10 Simple Rules of Personal Finance and Then Some | Your Best Guide in 2021

 The simple rules of personal finance that we listed here are definitely not exhaustive but a quick search online will give you tips and tricks to maximize your savings even further.

Simple Rules of Personal Finance

Simple Rules of Personal Finance

Handling your personal finances can be overwhelming for some.

However, if you break them down into simple rules, just about anyone can do them and help you on your way to becoming good at handling and managing your own finances.

Today’s guide on the simple rules of personal finance was created to look at some common rules that you can adopt right away.

So you know this is not an exhaustive list as there are probably around 50 or more tips that one can do, simple things, to get better with your finances. 

Let’s jump right in, shall we?

Spend Less Than You Earn

I think one of the most basic things to remember in simple rules of personal finance is that you need to spend less than what you actually earn.

Many people continue to spend beyond their means and so end up without money or rack up a huge debt.

Either way, you should only spend the money that you have.

One must prioritize properly the spending of the money they have and ensure any obligations are paid properly before other expenses and luxuries.

If you are spending more than you then you need to re-evaluate your expenses and see what you can cut out.

If your earnings are not higher than your spending then you simply cannot move on with your financial goals or be able to spend on anything at all. 

Keep Your Expenses Simple on Your Personal Finance

Simple Rules of Personal Finance

Avoid having multiple credit cards and other modes of payment.

Keep it simple is one of the simple rules of personal finance.

The more cards you have the more you are opening yourself up to identity theft, fraud, and confuse your payment schedules.

This is because the more you have to handle, the less time you actually manage each of your accounts.

And if you miss something like a payment, it can hit your credit scores and affect your payment history with companies.

Simplify by canceling some cards, merging accounts and investments, and consolidate debts into one if possible. 

Don’t Let Your Future Self Be Responsible for Your Current Financial Situation

Many make decisions like to purchase something or get something because they will get paid for something in the foreseeable future.

We suggest that you don’t count your chickens before they hatched.

This is because many things can happen from now till that future time.

What if you suddenly had an emergency that needs money?

Or what if the money you expect coming in gets delayed, or worse, doesn’t come at all?

What will you do then?

Make sure that when you make a financial decision, you have the finances to support that decision today. 

This is just one of the simple rules of personal finance.

Prioritize Having an Emergency Fund

Speaking of emergencies, one of the most important things you can do is have cash on hand that is available in a savings account at a local bank that you can use when there are emergencies.

Emergencies can happen anytime which can leave you out of pocket and outside your budget.

This can be as simple things such as items you need to get to something like home repairs or unplanned hospital visits.

It is best that you have some money to use on a bad day.

Our guide to the simple rules of personal finance suggests that you prioritize this. 

Get Rid of Debt Fast

As you will find out online, this is part of the simple rules of personal finance that you should not forget. 

Debt can actually be more expensive in the long run where you might be paying hundreds or even thousands of dollars more than you actually need to.

We suggest you get rid of your high-interest debts as soon as possible as those charge additional fees the most than other expenses.

Try making a double payment for the highest-interest debt every month and before you know it, that debt will be gone and you can do that in your next debt until all your debt is gone.

The amazing thing here is that the more you pay and get rid of debt the easier it becomes to pay the next debt, then the next until it’s not even going to be a problem anymore. 

You will find out that in many guides talking about the simple rules of personal finance, this is always included.

Focus on Saving for Retirement Next

Once you have an emergency fund running and have started paying debt, you should then consider saving for retirement.

If you have access to a 401(k) plan at your work, you should open up an account and start contributing to the plan.

If one is not available, then it is a good idea to set up an IRA account through an investment house.

There are many investments that can also be made that can save up for the future which you can use once you retire from the workforce.

Our simple rules of personal finance believe that you should always consider retirement in your financial plans.

Term Life Insurance for Your Dependents

If you have dependents that are reliant on you for your regular income (like children or elderly people), you will want to consider getting a term life insurance with your dependents are your benefactor.

This ensures that your family will have money that will take care of them in the event of a sudden early passing.

You wouldn’t want to leave your family to be left with their pants down, right? Apart from term life insurance, you can consider those other plans as an additional cost. 

Getting this kind of insurance is just part of the simple rules of personal finance today.

Build a Budget So You Can Build Your Finances Correctly

Simple Rules of Personal Finance

A budget is so important because it allows you to track all incoming money and outgoing expenses.

Part of building your budget is actually understanding all the elements of your expenses and your income and building that budget correctly.

Going through your expenses, your receipts, and your bank transactions will reveal to you what you have been spending and also let you see if you are overspending or not.

This again is in an effort to know your expenses intimately so you know what you can remove should you need to.

Doing a cookie-cutter budget will not be able to give you an in-depth understanding of your expenses and is a no-no to the simple rules of personal finance. 

Cut Out the Extra Expenses on Your Bills

Everyone has bills but something you might not notice is that many of your bills have extra charges, some of which you may not be aware of.

These are usually extra services that you may not necessarily be using.

Go through your bills with a fine-tooth comb and look at every detail.

Anything you are being charged extra that you don’t use is something you can cut out.

Call up the company involved with your bills and request to cancel those services so that you can save money.

It might just be a few dollars per bill but those amounts could add up which you can put into savings or investments. 

The simple rules of personal finance dictate that you make sure to check all your expenses are valid and necessary otherwise, you need to get rid of it as soon as you can.

Try to Get Rate Reductions on Your Debts, and Especially With Credit Card Debts

Debts often are being charged extra rates, especially with credit cards.

However, like most debt, you can make payment arrangements to reduce the interest rates.

If a debt has been in arrears, many companies are likely to negotiate if you commit to a payment plan.

Lowering interest rates can lower your monthly payments and increase your savings in turn. 

One of the simple rules of personal finance guide believes it’s common sense to get the lowest rates as possible especially when talking about debt.

Simple Rules of Personal Finance

Final Thoughts

Your finances can easily be adjusted and adapted depending on your needs.

Slight changes here and there can make significant impacts on your expenses and your savings.

The simple rules of personal finance that we listed here are definitely not exhaustive but a quick search online will give you tips and tricks to maximize your savings even further.

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Author: maharot22

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