The Most Popular Content on Reddit Personal Finance

Reddit Personal Finance is the most comprehensive place for top-notch personal finance advice on the internet. 

In this guide, I’ll show you why Reddit personal finance is the best and give you a tour of the most popular posts and topics.

I’ll close out with recommended readings, the 30-day money challenge, and what you should AVOID on Reddit personal finance

Why Use Reddit Personal Finance?

Reddit is called the front page of the internet. It’s THE place for personal finance. In fact, Reddit single-handedly created a personal finance phenomenon.

In the past, we reach for our remotes to watch significant events on TV. But today, we reach for our phones to read about big events on Reddit.

So it’s not a surprise that Reddit’s traffic has steadily grown. Today, Reddit’s search volume on Google is more than CNN and Fox News combined.

And it’s only going to get bigger.

Reddit Personal Finance is not Facebook

Unlike other social media platforms (Facebook, Twitter), Reddit users can both upvote AND downvote content.

Reddit measures popularity NOT by its virality – and that’s a good thing. Popular content on Reddit has not only the most number of upvotes but also the least number of downvotes.

Popularity on Reddit requires the content to be BOTH interesting and NOT controversial because it must gather the most number of lovers and the least amount of haters.

This minimizes the number of fakes news becoming popular on Reddit, precisely the opposite of what is happening with Facebook and Twitter.

Reddit Personal Finance is Anonymous

With certain exceptions (like a celebrity doing an AMA), Reddit users are always anonymous.

Anonymity allows more people to say the truth because there’s no need to promote or exaggerate in order to sell or to maintain a brand. As a result, Reddit users often share their deepest, darkest secrets without pretense.

Of course, Reddit isn’t always useful or positive. Anonymity creates bullies. The mob effect of social lynching without due process is scary. It’s vital that you learn when to use Reddit and when to avoid it.

The Subreddit that Started It All: r/personalfinance

The personal finance subreddit, r/personalfinance, is the original and still the best place to get personal finance advice.

With over 12 million subscribers, this subreddit has information for everyone no matter your age, location, or financial situation.

Want to get your financial house in order? Need to manage your money better? Looking to invest in your future? You can find your answer.

But r/personalfinance is poorly organized and which makes many hidden gems hard to locate.

This is why I’m organizing and presenting below the best of the best, the quintessential personal finance resources from r/personalfinance.

Enjoy!

The Six-Step r/personalfinance Makeover

The most frequent personal finance question is, “I have [$x] money, what should I do next?” or “how should I handle my debt or money?”

Reddit has created a six-step financial makeover that best answers this question. The plan looks like this:

This six-step plan is so comprehensive that if you master this, you are 80% complete in taking control of your money.

Let’s go over six steps below, and you can read more in the links provided.

Step 0: Make a Budget, Reduce Expenses, and Set Goals

You can’t manage your money unless you know where it’s going.

A budget helps you understand the inflows and outflows of cash. So the first step of your finance journey should be to create a budget.

A budget also enables you to reduce expenses as you identify where you are overspending. Lastly, a budget allows you to set a goal and track it from month to month.

Read my guide to learn how to build a budget worksheet and set financial goals.

Step 1: Build an Emergency Fund

An emergency fund is a relatively liquid sum of money that you don’t touch unless something terrible happens.

For most people, an emergency fund should be six months of your monthly expenses.

If you want to feel safer, have an emergency fund that you can live off of for a whole year.

The only exception to this rule is if you have high-interest debts – we are talking about greater than 10% APR debts.

If you have mortgages with high-interest rates, save $1,000 in your emergency fund and immediately focus on paying off your debt first.

Step 2: Employer-Sponsored Matching Funds

After creating a budget and building your emergency fund, you want to maximize any employer-sponsored match next.

The employer match is free money for your 401K, simple IRAs, 403(b) plans, 457 plans, or Thrift Savings Plans.

For example, if your employer offers to patch 100% of your first 6% of the contribution, you should contribute at least 6%.

If you don’t have an employer-sponsored match, move onto step 3.

Step 3: Pay Down High-Interest Debts

After taking advantage of your employer match, you want to use your extra money to pay down your high-interest debts.

We define high-interest debts as any debts with interest rates above 4%.

A 4% interest rate also happens to your early retirement withdrawal rate and tends to be correlated with the growth of our conservative investment.

So if you have debts with interest rates higher than 4%, then it suggests that in the traditional case, it’s better to pay off the debt first.

