Most of us make financial decisions every day—whether consciously or subconsciously. From the food we choose to eat, to how we travel to work, and what we do in our spare time, we are constantly making spending choices. But how do we make those decisions? Is it out of habit? Based on our moods? Or perhaps because it’s the easiest way to save time?
Chances are, we could all benefit from a more structured approach to managing our money. Why not adopt the following basic rules to help gain greater control over your finances?
Essential Rules for Managing Your Money
Don’t spend more than you earn
It can sometimes be difficult to track how much money is coming in and going out of your accounts. Therefore, it’s important to review your finances regularly so you fully understand your income and expenses. Only by knowing exactly how much money you have to work with can you stick to this rule and avoid getting into financial trouble.
Settle your debts as soon as you can
Debt isn’t necessarily a bad thing. Many of us need loans for big-ticket purchases. However, it’s essential to take your debts seriously. Prioritize paying them off, and always be clear about the repayments and interest before taking on debt. The quicker you pay off your debts, the less interest you’ll end up paying. Also, try to clear existing debts before taking on new ones. It’s okay to borrow money for one or two significant expenses, but taking on too much debt can stretch your finances too thin. If that means delaying a major purchase, so be it.
Make sure you know where you are
How much is in your checking account right now? What bills are about to come out, and how much are they? If you can’t answer these questions, it will be difficult to make informed spending decisions. By downloading your bank’s app, you can check your balance on the go before making any purchases. This way, you can avoid ‘buyer’s regret’ when you realize what you’ve spent later.
Always ask: Do I need this?
Whenever you make a significant purchase, ask yourself if you really need it. Special offers or flashy packaging can be tempting, but sometimes we end up paying for things we don’t use or truly need. It’s perfectly fine to put something back on the shelf and check at home to see if you actually need it, or to give yourself some thinking time to decide if it’s something you still want. In some cases, you might decide to buy luxuries that serve no purpose other than bringing you happiness. That’s fine, as long as you’re aware of it and know you can afford it.
Also ask: Can I get this cheaper?
It’s always a good idea to check if you’re getting the best deal. This is especially true for your household bills. Don’t treat your current expenses as fixed costs. Shop around for better deals whenever possible. This doesn’t have to be a hassle. Services like Bill Snip offer a bill negotiation service, where you can send them a copy of your bill and they’ll see if they can find a cheaper deal for you.
Develop a savings habit
Saving some of your income is always a good practice. Many people like to think of this as “paying yourself,” treating savings as a fixed monthly expense. How much should you save? The simple answer is: as much as you can. However, as The Balance suggests, aiming to save ten percent of your salary is a solid target.
Book yourself in for a regular health check
A regular review of your finances ensures you stay on track with savings, debt repayment, and managing high expenses. Schedule a financial check-up every few months to prevent bad habits from taking root.
Keep these fundamental rules in mind, and you’ll be able to make smarter spending choices—both big and small—throughout your day-to-day life.
