No matter the time and age, there are timeless personal finance rules you shouldn’t break if you want to get a hold of your finances this 2016. If you can manage to stick to these rules for the entire year, your financial life is in for some surprise. Though some of these rules may be hard, they have worked time and again. So if you’re ready to improve, boost or give your finances an overhaul this 2016, here are 7 unbreakable rules you should know about.
Set financial goals
If you want your financial life this year to go somewhere then it’s high time to set some financial goals. Consider your financial goals as a map or guideline for this year’s financial journey. Set both short term and long-term goals. And make sure all goals are realistic, reasonable and reachable.
Save and Invest
You’ve probably heard the advice to always “pay yourself first.” For some, that might mean treating yourself to a shopping free. That’s not it at all. When financial experts say to pay yourself first, it means to save and invest money. Paying yourself in this sense means to save up for emergencies and other expected expenses. It’s basically financially-proofing yourself for the unexpected.
Live within your means
Living within or below your means is easier said than done. With the lure of instant gratification, swiping your credit card for a much-needed shopping therapy is more tempting than ever. But regardless, you need to learn the art of living within your means if you want to control your finances and not the other way around.
Create more income
If you can’t live within your means then you might want to try this unbreakable rule instead. Create more income. Again, this is easier said than done but if others can do it so can you. Sometimes, it’s a matter of time management so you can squeeze in another job. Maybe you can become a freelance writer or create a blog you can monetize. Either way, the goal is increase your income to cover all your expenses and save some money in the process.
Pay your bills on time
This sounds like common sense but many people continue to break this rule time and again. If you’re really serious with making your finances right or better this 2016, you need to start committing to paying your bills on time. This includes all your bills. From your utility bill to your phone bill and more importantly credit card bills, you need to pay them on time to avoid hefty interest rates and penalties.
Limit your debt
One of the most dangerous financial mistakes you can ever commit in any lifetime is to get drowned in huge amounts of debt. Though not all debt is bad, most of them can put a cramp on your finances. The best way to handle debt is to limit them or not have any at all if possible. If you are currently knee deep in high interest debts, it’s time to create a debt repayment plan. If you must hire a financial advisor to help yourself get out of debt, do it.
Plan for your retirement
Retirement may be several decades away from now but it’s never too early to plan for your retirement. Other than your emergency fund and regular savings, investing for retirement is a must if you want peace of mind when it comes to your finances and your future. If you’re employed, make sure to avail the full company retirement offer.