You should follow the avalanche method and pay off the debt with the highest interest rate first.

You still want to pay the minimum possible on the rest of your debt, but work extra hard on the one with a higher interest rate.

If your interest rate is below 4%, feel free to pay the minimum required payment. However, you want to invest or save the rest of your extra money and not spend them. Also, never, ever stretch out a loan to improve your credit score – it’s not worth it.

Step 4: Contribute to an IRA

The next step is to contribute to an IRA.

There are lots of exceptions to this, though, including prioritizing saving for higher education expenses, maximizing your 401K or investing in other unique pension plans first.

There’s also the possibility that you won’t qualify for an IRA because your income is too high (above $133K for single, above $196K for couples).

For some employer-sponsored 401Ks, your mutual fund choices are limited and may not contain enough low fee funds.

Whereas with an IRA, you can access any mutual fund you want, including the best ones from Vanguard with the lowest management fees.

Step 5: Save More for Retirement

After you’ve funded an IRA, if you still have money you want to put away for retirement then you should go back and maximize your 401K.

If you are self-employed, look into opening an Individual 401(k), a SEP-IRA, or a SIMPLE IRA for this step.

If you are not self-employed and your employer does not sponsor a retirement account, you will need to use a taxable account for this step.

It’s also worth asking your employer to consider providing a 401(k) or at least a SIMPLE IRA.

In total, you want to save 15% to 20% of your gross income for retirement.

After you leave your job, you can do a rollover of your 401K into an IRA where the fees are typically much lower, and there is more freedom to choose mutual funds that best fit your needs.

Step 6: Save for Other Goals

Once you have done steps one through five, you have two paths to consider. First, you can decide to save even more so that you can retire early (see the advanced methods below for hacks to accomplish this).

Alternatively, you can save more to reach other goals in your life, from paying down your mortgage, car loans, to funding for your kids’ educations or a luxury vacation.

Detailed Flowchart of the Six Steps of Financial Makeover

Reddit broke this six-step financial plan into a much more detailed flow chart.

Follow this flowchart in its entirety, and I guarantee you will be more financially successful than the majority of Americans.

The above flowchart mainly applies to people living in the United States. If you don’t live in the United States, different versions of the flowchart can be found for other countries below:

• Australia
• Canada
• European Union
• New Zealand
• United Kingdom

BONUS Step 7: Backdoor and HSA

Once you’ve completed steps one through six, three major advanced hacks will accelerate your investment like no other. These three recommendations deserve their guides so I won’t go into the details here.

Here’s how the hacks work:

1. If you’re over the income limits for a Roth IRA, you can pursue a backdoor Roth IRA to do step 4.
2. If you have a high-deductible health plan (HDHP), a health savings account (HSA) can allow you to save money without paying taxes. PRO TIP: you don’t have to use the money in your HSA on healthcare.
3. Lastly, if your 401(k) or 403(b) plan allows after-tax contributions (this is different than making Roth contributions), you can add another $20K into your Roth by doing the “mega backdoor roth.”

Reddit Personal Finance for Every Age

The personal finance advice you need changes as you get older and meet new milestones like getting married and having children.

Ideally, you’ll learn the basic personal finance stuff when you are young and adapt more sophisticated, advanced personal finance tactics as your wealth grows.

Reddit has the best advice for personal finance at any age. Read below to access the best personal finance advice on Reddit for every age group.

Here they are, organized by your life stage:

Table Plugin

Reddit Personal Finance by Region

Reddit, like the rest of the internet, is American-centric.

But within Reddit, numerous subreddits discuss personal finance advice focused on people living in other countries.

Click below to access personal finance for different regions:

Canada	Australia	European Union
Finland	Denmark	Germany
France	Malaysia	New Zealand
India	Portugal	Don’t see yours? Create one!
Italy	Sweden	United Kingdom

Reddit Personal Finance by Topic

I’ve summarized below the various financial topics covered by Reddit on r/personalfinance with an eye on only referring you to the best advice and the highest quality blog posts.

Read on to access the best financial advice on common financial topics you’ll likely encounter in life.

Personal Finance Advice on Buying a Car

Whether you are buying a car, selling one, or deciding between a used and new vehicle, this guide tells you how to do it.

Spoiler alert: you should never buy a new car. This favorite post gives a step by step guide on how to buy a car.

