Establishing guidelines and boundaries with your finances is extremely essential. Not only will it bring you peace of mind, it will help you save money and come out ahead long term. Start following these basic money rules now so you can reap the benefits of your frugality in the future.
Set and Stick to a Budget
A good rule of thumb to budgeting is to split your income into percentages. Abby Hayes, a writer for doughroller.net states, “Try the 50/30/20 rule for budgeting. If you’re new to budgeting, try allocating 50% of your take-home pay towards necessities (food, shelter, utilities, clothing, etc.), 30% towards lifestyle choices (vacations, gym fees, hobbies, cell-phone plans, etc.), and 20% towards financial goals and priorities (extra debt payments, savings, etc.). This isn’t a perfect budget, but it can be a good place to begin.” If this feels too extreme for you (living on 50% of your income can prove difficult for some), play around with the percentages. Start with different breakdowns like 60/30/10, or 70/25/5. Make it your goal to work towards a 50/30/20 split. The most important thing is that you can create a budget for yourself that you can stick to. Whatever that realistic number is, that is where you should start.
Make Your Money Work for You
If you’re getting paid and sort of hoping for the best in terms of having enough money to pay your bills, you need to get organized. Come up with a game plan for your budget. An article written for moneybliss.org elaborates by saying, “Don’t just assume… that your money can manage itself. You need to take active control of your money management. Continuing to sit idly on the sidelines will continue your current path with money. Is that what you want? The great part of becoming an active participant in managing money is you learn what you like to spend your money on and what you don’t like spending your money on.” Ask yourself “Are my financial habits today going to get me where I want to be later on in life?” If the answer is no, pivot, make appropriate arrangements, and move forward from there.
Save Money
Arguably the most important rule when it comes to money is to live within your means. Don’t spend more than you make. This will enable you to create savings. Nobody wants to feel like their one emergency away from being in a bad spot financially; however, you have the power to control your spending habits to establish a security blanket for yourself. Leave it alone, and you will feel confidence and peace as you watch it grow.
Your money needs rules just like many other things in life. When you adhere to them, you’ll find yourself excited about budgeting and saving. The feeling you get when your financial habits are under control is extremely liberating. Give yourself that gift!