10 Rules of Personal Finance

10 Commandments of Personal Finance

  1. Take action.

No matter what you learn about personal finance, it will all be futile if you don’t put it into action. Don’t procrastinate. Take action today.

  1. Set financial goals.

If you think you are not saving for anything big in the future, setting up an emergency fund to cover yourself for unexpected mishaps is a great place to start. Afterwards, tackle your retirement fund. Then comes saving for a car or a house, or your dream vacation.


  1. Pay yourself first.

Once you’ve set your financial goals, set aside an amount for it faithfully each month, as if you’re paying the bills.


  1. Understand the difference between needs and wants.

Yes, you need a new pair of shoes. But does it really have to be Jimmy Choos?


  1. Live on within your means.

This is strongly related to the previous commandment. If your shopping buddies max out their credit cards every time you go out, you don’t have to match their lifestyle just to prove a point.


  1. Don’t just save – invest.

Inflation slowly eats away the purchasing power of your money. This means that you will need more money to buy the same amount of goods several years from now. You need to invest your money to yield interest which will outrun inflation.


  1. Protect your finances through insurance.

Your first asset is yourself and your ability to earn money. Personal insurance will at least give you some degree of protection if you suddenly lose the ability to earn money, like a sudden disability or illness.


  1. Use credit cards wisely.

Do not pay with a credit card what you cannot pay with cash. This means you are using a credit card only for convenience. If you are paying with your credit card because you honestly don’t have money, maybe you don’t need it, or you need a lifestyle check.


  1. Donate to worthy causes and the less fortunate.

Be your best self and give back to your country, community, or Mother Earth.

10. Continue learning and be responsible for your decisions.

Personal finance is a continuing education. Keep an open mind.


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