You don’t actually have to do much to get your finances under control. You just have to follow a few simple personal finance rules to put you on the path toward a more stable financial future. While everyone’s financial situation is different, these rules act as a good starting point for a healthy foundation. Follow these essential rules of personal finance to make your life easier and your money last longer.
1. Spend less than you earn
It doesn’t matter how much or little you earn, To have healthy finances you have to ensure that whatever amount you choose to spend in a month is less than what you earn.
Spending less than you earn frees up the money you need to contribute towards your goals. This can easily be done by sticking to a budget.
2. Avoid get rich quick schemes
When something seems too good to be true it actually is. The desire to achieve instant wealth can push you to fall for schemes promising quick and easy wealth.
However, building sustainable long-term wealth takes time, discipline and consistency. You have to play by the rules if you want to create any kind of success for yourself.
3. Save and invest for the future
Saving and investing can be the bridge between your goals and dreams and their actualization. When you decide to prioritize these healthy financial habits, you’re preparing a better future for yourself.
Saving and investing allows you to add more value to your current financial status and to enjoy greater security in life.
4. Say no to debt
Debt can affect your finances and mental health. Stop borrowing money to maintain a lifestyle that you can’t afford.
By budgeting your monthly expenses, you can easily know how much you have to spend and where you can afford to spend it. If you’re in debt, focus on paying it off as quickly as possible. If you’re not, avoid it like the plague.
5. Keep track of your cash flow
Knowing how much you spend (and on what) is the first step in taking control of your finances. Not only does it help you see where your money goes, but it can also reveal to you your spending patterns.
Keeping track of your cash flow can ensure that your money is used wisely and it can help you identify sustainable cuts in spending.
6. Set SMART goals for yourself
The power in setting SMART goals is that they drive action. Not reaching the goals we set for ourselves can be demoralizing that’s why you should set yourself up for success.
Making SMART goals help to create a plan that is far more likely to result in change. Start small and build up from there.
Final Thoughts
Following a few simple rules of thumb will help you get your finances in order. It doesn’t have to be complicated or stressful. It can be difficult to live by these rules, but if you manage it, you’ll save money, build wealth, and be financially secure.
When money realizes that it is in good hands, it wants to stay and multiply in those hands.
-Idowu Koyenikan