumbersome. An accountant can often save you money in the long run. There are nuances and complexities to each individuals’ finances, but an accountant can be a great way to keep your financial life in order.
38. Take a risk on more volatile assets
There are some more lucrative ways to generate supplemental income, however they often require more risk and upfront capital. If you have created an opportunity fund and you feel like you understand a company’s trajectory, then invest in more volatile assets. For those who understand that no investment will guarantee you a certain return, investing in small start-ups or angel investing can be another route to increase your revenue and diversify your income.
39. Start saving for your children’s education
As much as I would love for my children to get full scholarships to college and beyond, I realize that may be a lofty expectation. In the least, I would be a fool to assume this when I could be protecting against unexpected expenses later in life. Like stocks, real estate, and so many other great investments, education is arguably the most important. Start saving for your children’s education the moment they are born. Let slow savings and compounding interest work for you. This way, come their teenage years, they are financially supported to reach their goals.
40. Create a financial plan
Financial plans are the blueprints for your financial freedom. Having a well written financial plan is key when it comes to the 52 best ways to improve your personal finances. Navigating your finances without a goal in mind can be anxiety provoking. Financial plans provide direction on how to best utilize your finances. When you steer of course, they can help get you back on track. This exercise forces one to realize what is important to them, and how their money can be better spent creating financial security and maximizing happiness. If you want to know more about financial plans, check out How to Write a Financial Plan!
41. Have regular financial dinner dates
One of my favorite things my wife and I regularly do are financial dinner dates. I have written a lot about how my passion for personal finance can be…too much. Though my wife loves and supports me, I can be a bit overwhelming when it comes to our finances. Therefore, aside from blogging, we decided the best way to discuss our financial trajectory would be over dinner. Though it is not a weekly or monthly occurrence, we do make time each year to go out to dinner with the goal of discussing finances. Though our conversations may periodically stray from money, we seek to catch up, support, and discuss our financial plans. This has been an enjoyable way to make sure all parties involved agree with the family’s financial direction.
42. Teach your kids about money
Teaching your children about money can not only reinforce your knowledge; it can save you money down the road. Children who understand how to use money wisely may be less reliant on their parent’s resources later in life. Helping your kids understand the value of a dollar is critical to cultivating an environment of fiscal responsibility. Do your children a favor and regularly educate them on monetary responsibility. I have written a great post on the 11 Money Lessons For My Children, start there!
43. Negotiate a raise
Asking for a raise can be a daunting task. Taking the time to sit down with your supervisor and ask for more money is never enjoyable. Some promotions are time gated (i.e., you can only ask for a promotion every two years, etc.). However, generally the worst that can happen is ‘no.’ So, what have you got to lose?
44. Switch to a credit card with better rewards
Though I advocate for intelligent use of credit cards, for those who pay off their balance in full, then use of rewards is a no brainer. Determining which rewards are best for your lifestyle can be tricky. Though travel miles may seem a great option for those who vacation frequently, I have found that cash back cards are essentially ‘free money.’ I personally use the Citi Double Cash card which offers 1% cash back when you purchase and 1% back when you pay off your balance. For my family, we are getting 2% back monthly since we never leave a balance on our card!
45. Calculate your net worth
Sometimes a well realized calculation can be crucial to understanding your own finances. The first time I calculated my family’s net worth (all assets minus all liabilities), I quickly realized that I was much poorer than anyone I knew. I was poorer than individuals who have nothing! I only partially exaggerate, but individuals who have nothing but the clothes on their backs are at least breaking even! When my wife and I started to tackle our debt, we had $670,000 in medical school loans to repay, that left us with a net worth of negative half a million dollars! Learning your real net worth can be a strong motivator. Calculate yours and watch as it improves alongside your finances.
46. Pay off your student loans
If you are anything like me, educational debt can weigh heavy on your shoulders. There are many reasons to pay off educational loans as efficiently as possible. Be it pursuing PSLF or refinancing to your lowest rate possible, there are many different avenues. I will not begin to say which path is best for you, it is nuanced and based on the individual. Still, eliminating debt quickly will open up income that can then be utilized elsewhere. Check out How We Paid Off $209,000 of debt in Two Years!
47. Cancel your gym membership
Gym memberships for certain individuals are fine. But for many, just like television streaming services, you pay the subscription fee and rarely use it. If you are one of these individuals…cancel the membership. Further, it can be difficult to exit a contract with a gym, if this is the case for you, remember this the next time you think about signing up. There are a million other ways to be healthy and active at home or locally without a monthly fee.
48. Take up an inexpensive hobby
You know what they say about idle hands… We can all benefit from having a hobby or interest we pursue on the side. For me, I combine my hobby (personal finance writing) with my side gig (blogging/creating a niche website). I get to exercise my passion while working to turn a profit. For others, playing sports or exercising, cooking, etc. Hobbies are important and fulfilling. Yet, there are some hobbies that can place unwanted stress on your finances. Boating, for example, is expensive. Flying planes can also be an expensive hobby. Take some time exploring inexpensive interests and hold on to your hard-earned dollar.
49. Sell your unwanted items
With the evolution of Facebook, Ebay, Etsy, and many more, it has never been easier to sell things online. If you have an excess of unwanted items lying around your home, kill two birds with one stone. Declutter your house and also make some extra money!
50. Save for the holidays year-round
The holiday season is full of love, family, and friendship, but it can also be an unwanted burden on our wallets. With the expectation to give, it can place stress on already tight budgets. I have decided to save for the holidays year-round. Similar to automating your finances, there are ways to automate your holiday savings too. This way, when the giving season rolls around, you are prepared with a fund to pull from and do not have to pressure your tight budget.
51. Calculate how much you need to be financially independent
This determination may not directly affect your finances today, but it can be motivating to create another goal. Figuring out how much you need to be financially independent is a great exercise. This calculation is important as it will both help you determine your saving needs while helping you define how much is enough? Reaching our FIRE number is not only about income generation or savings, it’s also about learning to live below our means. True you can calculate your FIRE number by multiplying your planned annual living expenses by the number of years you expect to be retired. However, you can also play with the numbers and see how it may affect your finances: if you paid your mortgage off, traveled less, spent less on restaurants, etc. All of these factors influence this number, and all of these factors will help you better understand your finances and your goals.
52. Reframe your financial progress
Much like you, occasionally I set goals and do not achieve them. Sometimes, I set goals and achieve them, but not in my original time frame. This can feel defeating, when in reality, it shouldn’t. Life is full of changes, setbacks, and course corrections. When life throws up barriers, how we adapt speaks volumes about our ability to persevere. So, the next time you set a goal and don’t quite reach it, don’t beat yourself up! Reflect on your life, the year you have had, the challenges you have faced, and celebrate the fact that you pursued that goal in the first place! Be grateful for the ability to work and reach financial goals! Celebrate your successes and reframe your failures!
Now you can conquer all of the 52 best ways to improve your personal finances!
Take home points
Whew, that was exhausting… For those who made it this far, congratulations! I understand that many of the recommendations listed above may not resonate with all. However, if even one or two of these affords you extra income, less financial anxiety, or a business idea, then it has served its purpose. There are numerous ways to improve your finances, some require frugality, some require sweat equity, and some require a bit of luck. No matter how you approach your finances this year, try to incorporate the above 52 best ways to improve your personal finances and you are sure to find success. As always…
Stay motivated!
The Motivated M.D.
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