The Money Rules Archives

The 3 Rules of Money Management

Stop Spending 100% Income

Do you know a high number of people spend over a 100% of income. They do not have margin in life. They continue to spend on unnecessary things. They continue to spend in order to find happiness. It is the 1 number rule in the area of money management. Hey stop the crying and stop the spending in order to find surplus funds. The choice to funnel 20% of pay from the very first paycheck will allow you the margin you need to not abuse personal finance. Obviously if in Debt you might not be able to funnel 20%, and thus should be directed towards debt.

Avoid Paying Interest for Debt as it’s a black hole

Paying interest on money you don’t own is the ultimate trap. Pretending to be OK financially, while borrowing on debt to fund a lifestyle is never good. Be creative to find ways to pay it back or to avoid it at all costs. Debt is never the answer and those who tell you it is, are stuck in debt themselves. They want company and you should immediately stop listening to that advice. I’ve been in and out of debt and I’ll be honest being in debt is stressful, and those times when out of debt felt great. Avoid giving free money away and tell the banks to keep their expensive loans.

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How to Stop Financial Pride

Financial pride is a thing and it can be a long stressful life if you can’t take pride out of finances. Nobody wants to be guided with how they manage money, but if that were the case, then all the bad decisions people made financially would’ve never occurred. That gut check you sense when you’re about to make a sizable expense is the exact warning, to help you reconsider such a devastating financial event. If you find it OK to take multiple vacations a year because you think you can afford it, while you continue to live life paycheck to paycheck that’s a perfect example of non positive financial pride. Financial pride (negative meaning) can be a simple mindset to fix, steering you to make unwarranted financial decisions that are not financially optimal. How to stop financial pride is simple and you will see the answer below.

For example I almost purchased a used car for 4 grand just to drive it on the weekends. Rationality went out the door because I wanted a new shiny toy, but after thinking it through, I decided I needed to fix a few projects around the house first. What if we could just take a moment to decide whether a purchase makes sense in our lives? Would everyone avoid spending and live a so called miserable life from those who relate spending and happiness?

Why is it that people who spend a lot, think people who don’t spend a lot, live unfulfilled? The first step to getting around how to stop financial pride is to not believe money & spending equates to happiness. If you’re happy you live happy, and spending 60K on a new Lexus shouldn’t define that happiness. Or maybe by taking 3 vacations per year, you think it can possibly shoot your happiness gauge up a few notches. The experiences coupled with memories should make you feel better for sure, but if it means you just added debt to have fun, then that is counter to happiness.

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What is your Personal Finance Attitude?

Many times I sit and think about how attitude can be a deciding factor in how life turns out. If your attitude is steered towards a particular view point, it can either be a winning or losing battle for you. So knowing what is the right attitude to have towards money can once again be the answer your looking for. What is your Personal Finance Attitude? If you ask this of yourself from time to time it will trigger something within you to find where you stand.

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What Is Finance

OK another fun post explaining the basics of personal finance to all of you great readers. My point of view is somewhat unique because I like to break things down to a financial and common sense level. What is finance? Well it is a word primarily and it also represents the definition of money management.

Is it easy to manage money of course, is it hard to manage it if your not ready, extremely. How do you supervise those slippery dollars? If your ready to step up and can really grasp this what is finance definition. When you can innately place finances above other things it will occur naturally. Monetary savviness is not an imaginary thing we are all looking to find in a forest, it is solved by simply finding your reflection in the mirror. It is our choice to either fix things or keep on the same path we’ve been on. See below for what is finance defined.

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Financial Mistakes

I thought it would be cool to display and write in jest all the financial mistakes I’ve made, I’ve read, or I’ve discussed with others. Being a personal finance website manager I get talks like this from time to time, and boy things tend to get interesting. Nobody wants to air their dirty laundry but this post will be different. It will all be anonymous in order to help anyone struggling with financial management and to make a point that mistakes may occur at any moment. Also it will help millions of people who never committed these blunders avoid them.

Now that we got all the back ground noise out of the way, let’s get to the steak of the article. (OR is it meat of the article – whatever you get it) Remember a time back in the day when you had no bills, no loans, no income, and no real financial responsibility? It was all so peaceful back then, and now you’ll slowly waken out of that slumber. No more day dreaming for you, as you might get crazy debt freedom ideas. I will obviously give you a big list of money mistakes and I’m not holding back anything.

Sharing Financial Mistakes is just as Important as sharing money wins

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Do you want to Be Rich?

Do you want to be rich

There’s no secret sauce to becoming rich or maybe there is, and let me explain why below. Do you want to be rich? If the answer is yes, you may want to pay extreme attention as I’ll outline all the steps to getting the illusive first million. I’ve read many times in hundreds of websites, that in order to be rich you have to do these 3 things:

Pay yourself First

Spend Less than you Earn

Have and Maintain a High Income

While yes these three factors do matter to the average person who dreams of swimming in the dough like Scrooge Mc Duck, I will tell you becoming rich takes a deeper process and an involved plan. Many people seem to have the mentality that becoming rich is all about luck and or hitting some magical monetary jack pot.

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Financial Champion or Financial Wimp

The premise behind the financial champion or financial wimp is to decipher where anyone who is currently employed is excelling or falling behind everyday with money matters.

There’s not much info out there on actual facts whether someone is a financial champion who makes all the best choices with money or a financial wimp who squanders money. (PF Bloggers Excluded) The financial wimp is inclined to make excuses behind each and every financial choice they make. It can be blamed on several factors like not making enough income, not being able to avoid debt, not sacrificing for immediate gratification, etc. Let’s make an effort to stop all the excuses.

Now where the grass on the other side is usually greener or at least appears that way. The financial champions are the folks who constantly strive to do the best for their finances without any mental barriers or #excuses. They fund 401K to the best of their abilities, they have a Roth IRA and fund that as well, they understand the value of money, they take choices regarding money not lightly, they brown bag lunch in order to pay debt off sooner, and they understand happiness does not come from buying everything that glitters.

Now let’s discuss what traits distinguish the two polar opposites of financial people. I am not trying to put anyone down or praise anybody, but there is a truthful way to live a dedicated money life. See below for the awesomeness.

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Why Percentages Matter

Do you know that in order to handle money correctly, we all need to know the exact percentages we can spend on every category? Once you understand why percentages matter and that it’s all about handling money within percentages, then money management will be a breeze. This is a simple finance strategy many never implement, but when they do, people will soon realize how much extra cash flow can be had. I will provide below a standard guideline for specific categories and I hope your budget is in line with what I am about to share below. Granted nothing is set in stone around here, but this will get you to understand if you need to fix a money category, that is out of whack.

If you can stay within the percentages for expense categories, this will eventually free up money for you to go over and above in the savings / investing percentage categories. By going over in the savings / investing categories you will be bounds ahead in retirement nest egg funds in no time. People will most likely shoot down an idea like strategizing income based off percentages, before even trying it out. How can one negate a financial strategy before implementing it, all because it is something completely new and different.

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