Skip to main content

6 personal finance tips

Allen Wastler

Posted on January 09, 2023

Allen Wastler is a former financial journalist with over 30-years of experience, including time at CNBC, CNN, and Knight-Ridder Newspapers.
Woman on couch working on laptop
Magnifying Glass Icon 
This article will ...

List basic money management tips and debt practices that are the building blocks for better personal finance habits.

Point out the wisdom of having financial backstops and protection to provide a safety net.

Advise you about the advantages that working with a financial professional can provide.

Good personal finance habits are essential to wealth building and financial security, not only in good times, but also challenging times.

“There are always going to be downturns, setbacks, and challenges that shake our confidence in how we manage our money,” said Paul Golden, spokesman for the National Endowment for Financial Education.

A good money foundation helps maintain that confidence. But what is possible and makes sense in a financial plan will likely differ from individual to individual. Still, there are basic guidelines and principles that are beneficial for most people.

They include:

  1. Keeping to a budget
  2. Paying bills on time
  3. Saving consistently
  4. Managing debt
  5. Having adequate protection
  6. Using professionals

It's important to know the particulars of each area and how they possibly relate to your own circumstances.

1. Have a budget

The first is, simply, to have a budget: a running account of what you are making, spending, and keeping over time. Many people don’t. For example, one poll found that nearly a third of respondents didn’t follow a budget.

“Budgeting is by far the most emotionally and mentally challenging hurdle of a financial plan, but also the most important because everything starts and ends with cash flow,” said Douglas Collins, a financial planner with Fortis Lux Financial in New York. (Learn more: Budget essentials)

And having a budget may help enforce financial discipline. As paychecks grow with time and circumstances become more comfortable, many people and families allow their spending to grow as well.

A budget is a reminder about priorities and goals. Indeed, a FINRA Financial Capability Study reported that people with household budgets, including an emergency fund, are somewhat more likely than those without to be spending less than their income.

2. Pay bills on time

Being late on bills results in late fees, damaged credit reports, and, in worse cases, legal trouble.

“The most expensive thing someone can do is not pay bills on time,” said Collins. “Late fees, interest expenses and other charges can easily add up to a few thousand dollars per year or more. Essentially ask yourself, if this item cost 30 percent more, would I still buy it?”

Being on time may result in a better credit rating, which generally makes it easier to get mortgages and loans.

3. Have a savings plan

The importance of savings should be obvious ― you will get old (barring sudden misfortune) and life will throw unexpected expenses your way.

However, research from various sources indicates that many people fall short in terms of savings. Census data, for example, indicates that only about half (49.5 percent) of millennials (ages 24 to 39) own a retirement account. And FINRA’s research found that only a little more than half of Americans (53 percent) have more than three months’ worth of readily available savings set aside.

If you find yourself in such a situation, establishing an emergency fund should probably be the first order of business. (Learn more: Emergency fund fundamentals)

Beyond that is having a plan for retirement. That may include taking advantage of retirement plans that may be available through an employer, which often offer additional matching funds, as well as individual savings and investments. And, whether you are just starting out or trying to build up retirement savings later in life, it’s never too late to start saving. (Calculator: How much should I save for retirement )

In determining your savings plans, also remember to guard against inflation and be mindful of taxes. Keeping your emergency funds in low-risk accounts and retirement funds in tax advantaged investment accounts may be one way to help mitigate such issues.

4. Avoid high-interest debt

In 2022, those households that reported carrying debt have an average credit card balance in excess of $5,000.

While some types of debt are positive in the long run, mortgages for instance, debt that carries high interest rates, like credit cards, tends to eat away at personal finances. (Learn more: Good debt vs. bad)

That’s because the interest charges, over time, can add up to an outsized bill. For instance, if you spent $50 on take-out using your charge card, but take more than five years to pay it off, the meal actually cost you over $1,000.

So many financial professionals and experts advise people to stay away from high-interest consumer debt and avoid carrying a credit card balance. If you already have a consumer debt load, consider drafting a plan for paying it off. (Learn more: Credit card debt fixes)

5. Have protection measures in place

It’s not enough to build wealth and financial security. Once you have it, you need to protect it. That’s where insurance comes into play.

Health insurance, along with insurance for property like your car and home, are protection measures often taken for granted and, in fact, required by law to some extent.

Life insurance may help maintain financial security and stability for your family should something happen to you. Indeed, according to 2022 statistics compiled by life insurance researcher LIMRA:1

  • There are about 106 million consumers who say they need life coverage, but do not have it, or need more of it.
  • Forty-four of all households would feel adverse financial impacts within six months if a primary wage earner died.

Most adults, 3 in 5 consumers according to LIMRA, own some type of life insurance, mostly through their employer but also individually. But one in five of those people don’t believe it’s enough. (Calculator: How much life insurance do I need?)

Disability income insurance should also be considered as a way of helping to provide income should misfortune strike and you become too sick or injured to work. The Social Security Administration points out there is a one-in-four chance that a 20-year-old today will suffer an illness or accident that will keep them out of work at some point in his or her career.3(Calculator: What would a disability do to my finances?)

6. Use professional help

Money matters today can get complicated, especially for those who, perhaps using the suggestions above, have built wealth and started accumulating assets for themselves and their families.

And the rules and laws governing finances ― from taxes to loans to college savings ― can change in a matter of election cycles. That’s why it’s wise to consider working with a financial professional to obtain guidance and investment management that is up to date and aligned to your financial interest and goals. (Learn more: Working with a financial professional)

Such a relationship can also provide some motivation to keep up your personal finance regimen.

“Moving past a financial professional’s job of having the technical knowledge of personal finance, a professional is akin to a personal trainer,” said Collins. “Think of all the people who sign up for a gym membership in January and print out a workout routine from the internet to do on their own. The vast majority start out great going three days a week, then a little less, then not at all.

“However, those who commit to a personal trainer, set clear written down goals, and hold themselves accountable to another person not only keep exercising, but get the results they were looking for. A good financial professional should fill that same role.”


These are simple and, to some, probably the most basic steps. And, as noted earlier, their importance and applicability may differ from person to person. But for most people, it’s the philosophy behind the actual financial steps that are important ― the motivation to make oneself financially secure.

“Preparation and practicing fundamental behaviors is key: use a budget, have an emergency savings—start with something small like $500—use credit responsibly, understand bank products and the services you engage in, and have a plan and save for the future,” said NEFE’s Goldman. “Everyone is capable.”

Everyone is. They just have to take the steps.

Learn more from MassMutual…

Need a financial professional? Find one here

4 ways for families to boost savings

First job financial checklist


1 LIMRA, “2022 Life Insurance Barometer Study,” April, 2022.

2 Social Security Administration, Disability Fact Sheet..

Need a financial professional? Let us know ...

* = required

By submitting this request, I agree to receive e-mails and phone calls using automated technology from MassMutual, its financial professionals, affiliates or vendors on its behalf regarding MassMutual products and services, at the e-mail address and phone number(s) above, even if it is for a wireless phone. I understand I can contact a local financial professional directly to make a purchase without consenting to receive calls from MassMutual.

The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.