If you have a car, then you need car insurance. Read this guide to learn what various coverage options mean and which ones save you money without over-exposing you to liabilities.

Savings

Looking to open a bank or credit union account? This page has a list of the best banks and credit unions right now. 

Building a budget? This page talks about the core knowledge you’ll need to know to start creating your budget.

Debt and Debt Collections

If you are drowning in debt with debt collectors on your doorsteps demanding money, read this page. The guide offers practical advice on dealing with debt collection agencies. The guide introduces the Fair Debt Collection Practices Act (FDCPA) that protects your rights as consumers.

Read this guide to understand the best strategy you should utilize to pay off your loans. It also includes answers to the most frequently asked questions on debt repayment.

This guide is specifically written for anyone with student loans.

Credit

Your credit affects every aspect of your life from getting a job, buying a home, to opening a bank account. Read this credit and debit card guide to learn to use credit cards responsibly.

This solid overview gives an introduction to the United States credit reporting system and the five factors affecting your FICO score.

Your credit score could also be impacted by someone else opening cards under your name. This is called identity theft and sadly often committed by family members. This guide tells you what you should do to report identity theft and improve your score.

And once you are out of the mess, this guide teaches you the best practices to build a solid credit score.

Emergency Funds

Having an emergency fund is crucial. But if you’re not convinced, read my favorite post that eloquently articulates precisely why you need a 6-month emergency.

Also, here is the guide on how to create an emergency fund.

Employment

Are you about to quit your current job? Or, did you just get laid off or unexpectedly fired? Read this guide to learn what you need to do in the immediate aftermath of parting ways with your employer. This advice is not exactly related to finance, but it certainly impacts your money.

End-of-Life Planning, Death of a Loved One

You want to create a good plan in case you die so that those you love, especially children, are protected.

Planning your death doesn’t sound inviting, but neither is pretending no accident will ever happen.

To start, have a conversation with those you care about, create a will, record your significant assets and store how someone else can access your account.

You’re not alone; many people have conversations about their deaths, including this couple.

If someone you love died unexpectedly and the family is at a complete loss of how to take care of the financials, this guide tells you where you should start in the immediate aftermath of your loss to help protect your family financially.

Housing

Whether you are deciding to rent or buy, or how to get a mortgage, this guide is your friend.

Once you have a house, this guide teaches you everything you need to know about buying your home insurance so that you get your month’s worth without paying too much.

Seeking Independence

Reddit has allowed many people to seek help on issues that have long been taboo in our society.

Reddit’s heart-warming side comes out when the community rallies to someone struggling to break the cycle of abuse.

Many people grew up in broken homes filled with emotional and physical abuse and neglect. Others find themselves in situations where they are suddenly homeless.

Reddit has invaluable advice on what to do when your mother kicks you out, your crazy religious family disowns you, your roommate kicks you out, or you devise your plan of escape.

It’s comforting to know that you are not the only one and it’s comforting to know that it’s possible to survive sudden homelessness.

If you are in a tough situation and need to figure out a way to become financially independent quick, create a post on Reddit, you might learn a lot from the wisdom of a caring crowd.

Inheritance and Windfall Money

If all of a sudden you got a lot of money, say from an inheritance, you want to first go through the six steps mentioned above to makeover your personal finance.

Once you’ve accomplished steps one through six, read this guide on what to do when you receive a large sum of unexpected money at once.

Insurance

Sometimes insurance is a necessary evil you have to have.

Reddit has opinions on every significant coverage and the best method to get the best bang for your buck, including:

• Auto Insurance
• Health Insurance
• Homeowners Insurance
• Umbrella Insurance
• Life Insurance
• Long-Term Care and Disability Insurance
• End-of-Life Planning

Investing

In general, Reddit’s personal finance opinion is that you should pick index funds over actively managed funds.

Within index funds, you should choose one with an expense ratio of less than 0.18% and with 0% sales “load” (fees charged for buying or selling shares).

Here’s a guide that answers common investing questions. And here’s my own picks on the BEST vanguard funds to invest in.

If you are employed by a company, and they offer 401K, read this guide to understand how to select funds that work for you.

Reddit also has a guide that talks about whether and how to buy savings bonds from the Treasury Department.

Other common investment questions are answered here:

• Asking Portfolio Questions
• 401(k) FAQs and 401(k) Fund Selection Guide
• IRAs
• Social Security
• Rollovers
• Roth or Traditional?
• Thrift Savings Plan

Lending / Co-signing Loans

Reddit in its usual extremity believes that you should never lend money to your friends or families unless you are okay not getting it back. 

