Hello beautiful people!
Are you one of the people out there that is constantly worrying about money and their finances to a point where you can’t sleep at night? Do you sometimes don’t even know where your next meal is coming from?
If you’ve ever worried about money, this post is for you. Personal finance doesn’t have to be the most complicated thing in the world. All you need to do is get a little bit of knowledge and follow these 10 simple rules.
If you have any questions about personal finance, please don’t hesitate to get in contact with me and I’ll see if I can help!
10 Personal Finance Rules You Should Live By
#1 – Think About Your Future Self
One of the most important things about getting better with money is to realize that you need to switch from a present mentality to a future mentality.
I totally understand the thought process of you’re only young once or you only live once as a reason to want to spend whatever money you get but it obviously isn’t the most intelligent idea if you want to get your finances together.
You need to realize that your future self is going to need money too, and if you make a couple intelligent decisions now you’ll be in a much better place later.
- Related: Why you need a 5-year financial plan
#2 – Don’t Let Yourself Get Into Debt
Getting deep into debt is one of the biggest mistakes so many people have because it’s so hard to dig yourself back out.
Only use credit cards if you’re 100% sure you can pay it back within a month. Don’t open new credit accounts that you don’t need because that just opens up the opportunity for you to spend money you don’t have.
If you’re able to pay for school out of pocket, do it. Student loan debt can and will weigh you down for years to come.
#3 – Track Your Income/Expenses/Spending
The only way to truly know how you’re doing financially is to make sure you’re tracking where your money is going. You should always know where your money is coming from, where it’s going, and where you can do better. All you need to make sure you’re doing this is a spreadsheet or some paper and you can find awesome tracking templates online!
#4 – Create & Stick to a Budget
It just seems like I’m always recommending people to start a budget, but that’s because it’s honestly the most important factor to good financial health. Having a budget takes all the guess work out of personal finance!
I understand that budgets aren’t the sexiest or most fun things to do, but having a plan for your money is going to eliminate so much of your money stress!
- Related: 5 Reasons Why You Need a Budget
#5 – Live Below Your Means
I know, I know. Everybody tells you to live below your means. It’s such a basic concept, yet so many people are unable to do it! If you don’t already know living below your means just means that you spend way less money than you make and you don’t let lifestyle creep get you!
What is lifestyle creep? Lifestyle creep is when you get an increase in income and you let your lifestyle (the money you spend) increase the same amount. This is a problem because you’re never really able to make big changes in your financial situation because you’re never saving much money. Lifestyle creep is a serious issue for people who get their first job after college, they go from making almost nothing, living in a dorm, to making actual money and they spend every single penny!
Try to not spend as much as you make and you’ll be in a pretty good spot!
#6 – Don’t Emotional Spend
Everybody has their vices. Some people do drugs, some drink, and some spend money they don’t have when they’re feeling blue. Having an emotional spending habit is going to drag you down for your entire life, so it’s best to try and avoid it from the start.
It’s really important to not develop behaviours that allow you to spend money every time something good OR bad happens in your life because you’ll never be able to keep up with your budget!
#7 – Minimize Your Taxes
Nobody likes paying taxes, but they’re a necessary evil that’s designed to make some parts of our lives better. It’s really easy to forget that there are so many ways you can minimize the amount of money you pay in taxes every year!
Before even thinking about filing your taxes you should check out all the ways you can get tax write offs and tax breaks in your country/state/province/wherever you live. Every place is different, so this information is entirely up to you to discover. You can get tax breaks (in some places) for paying interest on student loans, for having a mortgage, for having children, for having a home office, etc.
#8 – Have an Emergency Fund
Having emergency money ready to go is one of the greatest feelings. It’s nice knowing that if something horrible happens you have the ability to cover (at least most) of the cost without using credit!
How much should you have in your emergency fund? It’s always good to have at least $1,000 to start because most emergencies aren’t going to cost you more than that. However, in an ideal world you’d have at least 3-6 months of your total expenses ready to go at any time to cover any possible injuries or unemployment!
- Related Post: How to build a $1000 emergency fund in 100 days!
#9 – Buy Used/In Bulk
Everything you buy doesn’t need to be brand new or brand name. Money does not grow on trees so it’s really smart to pinch pennies in as many ways as you possible can.
Buying used is a great way to save money on those big ticket purchases that you have to make. Where’s a good place to find used stuff for purchase? Facebook marketplaces of course! You can find tons of people selling all sorts of things on Facebook and chances are you can find something that you really need.
#10 – Pay Yourself First
Are there any financial rules that you swear by? What’s the biggest financial mistake you ever made? Let me know in the comments!