6 Essential Financial Rules Everyone Should Know About

  • November 29, 2018

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6 Essential Financial Rules Everyone Should Know About

Do you know these 6 financial rules?

That's the question for today -- and this contributed post has the answers.

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Most people spend cash and swipe their card on various things, almost every day.

Personal finance is usually not taught in schools; so, you begin to learn the truth of maintaining your money in the harshest way possible, by almost running out of it. This reasoning is a recipe for disaster.

In this article on financial rules, we will walk you through the best suggestions you can use to create a sound financial lifestyle for yourself.

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Related to financial rules:

Using an app

Keeping a track of your money is the first step to financial responsibility.

Therefore, one of the financial rules to live by is:

Using money management apps.

The same way a food diary will help you stay on track for a healthy weight journey, money managing apps help keep a track of your finances.

You can set up an initial budget and quickly see how your spending is working on your end goals.

Follow the 50-20-30 rule

Divide your take-home salary, into three categories; necessities, luxury, and future savings. 50% of your income should go toward the must have’s- rent, utility bills, groceries, and transport.

Set your account to deduct 20% of your income to a savings account or retirement fund; and lastly, no more than 30% should be spent on luxuries, this includes shopping, travel or a gym membership.

Indulge in the little things

Don’t be stingy about the little things, especially if it’s something that you look forward to. Just indulge in proportions, don’t go overboard.

The best way to control this urge is to list out the leisure items that you’re spending money on and reduce spending on the one you like the least. If you want to spend time running outside, but have a gym membership you hardly use, then it’s good to cancel the gym membership.

Save for the future

In your 20s, the 60s may not seem like something you should worry about; in fact, you must start thinking about your retirement at the earliest. Saving for your future from the beginning is a smart move that many 20-year-olds don’t think about.

Make it automatic

When you can’t see where your money is going physically, it can be a toxic trait that will affect you saving habits in the long run.

However, the auto features for your bank account will help you out. When you automate your savings, you’re saving big bucks that you don’t have to transfer from your account physically.

You can assign 15 to 20% into your savings account monthly.

Know your credit score (one of the key financial rules)

Being informed about your credit card status is one thing, but knowing your credit score is another level. When you know the exact amount of your expenses, you can avoid any unnecessary spending.

You can keep your score high by never missing out on paying your bills or credit card debts. Make sure you’re never late when you pay your bills.

Remember that any housing-related expenses should not be more than 25% of your total income.

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