Personal finance doesn’t have to be rocket science. There are certain “rules” out there that you should try to live by because they can make your life so much easier if you just stick with them.
They will eventually become a part of your daily, weekly, monthly habit, and you won’t even have to think hard about it before you make a great personal finance decision because it will be so instilled in you.
Here are different personal finance rules that you should start living by.
No matter what you do, please try to save SOMETHING. I’m not saying you need to save so much money that you hate your life, but you need to find a healthy balance between spending and saving.
If your budget is very strict right now, then please remember that just saving $50 each month or something like that is better than nothing. No amount of savings is too small.
CNN Money has a great Savings Guide that I definitely recommend you read.
Have an emergency fund.
If you do not have an emergency fund, please start one now! Different people feel comfortable with different amounts because no person’s life is exactly the same as another person’s life. Some like to have six months of expenses in their emergency funds, whereas others like one full year.
Emergency funds are great to have because they can help you through a tough patch in your life, such as an expensive repair (home, car, etc.), medical issues, job loss, and more. If you are looking for ways to save for your emergency fund, read this article on Dave Ramsey’s website.
Have a realistic budget.
Having a realistic budget is very important, especially if you are not doing well with your finances currently. You need to sit down, create a budget and figure out what is wrong with your finances.
You also need to make sure it is realistic because just having a budget will not solve your problems. You need to have a realistic grasp of your spending and income so that you can see where you need to improve. For example, if you are playing new online Casino games each week, then you need to account for that in your budget. Same goes for clothing spending, food spending, going to the movies, and more.
Read the related post: Creating a Budget.
Always make more money than you spend.
Whatever you do, please always work towards making more money than you spend. If you are happy with the amount of money that you are making, yet your spending is higher than your income, then you obviously need to cut some expenses out of your life. Spending more than you make will lead to a disaster sooner than later.
According to NerdWallet, the average US household has around $15,000 in credit card debt, which is a HUGE amount of debt. Don’t be a statistic…
What personal finance rules do you make sure to live by?
Photo via Flickr by Dustin Moore
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