I believe there are 7 money rules that are core to helping deliver the lifestyle you desire. By following these rules you will give yourself every chance of making money work for you.

Having money itself doesn’t make you happy, but not having money or managing money poorly can make you very unhappy.

It’s time to get control of your finances, get rid of any stress you have with money and change your ways so money is a force for good in your life.a referee confirming money rules

Don’t worry though, although making money work for you is simple it’s not easy and there is a whole system against you. So don’t be hard on yourself if you’re in financial difficulty or you get things wrong from time to time. By deciding to make a change and working through these 7 money rules, you will put all the building blocks in place so you get the life you want.

The 7 Money Rules in no particular order

Rule #1 – Always pay yourself first

As the world’s most famous investor Warren Buffett puts it:

“Do not save what is left after spending, but spend what is left after saving.”

This is also explained perfectly in the brilliant book ‘The Richest Man in Babylon’ by George S. Clason which I would recommend to anyone who wants to make money work for them.

As soon as your wages hit your bank account allocate an amount into savings. Do this before you have had a chance to spend any of your money paying other companies for goods and services.

Try and come up with an amount you can afford to save that isn’t going to leave you short paying bills and having fun.

Save first and then spend. Do it this way round because if you don’t and try and save at the end of the month once you have finished all your spending you will find there is very little left!

Rule #2 – Automate and forget

If you understand rule #1 and are ready to start paying yourself first, rule #2 is about the best way of doing this.

Depending on when you’re paid (weekly, monthly or something different) will determine when you need to pay yourself first. Remember you want to save as soon as you’ve been paid, before you get the chance to start spending.

The best way to do this is set up a standing order, directing a weekly or monthly payment straight into your savings account. Make sure the standing order is set up for the day or day after you get paid. This way you don’t have to remember to do anything. When you come to check your bank account after you’ve been paid your saving will already have been made and you can spend what you like the rest of the month or week without feeling guilty.

Don’t leave it to chance. Trying to remember to actually move money into savings each month or week is difficult, life will get in the way and before you know it you have already started spending!

Rule #3 – Always know where you are

Making money work for you means being in control of money. You need to understand what effect each money decision has on your overall position.

Spending without knowing how it affects your position means money is controlling you and you could be being blindsided by all the marketing going on out there.

Knowing where you stand means you can understand what you need to do to get to where you want to be. Whether that’s to buy your first house, sell a business, retire etc.

Rule #4 – Don’t sacrifice living tomorrow for living today

You’ve probably all heard the comment along the lines ……. “I’m going to enjoy myself now because I could be hit by a bus tomorrow.”

Whilst it’s essential to enjoy your life, statistically you are much much much more likely to live tomorrow and the next day and the next day than you are to be hit by a bus or die young.

There’s a good chance a lot of us living today are going to live to at least age 100.

So whilst we should always aim to enjoy life we do need to find the right balance between enjoying ourselves now and still being able to enjoy ourselves in the future.

One example of doing this is thinking of your money in three different pots. Pot 1 for essential living, pot 2 for enjoying today and pot 3 for future enjoyment.

Rule #5 – There’s good debt, bad debt and ugly debt

People think all debt is a bad thing and that’s simply not true.

Good debt can be a useful tool in making money work for you.

Good debt includes student loans and credit cards used cleverly e.g. making use of them in the short term using interest free periods, extra protection for online purchases and cash back on purchases.

Bad debt includes credit cards that you can’t afford to pay off in full and therefore are being charged high interest rates on your monthly repayments.

Ugly debt includes pay day loans charging ludicrous interest on your repayments. These should be avoided at all costs.   

The key is to be in a position that when you use debt it’s because you choose to, not because you need to.

Rule #6 – Don’t worry about keeping up with the Joneses

In the age of Facebook, Instagram and other social media platforms it is now, more than ever, hard to get away from people showing off about how great their life is.

Businesses love this and encourage it so you feel pressured into buying their goods and services.

But remember, most of the images and stories are exaggerated. Who really has 1000 friends? If someone spends half their time glued to a screen taking selfies on holiday are they really enjoying it?

Material possessions are not a reflection of how wealthy someone is. For all you know, your friend’s new sports car could be costing them a fortune in loan repayments.

Spend your money surrounding yourself with real friends and experiences that give you real joy and satisfaction. You will be better off in the long run.

This leads nicely onto rule #7….

Rule #7 –  The best things in life are free

Hopefully you realise by now that these money rules are not trying to take away all the fun out of life and make it so all you do is save. Far from it. It’s about balance.

Having said that, it is a lot easier to save when you realise the best things in life are free. Being with the people you love, being outside on a summer’s day or throwing snowballs in the winter. These experiences don’t cost a thing.

Most people on their deathbed, when asked if they have any regrets in life, don’t say “Oh I wish I had bought that car or new TV”, they usually say “I wish I had spent more time with this person or that person.”

So remember we have one life, live it to the full both now and in the future.

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