10 Money Rules for Financial Success

A few years back, I was always in the very  frustrating place where bills would constantly   pile up and yet I had no money to pay them off  (If you have ever been in this situation then   you probably that it can be really stressful  and hard on you). The good news is that,   over time I did manage to prowl my way out of  this situation, and you can too.

Therefore,   in today’s video, I’ll be sharing with you all  tips, tricks and strategies that you can use   to get out of this situation, and hopefully get  ahead in your own personal finances. Stay tuned. However, before I get into the topic,  do me a favour – subscribe and hit   that like button because it really  helps with the YouTube algorithm. Thank you, and now let’s get into it. Alright, so, the list begins with… 1. Keep track of your spending. You’ve probably already heard this a million  times and you are going to hear it again today,   simply because it works and because you are  probably not doing it. Basically, it should always   be a priority. Make sure that every single penny  you spend is clearly accounted for. The basic goal   of expense tracking is to find and get rid of  inefficient spending patterns in your financial   life.

Additionally, maintaining control over  your finances and encouraging better financial   practices like saving and investing will come  from continuously keeping track of your costs. Basically, in the words of Peter Drucker, “If  you can’t measure it, you can’t manage it”. So this is what you should do to get in  control of your spending habits: First,   analyse your categories of spending to determine  which are the most crucial. Perhaps you might   even find out that you've been paying for a  subscription that you’re not using (I know I have,   and maybe you are too). Most people  consider that cutting back on these   “non-essential expenses” is a wise approach  to saving money. You might also want to go   for activities that are less expensive now  that you can see where your money is going. And on top of saving money, you’ll  be getting educated on some of the   topics you’ll be reading about.

So, there  really isn’t much to lose by doing this. 2. Make a budget. I never understood why most people didn’t  have a budget until recently. You see,   most people are worried about all the paperwork  to be done to complete a budget. Well, in truth,   it’s a lot of work, but it most certainly  is worth it. You see, you should look at   budgeting from a different angle. Look at the  positives and look at how much is it going to   benefit you. And once you’ve got a rhythm  going, make sure you stick to it. I’ve   found this to be the only way that works.  So make sure you don’t lose the momentum. If you create a budget and then store it  away in a file or folder on your bookshelf   or filing cabinet, it’s simply worthless.

So  make you’re constantly updating and review it,   you can also use digital apps and software  to make this task a lot easier. There are   a bunch of really good free ones online,  which you can find with a quick search. And if you are interested, I created a  free savings and budgeting guide which   you can get with the link in the descriptions. 3. Give yourself a limit on unbudgeted spending. Buying something in the spur of the moment that   you hadn't budgeted for, can be enjoyable  and emotionally satisfying – literately   everyone knows that. However, that  emotional high may pass quickly,   leaving you with impulsive purchases  you don't actually need - or want. If this is you, then then the  bitter pill to swallow is that,   this has to stop! In fact, it’s the  entire opposite of good money habits. Next time you are in the mall, try using the 1%  rule for spending money. This rule states that,   you have to wait a day before buying anything that   costs more than 1% of your yearly gross  income, so if you make $60,000 a year,   the rules states that you need to a day  before making a purchase of over $600.  This guideline applies to discretionary  spending on items you desire but don’t require,   basically, the inner battle in your mind of  “do I really need this” vs “do I want this”.

The 24-hour cooling-off period gives you time  to reconsider your purchase. Why not take an   additional day to consider if you actually need  it? After 24hrs you might not anymore. So next   time you go shopping remember what that  guy from practical wisdom told you to try. 4. Save for big purchases. Seeing a beautiful $4,000 advertisement  of a stunning 90-Inch flatscreen,   8K Television – I mean, Imagine the  things you can see on that TV… Dose   not mean that you should immediately pick up  your phone and credit card and start dialling   the number on the screen. That’s a really  bad idea. Remember the rule that rule the   guy from Practical wisdom told you  about, the 24hr one? Remember that? So, experts suggest that if you really want  that big TV then it’s best that the money comes   from your savings account which is dedicated  for such purchases. Not a credit card loan,   unless you have a really good plan to pay  the money back, which 99% of people don’t. Also, there are countless advantages that  come with saving for a big or expensive   purchase. You may be able to negotiate  a cheaper price, or at the very least,   better financing conditions, if you save up  and pay cash.

The price could drop as well. Additionally, for a larger purchase,  getting a loan may make more sense,   especially if it's an item with  appreciating value, like a home,   or if it prevents you from taking money  out of your savings or investment account. As paying in cash for the big expensive  TV might leave you with little to spend,   therefore it’s wise to save up for a while  before you buy the products you need or   desire. Therefore, it’s sensible to start  saving for that specific thing so that your   daily life is not disrupted. 5. Read books about finance It’s true when they say that  if you want to hide something,   just put it on paper. The sad truth is that  - most people never bother to read. You see,   some of the things people choose to ignore,  such as the information contained in books,   has a good chance of making them  successful if they bother to read them. Learning is a continuous process, and the more  you do it, the sharper your skills become. The   ability to make wise financial decisions is  the chief advantage of financial literacy.