This post argues you should never cosign anything you are not entirely ready to take up the responsibility to pay for yourself. Do you agree?

Here is a couple of cautionary stories about how lending money destroys relationships, from a dad breaking his trust, a sad story of a mother-in-law’s debt, and what could go wrong when you invest in a friend’s business for the friendship.

Psychology

Sometimes we spend money to fill an emotional void.

When that void becomes too large, our spending becomes a compulsive disorder that needs attention and care.

If you are always hoping to gamble your way to the next lottery and it is destroying your bank account, join the gambling anonymous.

Can’t stop accumulating credit card debt? Consider joining debt anonymous.

Joint Finances

It’s not enough that you learn to manage money, you want the person you are sharing your life with to do the same.

If you’re going to get married, the best thing you can do for your finances is to marry a financially responsible person.

Wealth or the lack thereof should never stop you from being with someone. But be wary of people with bad financial habits.

This post talks about the challenges of a woman making more than a man, and this post talks about the obstacles between a gay couple making different incomes.

The most robust conversation, in my opinion, is the one about the prenuptial agreement. Will she get mad? How do we make it fair? This post has some interesting learnings on prenups.

Taxes

There are two things we know for sure: death and taxes. And Reddit has a wealth of discussions on both.

This is a comprehensive guide on taxes that is updated every year. It was updated in 2018 to include the new tax plan in the United States

Personal Finance Reading List

And last but not least, Reddit has a list of personal finance books that are considered must-reads and classics for someone looking to understand how to live a wealthy life.

The most recommended personal finance books on Reddit are:

• Your Money or Your Life by Vicki Robin. Read this if you want to change your emotional relationship with money
• The Millionaire Next Door by Thomas Stanley. Read this if you think rich people drive Mercedes and live in mansions. (HINT: wrong).
• I Will Teach You to be Rich by Ramit Sethi. Read this if you are a relatively young person looking to automate your personal finance.
• A Random Walk Down Wall Street by Burton Malkiel. Read this if you think you are smart enough to pick the rich stocks and get rich. (HINT: wrong).
• The Total Money Makeover by Dave Ramsey. Read this if you are drenched in debt and can’t get out.
• FREE PDF: The Richest Man in Babylon by George Clason. A timeless classic from 1926 but the principles are just as relevant today.
• VIDEO Series: Bogleheads Investment Philosophy. How to use index fund to get rich automatically.

What to Avoid on Reddit?

Fatfire Woman believes there are two types of information disseminated on Reddit: “provable facts” and “winning opinions.”

Provable facts are best practices that have correct answers conclusive by facts or statistical likelihood.

Questions like “should I invest in IRA or 401K” or “how should I buy a new car if I want to save money” have specific answers.

When these questions are asked on Reddit, the wisdom of the crowd explores and votes on the best solution. These are the kind of personal finance advice you want to trust on Reddit.

On the other hand, be wary and avoid information that feels like winning opinions. These questions include “should I invest in real estate in Texas” or “should I invest  in Facebook.”

Prevailing views are tactics that win by beating the market, i.e., being a contrarian and beating what everybody else is expecting to happen. As such, the most popular opinions on Reddit almost never win.

This is why I do not recommend anyone getting advice from the r/investing subreddit. Ironically, the motto of the r/investing subreddit is “lose money with friends.”

So feel free to go there for some entertainment. Best practices are meant to be trusted by the wisdom of the crowd; popular, winning opinions, however, are never to be trusted.

The Best Personal Finance on Reddit: Overview

With so many personal finance advice on the internet, you’ll never get lost if you start with Reddit. To recap, we learned in this guide:

• The six steps to your ultimate personal finance makeover
• Advanced hacks to personal finance
• A detailed flowchart instruction to 6 levels to your personal finance makeover
• Managing your personal finance at any age
• Personal finance for people living outside of the United States
• If you have a question, the topic is likely already covered on r/personalfinance
• Recommended readings to boost your personal finance knowledge
• What you should not trust Reddit when it comes to money advice

Happy reading!

What’s Next?

Want to create an emergency fund but don’t know where to put it? Check out our guides on the money market account.

Looking to create a budget? Create a budget that meets your goals with our guide How to Create a Budget Work Sheet.