There is a lot of advice on personal finance on the web but not all of it is useful. It’s important to learn how to make wise decisions when it comes to spending and saving money.

In this article, we show you 10 lessons on money, especially useful for when times are bad. We provide you with these tips so that you can improve your financial wellbeing and achieve long-term financial success.

Whether you’re wanting to get out of debt, or you paid your dues and are looking to invest, these ten lessons will send you on the right path.

1. Income isn’t everything

It doesn’t matter how much money you make, at least up to a certain point.

You need to have your basic needs met, and enough cash left over to build up your savings. But if you don’t cut back both your expenses and spending, you’ll likely won’t be in control of your finances.

This is because of something called the lifestyle creep. Also known as lifestyle inflation, lifestyle creep is when discretionary spending increases as your income does.

Imagine someone with a 6k pay raise. Instead of using that money to save or pay off their debt, they start thinking about the things they can buy with it. Maybe it’s a next-gen console or the latest iPhone.

Here’s why that’s not a good idea. You worked hard for that pay raise. There are people making six figures on a yearly basis and live paycheck to paycheck. They still have their student loans, car loans, or other loans pending. They haven’t come up with a plan on how much to save.

Don’t be like them. Set a percentage of your income to the side, dedicating 20% of your paycheck towards your debt or savings. Continue doing that even as you make more money. Or pretend you never got the raise to begin with and put that extra money into paying off your debt or putting it into savings.

2. Diversify your income

Consider starting a freelance business or side hustle.

Sometimes a lay off is a blessing in disguise. Being fired can lead you to create a profitable new business or freelance career. Even if you are currently employed, you can still generate a new income stream with a side hustle.

When it comes to expenses, there’s only so much you can cut back on, but freelancing and consulting could be the best ways to increase (or replace) your income. This can be done in a short period of time because there’s no ceiling to how much you can, in theory, earn.

You can easily find 5 to 10 examples of people making a full-time living in a particular field as a freelancer. If they can do it, you can make it happen as well. Most people have at least one marketable skill, whether it’s writing, filming, or teaching people how to organise their closets.

If you think you don’t have a skill that you can make money off of, then let’s get to the next point.

3. Invest in yourself

Invest in your personal and professional development.

We live in unprecedented times. Your parents didn’t have YouTube in school. There is a vast amount of books, courses and online tools at our fingertips, from free websites like Khan Academy and MIT OpenCourseWare, to paid content websites like Skillshare, Udemy and LikedIn Learning.

You can learn almost anything in almost any area. Whether it’s becoming an accountant or a video editor, there are several ways to increase your value to both employers and clients.

Suppose you are a creator. You may want to invest in a good webcam, quality headphones or software. It may not be so much about getting a return on your investment, but putting better quality content out there.

In the long run, while that may not be the original intention, it may turn out as just what you needed to do to get a return on your investment.

When you put your money into the right education, tools and resources, it can pay back in dividends.

4. Say yes to everything

As you progress in your career or business, you will naturally become more selective with the work you take on. But when you’re starting out, you need all the experience you can get. Now is not the time to be picky.

Ideally you want paid work, but if a worthwhile pro-bono work comes your way, you do it, as long as it’s an organisation or cause you believe in, or that you think your skills can help with.

You’re not above any type of work.

If someone wants you for a photo session of their new Yoga place, you do it. Then take the extra cash you made and throw it at your debt or savings plan. You’ll likely won’t need to take pictures of people in weird positions forever — unless you are in that sort of thing.

5. Move in with your parents

Move in with your parents or close family, even if you’re over 30 or 40.

If the thought of moving in with your parents is cringe, then find some roommates to help lower your biggest monthly expense: your rent. This may be one of the best financial decisions you can make early on to tackle your debt.

Since the 1960 in the US, the amount of young adults living at home has been increasing and it has hit an all time high in the past few years. This is a common occurrence in Europe as well.

Property prices are soaring, student loans are high, inflation keeps rising.

