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Six Money Rules To Follow Until You Die

It probably goes without saying but everyone should have a set of “money rules” or financial

principles that govern their spending habits.

Setting boundaries, especially financial, can help balance your relationship between spending and saving; these boundaries can ultimately make your life much happier when you identify what (or who) deserves your hard-earned money.

However one-size-DOESN’T fit-all. The keyword in personal finance is “personal” and your approach will be guided by your goals and aspirations and that’s perfectly okay! So, let's look at the basics to get started;


1. Never question spending money on your education

In the wise words of Warren Buffet,

“The most important investment you can make is the investment in yourself”

Education comes in many forms, and tertiary education is simply one option. However, at some point in your career you may become more interested in learning about building a brand and diversifying income outside of an employer and take time to do courses and read or listen to a few more books in the pursuit of this goal.

Your income is your greatest wealth-building tool, and investing in that is never a waste — and for some people, the more traditional route of attending university may only be the beginning.


2. Buy quality over quantity

After flushing thousands of dollars down the toilet in your youth at low price stores, swear off fast fashion once you turn 25 ! Too many of us fall into the trap of buying cheap clothing, shoes, etc., thinking that we’re being savvy shoppers who know how to spot a deal — that’s false.

We all know that low cost stores aren’t exactly famous for producing quality items that last a lifetime; most pieces of clothing last a handful of wears before a button pops off or a thread comes loose, shop smarter by leveraging sites on the internet for discounted, quality clothing. You’ll find suits, dresses, etc., that are brand new with the tags but are from “last season,” and thus, the prices have been reduced by 30% or more.

The bottom line: stick to classic, quality pieces that will stand the test of time to avoid constantly replacing your wardrobe. Not only is buying quality better for your wallet, but it’s also better for the environment (less waste in landfills).


3. Never pressure yourself to buy a home

There’s nothing wrong with buying a home, a primary residence is an investment as well as a place to live; however the opportunity cost of not investing the deposit should be considered before making the purchase.

The housing market in many cities has been pure chaos this past year — the combination of low-interest rates, people moving out of high-cost of living cities to rural and regional areas, rising timber prices, new construction permits being down, has caused the prices of homes to skyrocket in many cities.

So, don’t go buying the first home that pops up on the market in the city you want to live in, just for the sake of “securing a home”.

Our advice to any other home buyers is simple — set a budget and stick to it. A home will most likely be your most expensive purchase, and thus it’s important to not make a short-sided decision.

If a home within your price range isn’t active on the market, wait it out; renting another 6 months, a year, etc. isn’t going to kill you.


4. Always keep some cash available but don’t overdo it

One of my biggest financial regrets for some people, is sitting on too much cash. People get paranoid something terrible is going to happen and that they will need access to money asap. Many financial experts recommend keeping 6–12 months of living expenses in savings. This is a strategy built on fear, not optimism and with interest rates for savings accounts are pretty lousy right now, so it is important not to let too much cash just sit there.


5. Radical but money is the cause of many a divorce marry someone with similar financial habits

This is a tough one, but it is an important conversation to have — the person that you choose to marry can make or break your financial future. For example take a person who is extremely fiscally responsible that doesn't believe in debt, their home is paid off, and they’ve never taken out a car loan or have a credit card .

They marry someone who doesn’t share these values and now you have a major conflict brewing and may not be resolvable.

This mismatch is not new and may put an undue strain on the marriage.

The moral of this story is that financial compatibility is vital, and choosing a spouse that shares your values is crucial because there is often not a lot of change out of a divorce.

6. I’ll never sacrifice my freedom in the pursuit of money

Freedom is money in the bank. Enjoy the work you do, and join a company that has a relatively good work-life balance. Pursuing money often leads to long working hours, traveling constantly, and having no life outside of work.

If you want to make more money, leverage yourself. Be clever and make money make money !

There’s such a sense of accomplishment of being able to go out on your own and make money outside of your day job.

These six money rules are the basis of your peace of mind and clarity for managing your finances. By setting financial boundaries, you never waste time deciding where to spend or where to save.