Everyone dreams of having infinite money. Just thinking about it can cause you to imagine boundless ways to spend it. If you got your gazillions now, you’d probably be living in a palatial home or jet setting your way all over the globe. While it’s rather farfetched to have a bank account that never runs out of money, it’s not impossible for you to become rich or become financially successful. You can have an easy life right now without worrying about money. The problem, however, is that many of your actions today are hampering your way to reaching your desired wealth. In order for you to achieve an astounding financial change in your life, here are five important money rules you should ponder and follow.
- Save before you spend. This is one smart money rule you should constantly apply in your life. Many people when they receive their salary are always itching on how they are going to spend their money right away. Avoid making such a rush to part with your hard-earned cash. Set aside first at least 10% of your salary and gradually increase this amount over time. Once you see your savings climbing, you will be more motivated to see it fatten up. Having savings is necessary because it means that you are free from any debt.
- Set up an emergency fund. Building an emergency fund is very important to help you weather the unexpected. Financial difficulties can come in the form of sudden unemployment, home repairs, auto repairs, medical bills and so on. Having an emergency fund to help you survive at least three months worth of your living expenses is considered standard practice. If you can accumulate enough money to help you survive six months or more, the better. Knowing that you are financially prepared for any hardship that may come your way will give you security and peace of mind.
- Leave below your means. This rule is very difficult for many of us to follow. People are often tempted to live in luxury, something that’s beyond their means. You want a rich life, but if you don’t have enough money left in your purse each month, how are you going to fulfill your other dreams? This rule is all about making the right choices, practical choices. You need a car to get you to work, but is it really necessary to drive a Mercedes or will a simple Hyundai will suffice? Leaving below your means doesn’t mean depriving yourself. You are still answering your needs. And while the luxurious car may make you happy, wouldn’t not worrying about money make you feel happier even more?
- Pay with cash and pay in full. Paying your purchases in cash helps to curb your spending. When you have a $100 bill in hand, it’s actually harder to part with it as opposed to simply swiping your card. Also if you are going to buy something, see to it that you already have the money to pay for it. For instance, if you plan to buy a brand-new appliance, save money for it first then purchase it by paying in full.
- Keep a money journal. Recording your spending will help you monitor and analyze where your money is going. Doing this can have a profound effect in your life since you’ll get to see how easily money can leak out of your hands. With a money journal, you’ll come into terms with the money you spend frivolously and on a whim. The journal will help you to make the necessary changes to your spending habits and plans.