Top 10 Reddit Personal Finance Threads
If you've ever spent any time reading Reddit's personal finance threads, you know it's a goldmine of information. What do you mean by that? Because ordinary people ask ordinary questions about ordinary problems, and the answers frequently come from people who have already travelled that path.
Of course, there's a lot of information, so it can be overwhelming. Then there are those who crack jokes and make less amusing remarks. But take it from me: fellow Redditors can teach you a lot.
Do you have any doubts? Below you'll find some of the best
Reddit financial advice. But first, let's go over some Reddit 101.
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| Credit: Medium |
How to find personal finance threads on Reddit
I understand. The front page of Reddit appears to have been created by coders for coders. With terms like "r/," "upvotes," "downvotes," "threads," and "karma," it's a jumble of insider jargon.
When you first start, it's difficult to understand what's going on. But don't give up because the platform has a lot of potential. It functions as a well-organized message board where people with similar interests can interact.
The community curates all of the content, and members of the community upvote positive comments and downvote negative ones.
Subreddits: These channels focus on a specific topic, such
as Politics, Comedy, Uplifting News, Gaming, and even "Tinder."
r/"Topic" denotes a subreddit, so people like us
would "join" communities like r/PersonalFinance, r/Budgeting, r/FIRE,
and so on. The finance advice on Reddit is truly universal.
Upvote / Downvote: As previously mentioned, readers of a
thread can upvote or downvote a comment. The number of upvotes minus the number
of downvotes is the "score" shown between the up and down arrows.
Reddit awards "Karma," or points, to users who
receive a lot of upvotes on their comments and questions in an effort to
recognise big contributors.
Now that we've cleared that up, here are some of my
favourite Reddit personal finance tips.
10 of the best personal finance tips from Reddit
Again, there is a wealth of financial advice on Reddit. To
get you started, here are some of the best threads.
1. Creating a budget
"Please meal prep for the sake of your wallet."
Every Sunday, I spend about 2 hours cooking, cooking,
cooking. I make enough for my fiancé and me to eat lunch for the rest of the
week. It only takes two hours to complete! And there's something like $40 in
groceries. Even when I was really struggling financially, I would still go out
to lunch every day and spend $10-$15 per meal. That's between $50 and $75 per
week! Now I spend less than that to feed two people.
Nothing could be more accurate. It's all too easy to take
the easy way out and rely on delivery services like Seamless and Postmates, but
the truth is that food costs quickly add up and can prevent you from reaching
your financial goals, such as building an emergency fund or a sinking fund. So,
make a monthly meal plan and start putting money aside!
2. Always double-check your claims.
His credit card was set up to automatically pay the bill. I believe he was aware that he was paying it (I'm assuming), but I'm not sure he understood why. Or he forgot about it because I don't believe he gets physical bills in the mail and instead pays everything with his credit card automatically.
He's actually a very astute businessman. He budgets his
money, plans to retire next year (he's 56 now), spends all of his money on a
credit card to earn points, and owns about 14 rental properties.
I don't believe he's used dial-up in at least ten....fifteen years?
Yikes. This is a sting. With a gym membership, I've done this before. It's all too easy to forget about a monthly autopay expense that sneaks out of your checking account.
What is the most effective treatment? Every month,
double-check your bank statements. It will only take you three minutes and will
save you thousands of dollars. Unfortunately for this poor man, it cost him
$3,600, money that he could have put towards his retirement fund over time.
If you have any questions about a charge on your statement,
contact your bank. They can usually assist you in determining what it is. This
is a great Reddit personal finance thread to learn from because it reminds us
to pay attention to our bank statements.
3. Investing in high-priced items
"Monthly payments should never be considered. Make a deal on the final price."
Purchasing something on a payment plan can be a real pain. Most of the time, the terms are vague, and the most important piece of information for you – the final price – is almost never discussed. Consider the following example:
- Automobile dealership, "So, how much do you want to pay each month?"
- Agent for insurance, "Wow, your down payment is $XX, and your quarterly payments are $XX," and so on.
I'm curious as to what the final out-the-door cost would be.
"So, tell me what you can afford, and I'll see what I can do to help you. So, how much do you want to pay each month?"
What makes this so bad? Because a monthly payment cannot be used to compare apples to apples. Sure, they can make your monthly payment extremely low and simply extend your term indefinitely to increase their profits. Alternatively, you won't be able to compare that policy to another for insurance purposes.
When you're faced with a situation where you won't be paying
for a product or service up front, you'll need to get down in the weeds, do the
math, and figure out how much you'll be paying in total interest.
When you compare that to the cost of paying in advance or
the cost offered by a competitor, you'll see that what appeared to be a great
deal isn't so great after all.
4. Car leasing
"Learn how to do a lease calculation."
Not everyone is a good fit for leasing. In fact, for the vast majority of people, it's probably a bad idea. However, if you plan to lease, you'll need to understand how leases work and where the numbers come from in order to get the best deal. Knowing the numbers may even convince you that it's a bad deal and that you should avoid it.
Leasing isn't the cheapest way to drive a car, but if you're
going to do it, you should do your homework first. Leasing entails renting a
new car from a dealership for a set period of time. You'll make monthly
payments toward the car, and you'll sometimes have the option to buy the car
outright at the end of your lease period.
Monthly lease payments are typically lower than monthly car payments. As a result, you might be wondering what the problem with leasing is. The main disadvantage of leasing is that you are effectively paying with your hard-earned money to drive a car that you do not own. A car loan, on the other hand, allows you to accumulate equity in your vehicle.
The reality is that leasing is not a good idea for most
people; it gives you the right to drive but not ownership of the car at first,
and if you choose to buy the car at the end of the contract, the terms are not
always in your best interest.
