It's possible to spend hours on the popular forum Reddit, learning about everything from Japanese comics to raising chickens to the latest celebrity news. Did you know that there's also a thriving personal finance subreddit? While not every piece of advice shared is going to make you rich, the r/personalfinance page does have some gems. Here are our favorites from the website.
4 solid financial tips from Reddit
1. Write down what you spend
Of the most common financial questions asked on Reddit, questions about budgets seem the easiest to tackle. As it turns out, you don't have to have a complex budget system to see it make a difference in your money life. In fact, this advice from a user reveals that the mere act of documenting what you spend can have a significant effect:
"Definitely, the first step to budgeting is learning where your money is going currently. Once you understand that, half the time, your budget immediately shrinks simply by virtue of you being conscious of the waste."
2. Pay yourself first
For those who have money to save but aren't in the habit of doing so, taking those first steps can feel overwhelming. Where do you start? Redditors gave two important pieces of advice that most anyone can follow:
"The rule of thumb used to be 'pay yourself first.' You take 10% of your take-home pay and put it in savings. You could set up an automatic transfer, so you don't forget."
Those who can have their paycheck split into two or more accounts might find this the easiest to do since you can't spend money that doesn't ever hit your checking account. If you'd rather have the money in your hands and then put it into savings, this second piece of advice is a better fit:
"Savings should be a line item in your budget, just like a bill. All your bills get paid."
If you use a budgeting app or software, just set up one bill each month to be "savings" with a due date and a plan for moving the money. This way, you get an alert that it's time to tuck away cash for savings and can pay it like any other bill.
3. Don't ignore old bills
Especially in the case of healthcare, it's possible to get a bill from months or even years prior. Because health insurance follows a sometimes complicated and lengthy process for claims, surprises aren't uncommon. What should you do if you get a medical bill from long ago? It depends on the age and your insurance, but users had some helpful hints for those with unexpected doctor bills:
First, check to see if your insurance was supposed to pay it and if they still should:
"Verify if the bill is legitimate (i.e., for services you actually received). If it's legitimate, then make sure it was submitted to insurance before they billed you."
Because bills can slip through the cracks, they may not have even been sent to your insurance company, and that will need to be worked out between them. Just follow up so that you don't keep getting bills in the meantime.
What if you do owe the money? Will the bill just go away? Not typically:
"Statute of limitations for most debt is on the order of 5-7 years, depending on the state, so you're not going to find a legal way out of it."
"If it's a legit bill, and had been submitted to insurance on time, then you're on the hook for it….. Their failure to send you a bill for 1.5 years doesn't mean you don't owe them money."
If you find that the bill is legitimate and you do owe the balance, call the provider and see if you can set up a payment plan for paying down the bill over time. Just be sure you get permission to do this. Sending partial payments without an agreement could lead them to sending your bill to collections.
4. Ask for the right help
Finally, if there's anything to be learned from reading Reddit threads, it's that there is plenty of good advice but also a lot of bad tips. Strangers on Reddit mean well most of the time, but they are not financial professionals. Take any advice with care — doing your own follow-up research to be sure it's what it seems. If following advice could lead you to more financial or even legal issues, don't hesitate to reach out to a licensed legal or financial professional. Your money health is too valuable to leave to chance.