About five years ago, I started a job that paid me double what I’d been making. At that point, my finance experience was limited to a basic “money good, overdraft bad” mentality. So, I needed help figuring out how to make the most of the bump. After googling things like “What are mutual funds?” and “What is the difference between a 401k and an IRA?,” I took a break and started scrolling through Reddit, as I am wont to do, and I came across the Personal Finance subreddit.
On that particular day, the top post was about the pros and cons of online banks. In the post, hundreds of people were talking about how happy they were switching from their traditional brick and mortar banks to online, locationless banks like Ally because of the much higher interest rates they offered.
After reading through all of the comments, and actually looking at the rate I was earning from my Wells Fargo account versus the rate I could be earning at an online bank, I took the plunge and opened a savings account at Ally.
As of 2018, Wells Fargo’s Annualized Percentage Yield interest rate is between 0.01 and 0.03 percent, Ally’s is 1.60 percent. That’s a huge difference!
At the end of that first year with an online savings account, I had earned $116 in interest. And it was all thanks to Reddit.
Since then, whenever I make any kind of financial decisions I consult the almost 13 million people on r/personalfinance. Because the community is so big, no matter where you are in your life and how much money you have, there are resources for you.
Aside from answering questions, the subreddit also compiles advice. For example, they have guides separated by age range. I regularly consult the page for so-called “older young adults” (ages 25-35), which covers everything from if you should file your taxes jointly when you get married, how to get a home loan, and 401ks.
With all of those resources in mind, here are some of the best pieces of advice I’ve used in my own life and/or plan to use in the future.
Budgeting
I started a Mint account in 2010, but it wasn’t until a couple of years ago and I read redditor TheJMoore’s Budgeting 101 post that I fully understood how to set a budget. He breaks everything into categories and even provides a spreadsheet to start your own tracking of expenses, savings, and flex money.
Credit
For a long time, I had a actual fear of credit cards. I had seen too many movies and Dateline reports about people who had messed up their credit and then paid for it the rest of their lives. I was not going to be that person. So, up until about three years ago I exclusively used my debit card. Well, as we all know, the only thing that can trump fear is love—or jealousy. So, when a friend of mine became one of those people who uses credit card points to travel constantly, I checked reddit for advice on using a credit card the right way.
I learned how to build my credit from non-existent to the 786 I’m currently rocking. I learned which cards had the best perks and how to monitor my credit score, all from people who were in positions like I was.
Debt
I have zero debt.
Wait, I said that wrong.
I HAVE ZERO DEBT!!!!!!!
A lot of that is luck, but a lot of it is planning. Getting out of debt is going to be different for every person because everyone is going to owe to different places. Getting out of debt from a student loan is different than getting out of debt because of identity fraud or inherited debt. Luckily, Reddit has resources for all.
I highly recommend reading through the sections here, but also using the search function for your particular debt situation. You’ll find tips that can make your burden a little bit lighter.
Investing
I’m going to be completely honest here: Aside from what’s in my IRA account, I don’t invest. I know it’s something rich people do with their money. So ipso facto, if I want to be rich, I should start investing. So, that’s what’s next for me.
When I was choosing my IRA, I looked over r/personalfinance’s investment overview to start formulating a plan. So I’m going to start there for this next financial leap as well. Before I risk any of my money, I want to fully understand what I’m doing. I want to understand the difference between lump sum investing and dollar cost averaging. I want to know which bank or fund provider is going to take the smallest amount of fees. I want to hear and learn from the experiences of others so I make choices for myself with the most information possible.
r/personalfinance gives me that ability. For the first time in my life, when it comes to money, I feel confident.
