Have you ever thought of putting rules on your money? It is a pretty interesting concept. We tend to have rules for every other area of our life…how much to eat, how much we should watch TV, limiting the amount of social media, amount of time to brush our teeth, etc. Then, that love hate relationship comes up with rules. We love rules because they provide structure and guidance when we need it the most. We hate rules because rules are meant to be broken. The golden rules are the ones that should be so ingrained in our lives that we don’t think differently.
Do you have a list of money rules?
Maybe a few in your head? But, probably not on a actual list. The bottom line is having a list of money rules to live by will life changing and make things easier.
Learning how to manage money is a skill that must be learned. And unfortunately, for a good majority of us, that skill comes from the school of hard knocks. Money management and personal finance aren’t “important” subjects to be taught in schools.
Why is Personal Finance Important?
Personal finance is not just for those that find it interesting. Everyone needs to know the basics of personal finance to become wise with their money.
The best part is you need to know the minimum financial rules to be successful. You don’t need a financial advisor, or have a degree in accounting and finance. You must be willing to learn a few things to be successful. That is all.
Specifically, why is personal finance important:
- Know where you money goes
- Improve your standard of living
- Actually have money to invest
- Increase your net worth
- Security blanket with proper insurance coverage
- Less stress with money
- Enhance your cash flow
- Don’t have to worry about your credit score
- Understand why ROI (return on investment) matters
- Life the live you dictate
- Prepared for life’s unexpected curve-balls
Money Rules To Know by Heart
1. Spend Less Than You Make
This may seem obvious, but with so many easy ways to access credit and debt, that we must state it first.
Spend less than you make. Your income should EXCEED your expenses.
Each paycheck you spend less money than you bring in. This simple money rule will help you stay afloat during crisis, save more money, and become the millionaire next door.
2. Learn from Mistakes
I’ll admit. I am far from perfect. Most of the tips you will find on Money Bliss happened because of mistakes that I have made. Call it the school of hard knocks.
These money lessons changed our trajectory of where we were headed… specifically from living paycheck to paycheck to on our path to financial freedom.
Once I become honest with myself and the stupid money decisions I made, it was easier to move forward and learn from my mistakes. Don’t cower from your mistakes. You can keep making them if you want. Or wake up and do something different.
3. Pay Your Bills On Time
If you are unable to pay your bills on time, then you need to have less obligations to make sure bills are paid.
There are two ways this happens:
- You don’t have enough money
- Your personal finances are a mess
4. Make a Plan for your Money
Don’t just assume… that your money can manage itself. You need to take active control of your money management. Continuing to sit idly on the sidelines will continue your current path with money. Is that what you want?
The great part of becoming an active participant in managing money is you learn what you like to spend your money on and what you don’t like spending your money on. A spending freeze will help jumpstart some savings when you start planning what you will do with your money.
Most people HATE the word budget. That is why we prefer to call it a Cents Plan. Figure out your “cents” and make a “plan.” Plain and simple way to make a plan for your money.
5. Establish an Emergency Fund
The backbone of money rules lies in the emergency fund. Make sure your emergency fund is adequate for your spending. And make sure you don’t tap into your emergency fund for overspending.
Here is a wise financial rule to remember…
In the perfect world, you should never use your emergency fund. But, if you do, that is why you have one.
Article Credit: https://moneybliss.org/money-rules/