Money rulesIMAGE: SHUTTERSTOCKLiving pay to pay is not a good idea – and COVID-19 has highlighted that very, very well. If you are ready to change things going forward, then now is a good time to get started.by Jeff HahneBoring, with inspiring resultsThere are only four rules when it comes to money, none of which are new or even a secret, although lots of people would have you think otherwise.

It took me a while to realise that basic personal finance is not sexy (I kept trying to make it sexy). Personal finance is boring… but the results are inspiring.

The topic of money been discussed ever since there has been trade and money. Some of the books that discuss personal finance and money, and whose ideas I like, are:
  • The Richest Man in Babylon by George S. Clason, 1926
  • Rich Dad Poor Dad by Robert Kiyosaki, 1997
  • The Only Money Guide You’ll Ever Need by Scott Pape, 2016
While I do not necessarily agree with everything written in those books, they are an excellent read and all present similar concepts.

So now on to the rules.
The rules of moneyThese rules are in order and will only be briefly outlined here. How to implement the rules is another story! A bit like how to lose weight. A rule for weight loss is diet and exercise; it is not that hard to figure out. Actually, doing it, however, can be a lot harder!

Rule #1 – You and your partner must be on the same page
You cannot be headed in opposite directions and both expect to arrive at the same destination. This applies to almost everything in life, including money. You cannot out earn your partner’s spending; there is always something new to buy. You both need to focus on your goals and stick to the plan. If you can’t do this rule, then the others don’t mater. It is both the hardest and simplest at the same time.Rule #2 – You need to live on less than you earnYes, this means a budget. A written budget, not one just in your head – boring I know. But the exercise of creating, reviewing and agreeing to a budget with your partner cannot be understated. A budget shows you where your money is going before it is spent, which is an immensely powerful tool. Instead of looking at your account and wondering where the money went, you get to follow every dollar that you earn and make sure it is working for you.Rule #3 – Definitely no consumer debt; ideally no debtNo credit card, no ‘after pay’, no car loan, no store loan, and so on. Debt does one thing – it keeps you poor, and makes the lender rich. So, if you have any debt, focus on getting it out of your life fast. The faster it is gone the better. This includes the mortgage when you get to that point.Rule #4 – Do not become ScroogeIf you have made it this far, then you have no debt, are living on less than you earn, and you know where you are going with your money because you have a plan.

Part of the plan may include an allocation of some money to buy the things you want. So, do not become one of those people that never has any money for anything. Money tends to do one thing, which is to m agnify the person you already are. Th is means that if you are a giving n eed to put in the effort. They are person, you will become even more generous.
In this article I’ve been discussing the rules on money; now the rest is up to you.Time + effort = securityThese rules take time, and you not new, or a ‘get rich quick’ system, but rather a tried and true method to ensure that you achieve your maximum potential when it comes to creating a secure financial future for you and your family.

One last bonus guideline – do not compare yourself to what other people have. They could be in debt up to their eyeballs. Be happy with what you have and the journey you are on. You will get there.
BIO: Jeff is an engineer who always likes to know why things work the way they do. This led him to study personal finance as a hobby ever since he started earning money.
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