5. Purchasing a pre-owned vehicle
"When buying a used car, stay away from these pitfalls."
You don't have to be afraid of car salesmen. Many of them are fantastic people who work long, hard, and honest hours to push cars. "When they get you in the back room, that's when they're going to try to screw you," my father warned me before dropping me off to buy my first used car.
If you think that's a joke or an understatement, you'll be disappointed to learn that it's neither. When you sit in the finance office chair, you must be as alert as a deer during hunting season. Here's how they tried to kidnap me, and I hope this helps at least one other person avoid being kidnapped...
The OP shares some really useful insights into the real
things to look out for when buying a car, similar to the Reddit personal
finance thread above about how to lease a car. Specifically:
You are not obligated to buy the extras they try to sell
you, such as alarm systems, electronics warranties, and so on.
Don't expect to be told everything about the car you're
buying if you don't ask.
As exciting as the process is, one must remain fully aware
of the tactics used by car dealerships at all times. Not all of them are
cunning, but they all have their own strategies for getting the most out of a
sale, and it's in your best interest to know what they are!
6. Is all of that dental work really necessary?
"Be on the lookout for dental con artists."
I paid $57 for a new patient exam, cleaning, and x-rays at a well-known chain. They discovered several cavities, for which I paid $600 to have them filled. I could only afford to do half of them at a time and planned to return to finish them later.
Meanwhile, I started a new job that included dental coverage. To complete the work, I went to a private dentist's office instead. They said I didn't have any cavities or problems with my teeth. To be safe, I went to a second office, and they said the same thing. To me, it appears to be a scam. Just keep an eye out.
Dentists provide excellent service, and we all require them.
However, as in many other fields, there are those who take advantage of visitors
who may not be familiar with the technicalities.
Be wary of finding a dentist on discount sites like Groupon,
as one Reddit user noted in a personal finance thread that a specialist from
there made false claims of cavities. If at all possible, stick with a family
doctor – someone you've known for years and can put your trust in.
Additionally, if you're having procedures done that aren't
part of your regular cleaning, always ask for an estimate, also known as a
treatment plan. You'll be glad you did, and you'll be able to use that
information during a second opinion with a different dentist.
7. Transitioning from a two-income household to a single-income household
"Should my wife give up her job and stay at home with
our child?"
We just had our first child a few months ago, and my wife announced at the eleventh hour, "I want to be a stay-at-home mom." That one caught me off guard. My wife, on the other hand, was making close to $100,000, so even though our bills appear to be in good shape, I believe I'm in for a significant lifestyle change.
This is a difficult Reddit personal finance question. Every year, many families ponder this. For many parents, having a baby is one of the most exciting chapters of their lives, and having one parent stay at home is a dream come true for a large percentage of families.
In the case of the OP's wife, she wanted to leave her job
and stay at home, but her income accounted for half of the household income,
making it a difficult and potentially risky decision.
Whatever a family decides, it is critical that they have a
healthy emergency fund (ideally up to a year's worth), that they create a new
one-income budget for the family, and that they consult their financial advisor
throughout the process.
8. A simple side hustle to begin
"Sell the things that no longer add value to your life."
It may not seem like $5 to $20 per item is worth the effort, but it adds up. We've been focusing on this at our house and have already made a few hundred dollars.
This Reddit personal finance thread is one of our favourites because it reminds us that we can make some quick cash by selling our unwanted items. Decluttering is a huge positive that can also have financial benefits in this age where we have too much stuff in our homes.
Sites like eBay and OfferUp make it simple to list your
unwanted items for sale. As the OP pointed out, it may not appear to be worth
the effort at first, but it soon adds up.
9. Financial tranquillity
"Stop obsessing over "the recession."
I'm seeing a lot of threads here about people wondering how they'll ever survive this horrible doomsday recession that's coming any day now...
The most recent recession was dubbed the Great Recession for a reason: it was more severe than previous ones. It felt even worse because it was largely based on a housing crisis, with people losing their homes due to ridiculous mortgages that they should never have been offered or agreed to in the first place. That brings me to...
Just be cautious. Are you currently living within your means? Great! Make sure your emergency fund is in good shape, then get back to work. If you're overspending, look over your budget and see where you can save money. Regardless of how the markets are performing, you should be doing this. Find a cheaper cell phone plan, cancel that $100/month cable bill, switch to a slower internet package, eat out less frequently, and so on.
"How about my investments?" Is it a good idea for
me to sell all of my stocks?" NO!!! Don't. Get. Rid. Of. Your. Stocks. The
only exception is if you are completely and utterly broke and have no other way
of getting money. In fact, in a downturn, buying more stock is the best thing
you can do! The term "bad market" simply refers to the fact that
stocks are on sale. Who doesn't appreciate a good deal? Again, I wouldn't
recommend purchasing unless you have the financial means to do so.
10. Overcoming your fear of a recession
One of my favourite Reddit personal finance threads is this one. If you've been watching the news lately, you'd think the end of the world was approaching. While it is important to understand what the analysts have to say about the possibility of a recession, it is also important to keep in mind that a lot of fear-mongering occurs on television.
So try not to be alarmed. Instead, concentrate on making
sound daily decisions that will protect you from the effects of a recession.
There are a variety of ways to prepare for a recession, as well as
recession-proof businesses to consider. You can avoid financial disasters in
the event of a recession if you plan ahead.
In conclusion, the r/personalfinance threads on Reddit are
fantastic!
As you can see, Reddit's personal finance threads contain a
wealth of information that can help you achieve some of your financial
objectives more quickly. Unlike other social networking sites, Reddit makes
good use of the power of community to brainstorm and solve some of the real-world
problems that people face.
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