If you’re lucky enough to still have your parents around, this is going to increase how much you can pay off your debt or to invest towards a savings plan.

This doesn’t mean putting the financial burden on your parents. You can pay for food and utility costs and appreciate that you have parents willing to have you live with them.

6. Don’t buy what you don’t need.

Stop buying stuff you don’t need.

This ties up with the first point. Instead of buying things you don’t need, start putting that money into your savings, or use them to pay off any debt.

Buying things feels good. It gives us a dopamine rush. In 1978, researchers studied two groups of people: one of recent winners of lottery prizes and the other of victims of accidents who were now paraplegic. The study found that both groups, over time, reverted back to their base levels of happiness.

Pay attention to how you feel after some time you made a big purchase. Did it solve all the problems you thought it was going to solve? Are you any closer to happiness or fulfilment? How much closer would you actually be to happiness if you were instead to use that money to pay off that debt that’s been weighing you down?

Some patience and determination towards your finance goals can go a long way.

7. Track your progress

You don’t need to track every cent, but if you want to move towards your finance goals, you’re going to have to start tracking the important stuff.

Pull together the total amounts, monthly payments and interest rates for your debt into a spreadsheet. Check that more often than you do Instagram or TikTok even if you have nothing to add. Feel the pleasure of deleting them one by one as you manage to pay them off. This is a powerful exercise that can keep you motivated towards the finish line.

Perhaps you don’t have debts and you’re tracking your savings instead. That’s great. Feel all cosy inside when you add more streams of income and compound value to your sheets.

If you don’t like using a spreadsheet, there are apps you can use to track your finances in a similar way. The important thing is to get a bird’s eye view of your finances so you get a grip to where you’re headed.

8. Read one finance book a year

Consume at least one book, course or other resource on finance per year.

This isn’t just about taking in new information, it’s about getting and keeping educated about what is going on in your life as it relates to finances.

These don’t necessarily have to be finance books. They can be biographies of business people, of someone whose life lessons apply to your goals. Immerse yourself in the stories of people who have already walked the path before you, to help keep you on your track.

The point is to immerse in advice and knowledge that is useful. If people around you are buying the latest tech gizmos and living paycheck to paycheck, that’s not going to motivate you to be responsible.

There are a number of good books that you could read. Investopedia has a list of twelve recommended books on finance, including Rich Dad Poor Dad and The Snowball: Warren Buffett and the Business of Life. Missing on that list are The Psychology of Money, by Morgan Housel, and The Intelligent Investor, by Benjamin Graham, which we also recommend you read.

9. Go on an info diet

Consume less, do more.

What you put in your body reflects in your clothes, and what you hold in your mind shows in your life.

Sometimes we forget there’s an unfollow button on Twitter and that TVs can be turned off. Our culture has an influence over the decisions we make in life.

Unfollowing the bad influences can help cultivate a life feed that’s supportive and encouraging, instead of people reminding us of things we should have or done. On the other side of the spectrum, you can start by cultivating more of the content that goes towards your best interests — psst, follow us on Twitter ;)

The point is to consume less content to free more time for the things that really matter, and what you do consume to be quality content that gets you closer to your goals.

10. Celebrate your progress

Give yourself a pat on the back.

Becoming financially free doesn’t mean you’ll have to become a monk or eat oatmeal indefinitely. It’s important to celebrate and enjoy life along the way. Set milestones and rewards as you go from debt filled to debt free, or if you’re working towards your investing goals.

This point may read as a contradiction to earlier advice to save money instead of spending it. But spending money in your 60s is probably not going to be as exciting as doing it in your 30s or 40s. A nice bottle of wine or that vacation you’ve been holding off is a reward for your progress and good for your mental health.

Imagine your life free from stress about money, being able to quit an unfulfilling job or sorting prices from high to low when shopping around online. By celebrating those wins, no matter how small, you give yourself the motivation to keep going.

For the most part, becoming financially free is a slow process made up of twists and turns along the way. But the payoff is well worth the effort.