1. Live within your means
This is probably the most important financial rule and the hardest to live by. If your friend or neighbor buys a new car or takes a lavish vacation you may ask yourself, “Why can’t I do that?” Take the time to review your priorities and your finances before making any major financial decision. Usually if you wait a few days the urge for the “must have” goes away.
2. Pay yourself first
Do your best to establish an emergency fund because you never know when your car may need a costly repair or an appliance in your home will need to be replaced.
3. Pay your bills on time
Having good credit will usually get you a better interest rate when it comes time to get a loan.
4. Don’t waste money on designer items
See #1 above. Most everyday items have high, medium and low-cost alternatives. Inexpensive goods may need to be replaced more often and high-end items are usually over-priced. Treat yourself once in a while, but remember to appreciate what you have because there are always people who are less fortunate.
5. Save for the future
The easiest way to save on a regular basis is if you don’t have to think about it or you don’t see it happen. Set up an automatic transfer to a holiday or vacation account so you don’t have to use credit cards when the time comes. Don’t spend money you receive as a gift – this will allow you to save with nothing out of your own pocket. If you are working, contribute to a 401(k), IRA or Roth IRA. Let the powers of compounding and tax-deferral work for you!