It   gives us the information and abilities we need to  properly manage our finances, including budgeting,   saving, borrowing, and investing. As a result,  we are better positioned to meet our financial   objectives and establish financial stability.  It’s kinda like a super power, and it really   puts you in a comfortable situation knowing that  you are in control of your financial destiny. 6. Lower your monthly bill. Cutting your monthly spending is one of the  simplest ways to gain control of your money.   While you might not be able to cut back on  certain permanent costs, like rent or vehicle   payments without making significant lifestyle  changes, you can cut back on variable costs,   like clothes or entertainment by being adaptable  and thinking sparingly. To begin saving on   things like your energy bills, you may, for  instance, use less power, pick a different   life or home insurance company, or shop for  your groceries at bulk discounts. Additionally,   you shouldn't accept a loan just because your  salary and credit make you eligible for one. Many people believe that the bank will  not give them a credit card or a loan   that they cannot afford. But the bank is  only aware of the income you have disclosed,   and the debts shown on your credit report;  the bank is unaware of any other commitments   that would make it difficult for you to make  timely payments.

Based on your income and other   monthly responsibilities, you must therefore  determine if a monthly payment works for you. 7. Eat at home. Meals prepared and consumed at home may be quite  cost-effective. All you have to do is reduce your   reliance on takeout. The odd indulgence at a fancy  restaurant is OK, but starting to cook at home   or carrying packed lunches to work rather than  dining out every day might save you money.

Making   a weekly food plan may make it simple. Plan your  meals for the coming week and then stick to them.   Even for those who don't consider themselves to be  cooks, the internet provides a seemingly limitless   array of culinary and recipe advice. Begin by  making at least one meal a week at home. Bring   your lunches to work starting next week. You might  be amazed by how much money you can actually save! 8. Pay off your debt. Carrying a lot of debt, especially on  high-interest credit cards, is one of   the costliest mistakes you can make. If you want  to improve your financial situation and open up   new financial opportunities, pay off your debt as  soon as possible. If you’re the forgetful type,   you should list off all your existing debts,  including credit card debt, student loan debt,   and vehicle loans, and determine the minimum  payments you must make to stay on top of each   of them.

Making minimum payments will not get you  out of debt quickly, so consider your fixed costs   and how much of your discretionary spending  budget you can set aside for debt repayment. Additionally, you can try to lower the interest  rate on the debt by requesting a lower rate from   the issuer, merging several loans into one,  or moving high-interest debt to a low-interest   credit card, such as a balance-transfer card,  to lower the overall interest rate. Afterward,   create a debt repayment strategy and develop  responsible spending practices to pay off the   debt as rapidly as possible.

Your monthly  budget will be larger the faster you pay   off your debt. As I previously said, paying  off credit card debt must be a top priority.   Unlike your automobile or house payment, it  increases with time and is hard to cut back on. 9. Stop using credit cards. Credit cards are a great and handy tool to have,   they are a life saver when needed and they do a  great job getting that credit score up. However,   for some people there lack of self-control  and an easy and available remedy to their   problems in the form of a credit card means  that they quick dig themselves into disaster. You could be depending too much on your  credit cards if you are having trouble   making ends meet each month. If you continue  using your credit cards as a crutch to get by,   you'll soon find yourself in debt. Your ability  to pay your expenses, save for retirement,   or pursue other financial objectives  will be constrained as a result of this. So stop using your credit cards if you genuinely  want to take charge of your money. To prevent   accumulating more debt, in addition to creating  a budget so that you don't have to use credit,   try switching to cash or debit cards;  opening a short-term savings account and   using funds from it for major purchases;  or leaving your credit card at home.   Credit cards have high-interest rates that may  quickly accumulate debt if not used wisely,   and can cause significant stress  in the event of an emergency.

Because they feel like their money  disappears too quickly each month,   many people develop the bad habit of depending on  their credit cards. They are tapped out and rely   on their credit cards to get them through till  payday after paying bills, food, rent or mortgage,   and other expenses. Instead of relying only  on your credit cards to cover expenses,   stop using them altogether. Until you develop the  wisdom and maturity to handle such an instrument. 10. Continue to spend quickly. A "spending fast" can be just what your personal  finances need if you suffer from credit card debt,   difficulties paying payments on time  or other financial problems.

Basically,   going on a “spending fast” simply  means that you’re refraining from   making any discretionary purchases  for a predetermined length of time. This is another great way to help you reduce  your spending and get your finances in order.   It may sound a bit daunting, but it doesn’t  necessarily have to be. You may be familiar   with the well-known (and sometimes contentious)  "detox" or "cleansing" fasts for your body,   such as giving up sugar or gluten for 30 days  or even surviving solely on fruit or vegetable   juices for a few weeks. But did you know  that in order to achieve financial wellness,   you may use comparable fasting or cleansing  procedures to your spending and saving behaviours? These are frequently month-long periods  during which spending is restricted and   only categories like food, transportation, and  recurring expenditures are exempted. If you're   ready to live simply for a while, commit to  this challenge to boost your bank account,   alter your behaviour, and determine what  you need rather than just what you desire.   Your perspective on money can even  change as a result of the event. It’s my hope that this has been helpful  to you.

Now you can always be one step   ahead of your finances by just following  the steps from this video. Consider the   possibility that you have never had a  financial problem. That simply means   more money for you. If you have any questions,  don’t hesitate to leave a comment down below. With that said, thank you  all so much for watching,   have a great day, and I’ll  see you in the next one.

As found on YouTube

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