What are your rules of personal finance?

[Levit]

When it comes to personal finance, what are some self-imposed rules that you follow?
What has worked for you and what hasn't?

Are there any particular personal finance habits you've adopted that you've found particularly valuable?

This may seem a little Slowlane, however, I think it's still important, particularly when starting out.

I started thinking about this after someone sent me this video of Frank Abagnale of Catch Me If You Can fame, talking about his habit of using credit cards for most payments. That's something I haven't done personally, perhaps it is good advice, I'm not sure yet, let me know your opinion on that one too.

 

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[SimpleJ]

Hi Levit! Love that movie CMIFC!

Personally, after twenty plus years of being in the dark of finances I have adopted these rules:

1. Pay everything with credit card (if you are able to control yourself)
2. Pay off credit card before it registers on your credit score
3. Only link debit the necessities (ie, power, insurance [to avoid finance fees])
4. Draft x amount of $$ to savings for future projects/treating yourself

Read this book, "I Will Teach You to Be Rich". Although it is safe, it has the building blocks of basic finances.

Live under your means until you find that Fastlane project!

 

[SimpleJ]

When it comes to personal finance, what are some self-imposed rules that you follow?
What has worked for you and what hasn't?

Are there any particular personal finance habits you've adopted that you've found particularly valuable?

This may seem a little Slowlane, however, I think it's still important, particularly when starting out.

I started thinking about this after someone sent me this video of Frank Abagnale of Catch Me If You Can fame, talking about his habit of using credit cards for most payments. That's something I haven't done personally, perhaps it is good advice, I'm not sure yet, let me know your opinion on that one too.

Seen that video before but never realized it was THE Abagnale! Awesome video!

 

[Levit]

Hi Levit! Love that movie CMIFC!

Personally, after twenty plus years of being in the dark of finances I have adopted these rules:

1. Pay everything with credit card (if you are able to control yourself)
2. Pay off credit card before it registers on your credit score
3. Only link debit the necessities (ie, power, insurance [to avoid finance fees])
4. Draft x amount of $$ to savings for future projects/treating yourself

Read this book, "I Will Teach You to Be Rich". Although it is safe, it has the building blocks of basic finances.

Live under your means until you find that Fastlane project!

Thanks for the reply. I think I read that years ago, the advice was very US-centric though IIRC and I'm from the UK so a lot wasn't transferable, unfortunately

With credit cards, I've always avoided them and somehow still have a good credit score, but I'm warming to the idea more and more recently if I can find a good one.

 

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[SimpleJ]

Thanks for the reply. I think I read that years ago, the advice was very US-centric though IIRC and I'm from the UK so a lot wasn't transferable, unfortunately

With credit cards, I've always avoided them and somehow still have a good credit score, but I'm warming to the idea more and more recently if I can find a good one.

Oh darn, yes... many books are geared to the US! We the ones with messed up finances! We have a credit monitoring APP called Credit Karma. When I signed up, it listed what I would be eligible for. Unknown what is the equivalent in the UK. I'm originally from the Philippines and I remember when visiting that everything was cash based so people didn't really use credit card.

I say, look for the ones with the best rewards program based on your spending habits or travel. Pay off ASAP to avoid the interest rates!

 

[Guest-5ty5s4]

Here’s a slowlane financial tip: if you are paid weekly and you want to save 50% of your income (to build up a runway to quit, invest in real estate or start a business), alternate putting a paycheck into checking one week and a paycheck into savings the next.

You’ll feel yourself picking up speed with this method. An entire paycheck into savings/investments feels good when you’re getting started.

The next step is to use this to launch yourself into the fastlane. Think of it as your gas... or maybe nitrous.

 

[Johnny boy]

My rules are
1. If you're broke don't buy anything nicer than beans and single-ply toilet paper, spend all of your time getting a business going that is scalable.
2. Double your income each year with your scalable business.
3. Have a vision and don't be an insecure bitch who makes a bit of money then immediately blows it. Fixes any lifestyle creep that comes along with the exponentially growing income. If you've got a vision it only makes sense to feed the dream and not feed the urge to buy a lambo right away.

You can have the coolest 'system' in the world for saving a bulk of your 6k a month income and living like an afghan refugee for 20 years. It's not worth it. Just make more money and don't budget. Deal with subscriptions and auto-pay accounts by getting new card numbers every 6 months to a year and then only updating the numbers for the things you want when they inevitably reach out about your failed payment.

Money should be like air. Air is all around you. You're not getting high off it or anything. You are not thinking about it. You're thinking about more important things. You have plenty of air but your life isn't about breathing. You have a little saved up just in case but you know that there will almost certainly be air to breath in the future so you aren't concerned with stockpiling it for no good reason. You just breathe in and out and focus on the things that matter. That's what money is and how it should be in your life. And if it's not like that then fix it, just like you'd fix not being able to breathe.

 

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[originalMJT]

My rules are
1. If you're broke don't buy anything nicer than beans and single-ply toilet paper, spend all of your time getting a business going that is scalable.
2. Double your income each year with your scalable business.
3. Have a vision and don't be an insecure bitch who makes a bit of money then immediately blows it. Fixes any lifestyle creep that comes along with the exponentially growing income. If you've got a vision it only makes sense to feed the dream and not feed the urge to buy a lambo right away.

You can have the coolest 'system' in the world for saving a bulk of your 6k a month income and living like an afghan refugee for 20 years. It's not worth it. Just make more money and don't budget. Deal with subscriptions and auto-pay accounts by getting new card numbers every 6 months to a year and then only updating the numbers for the things you want when they inevitably reach out about your failed payment.

