Money becomes a significant part of everyday life. Almost everything can be bought or sold in the modern world. That is why it is so important to know the basics of personal finance management and know how to act in case of emergencies.
There are different ways out when you need money just now. You can ask your friends for money or apply for an loans online. But it is better to prevent financial difficulties. So, below there are 12 money rules to follow.
#1 Track Your Expenses
Having your spending out of control makes it impossible to figure out where and how the money simply evaporates from your wallet. Start a notebook, keep detailed lists of all your current expenses, save receipts and then you’ll finally realize how many things were just unnecessary and completely forgettable purchases.
#2 Open Yourself to Your Partner
Thinking as if you’re the only one who should take care of your finances is an absolute misconception. Once you’re able to disclose your financial precepts for the loved one, thoughts about overcoming things with the help of somebody else would always be encouraging.
#3 Mortgaging Your House Isn’t Always a Good Idea
Rich people can afford to purchase their homes without any mortgage, but what if you don’t have million-dollar savings for buying a house? Our advice: rent an apartment until you’ve saved enough for buying the house in cash or else be ready for endless refinancing, paying off constant bills and inflation. Otherwise, you can turn here for assistance.
#4 Investing Is Better Than Saving
Trying to save cash for your good retirement means, you’re not using your money smart. Instead of all of this, you should rather invest in your future prosperity and build wealth before you get retired.
#5 Plans for Emergency
What if you’re suddenly dismissed or forced to move to another city? Do you have an emergency fund prepared? Do you have insurance? It’s better to take care of things before they actually occur or else you risk to be crawling out of the debt for the rest of your life.
#6 Buy Quality Goods
Each of us does really enjoy buying something on sale or what is truly cheap, but having a habit to always opt for inferior and poor-quality goods isn’t rationally. You can buy a set of dishes in the dollar store, which won’t last for longer than 3-5 months and then you will have to replace it again, or you can choose a $50 china set that will serve you for years.
#7 Be Self-Assured
Surprisingly, the appreciation and enjoyment of your money is something that’s characteristic of rich people. They believe: doesn’t matter if you earned, $100 or $1,000, you won’t be able to earn more unless you learn to enjoy and appreciate the one that you already have.
#8 Emergency Fund
Saving at least a tenth of your earnings is definitely a wise decision, which prevents from taking high-interest-rate loans and credits. And don’t blindly spend your extra money just because you have it. But don’t’ leave all saved money under your pillow (see the fourth rule)
#9 Don’t Buy Staff to Impress Others
Remember “Fight Club” and the quote: “We buy things we don’t need with money we don’t have to impress people we don’t like”? People like expensive goods to show off that they earn enough to afford themselves buying expensive watches, drive luxurious cars and wearing designer clothes. The truth is, sometimes people save for months and years to buy something more prestigious than everybody has. Don’t be anybody else and leave attempts to seem cool.
#10 Don’t Jump to Buy a Car
If you’re thinking that right now you can afford to buy an automobile, then basically you ought to have the whole amount in hands or else you just can’t afford it. Relying on your loans again means paying huge interests where you lose quite a bunch.
Although, if buying a car is a matter of a real necessity, then at least try to stay frugal and select the low-cost option. Remember that car maintenance is also a huge piece of your already tight budget. Consider checking car parts costs for the model you like. In other cases, look for other means of locomotion.
#11 Become Independent
Keeping up with your life in the early 20s is quite a challenge. Entry-level paychecks don’t leave you other choice but tightening your belt really tight. Asking for some help would be fine although once you’re 30, consider solving your financial difficulties on your own. Believe us: it’s possible.
#12 Health Insurance
Being young means being healthy, but a youth, unfortunately, doesn’t last until the end of your life and seeing a doctor one in a year at the end of your 40s can result in regular doctor’s appointments. And don’t be surprised by your bill, when this happens, because years ago you refused to do your health insurance. Therefore, be financially wise and take care of your insurance now.
There are many more rules on how to manage money. Financial literacy is something that can be achieved not at one moment. You should educate yourself every day, develop good habits and get new skills. Don’t give up and the result will be not long in coming!