Money management advice is everywhere you turn these days. News programs, business news cable channels, online financial sites, and even your friends and family are eager to share their opinions about how you should manage your money. But despite all the advice, tips, ideas and new digital tools to manage your personal finances, these three golden rules will never change.
Golden Rule #1: Don’t spend more than you make
Basic money management starts with this rule. If you always spend less than you earn, your finances will always be in good shape. Understand the difference between needs and wants, live within your income, and don’t take on any unnecessary debt. It’s really that simple.
Golden Rule #2: Always plan for the future
Get into the habit of saving money by paying yourself first. On payday, transfer money to your savings account even before you pay bills. Many banks will let you set up a recurring transfer from checking to savings through online banking, so you can save money automatically. Planning for the future means preparing for the unexpected, and building up an emergency fund is the best way to handle life’s unforeseen expenses. Having difficulty finding the money to pay yourself first? See Golden Rule #1.
Golden Rule #3: Help your money grow
Once your savings start to build, you should find ways to grow your money through investing. This is especially important for long-term savings strategies such as retirement planning. There are many investment tools available at various levels of risk, but always make sure you thoroughly understand the kind of product you’re investing in. Remember, time is on your side for your retirement and other long-term goals when you start saving and investing as much as you can as early as you can.
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