Money should be like air. Air is all around you. You're not getting high off it or anything. You are not thinking about it. You're thinking about more important things. You have plenty of air but your life isn't about breathing. You have a little saved up just in case but you know that there will almost certainly be air to breath in the future so you aren't concerned with stockpiling it for no good reason. You just breathe in and out and focus on the things that matter. That's what money is and how it should be in your life. And if it's not like that then fix it, just like you'd fix not being able to breathe.

The most sound money advise i have read so far on this forum.

 

[SparksCW]

Money should be like air. Air is all around you. You're not getting high off it or anything. You are not thinking about it. You're thinking about more important things. You have plenty of air but your life isn't about breathing. You have a little saved up just in case but you know that there will almost certainly be air to breath in the future so you aren't concerned with stockpiling it for no good reason. You just breathe in and out and focus on the things that matter. That's what money is and how it should be in your life. And if it's not like that then fix it, just like you'd fix not being able to breathe.

Very well said.

 

[Andy Black]

Something to consider:

Setup at least two personal bank accounts.

Get your salary paid into your #1 account, and automate paying your monthly expenses from there.

Get #1 account to automatically pay weekly into #2 account. That’s your disposable income.

Don’t have a card for your #1 account. If you lose your wallet people can only take what’s in your weekly pay account.

Consider another account for weekly grocery shopping, or figure it out with the two accounts.

 

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[BD64]

Agreed with most of the above but a couple of things that I actively think about:

• Pay off bad debt ASAP (Credit cards for example. High rates, doesn't serve you in any way to keep a balance)
• Avoid life creep by scaling your spending categories in tandem (While in growth mode I distribute income as such: 30% goes to needs, 20% to wants, 50% I reinvest)
• Have 3-6 months reserves that would feed you if you had literally zero income and couldn't cut expenses
• 80/20: focus on the big things. If you are living in an apartment that is too expensive you should focus on that rather than worrying about your daily Starbucks run.
• Cash flow is the cure-all solution to your financial woes. Go get that green.

 

[Kevin88660]

Always choose spending money instead of spending time.

Easier said than done though.

If you feel that the money is not worth it then whatever you are doing is not worth it.

 

[Kak]

I try to live off a number less than my average investment income. But I don't really budget. It is obviously a changing figure so it doesn't always line up. I do this for three reasons:

1. Time. Even if I quit my businesses, sell my businesses or my businesses go under, it doesn't matter. I am used to living on money that replenishes. Financially speaking, I am essentially retired without sitting on my a$$. I have unlimited time to do whatever I want to do. I am free to quit. I am free to give my businesses no attention. Whatever. All stuff I probably won't do anyway.

2. I understand going in that the primary reason for my businesses is to add to that principle, not an income to grow my lifestyle into.

3. Legacy. Establishing more than just a couple million dollar nest egg to screw around on. I want multi-generational wealth due to my efforts. To establish my family long term.

SO let's say I add 1m per year in income, after taxes, that should just plow directly into my principle, raising my average I allow myself to spend. I already have a nice home, money for cars, dinners out, golf and vacations. So... It's really just for fun and profit now. A game to play.

I am also NOT a minimalist.

NOW, this is a personal plan. It works for me. As far as my businesses are concerned, I run them to minimize my time input at the expense of money.

 

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[Kak]

3. Have a vision and don't be an insecure bitch who makes a bit of money then immediately blows it. Fixes any lifestyle creep that comes along with the exponentially growing income. If you've got a vision it only makes sense to feed the dream and not feed the urge to buy a lambo right away.

Love this

 

[pumpkinman]

I live as minimally as possible. I generally only spend money on food, my car, my phone, my house. I have the internet and a laptop and that supplies my entertainment needs adequately. I don't use credit cards, only spend what I have. I am not rich yet though, these are rules that helped me get out of debt initially and I've kept them around.

 

[Ing]

Money should be like air. Air is all around you. You're not getting high off it or anything. You are not thinking about it. You're thinking about more important things. You have plenty of air but your life isn't about breathing. You have a little saved up just in case but you know that there will almost certainly be air to breath in the future so you aren't concerned with stockpiling it for no good reason. You just breathe in and out and focus on the things that matter. That's what money is and how it should be in your life. And if it's not like that then fix it, just like you'd fix not being able to breathe.

Allways in my life, when I lived like that, life is good. ( And I m far from fastlane)

Really well said!

 

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[Ing]

• Cash flow is the cure-all solution to your financial woes. Go get that green.

Thats a good one!

 

[Surf16]

When it comes to personal finance, what are some self-imposed rules that you follow?

I just finished reading "The Richest Man in Babylon" by George Samuel Clason. Had some great lessons to take away in regards to making, saving and investing your money.

 

[MJ DeMarco]

Not really rules of finance, but I posted some good rules on how to preserve wealth...

GOLD! - HOT! - INVESTING - Personal Rules to Avoid Losing Your Wealth

A question primarily for those who have amassed at least six figures in savings - do you have any personal rules to protect yourself from stupid decisions that will make you lose your wealth? For example, here are a few basic rules I follow: I don't gamble or invest in anything resembling it...

www.thefastlaneforum.com

 

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[lludwig]

• Try to keep liquidity at least 30 days away, best case, 1 day.

What do you mean by this @MJ DeMarco ?