Introduction: Embarking on a journey towards financial prosperity requires a strategic approach to personal finance. Explore the fundamental rules that pave the way for a wealthier life. From mindful spending to securing your future, these principles are the stepping stones to financial success.
1. Live Far Below Your Means: The easiest way to become wealthy is not to increase your lifestyle based on increase in income. It is the only way to avoid Rat Race. Buy Luxuries at last. Try to SAVE as maximum as possible. (This is 50% personal finance learned)
2. Record Daily Expenses: We can achieve what we can measure. Always record routine expenses & analyze where you are spending more. Limit over budget expense at earliest.
3. Avoid Social Necessities: Never ever fall into the trap of social necessities. These are expenses incurred to have an impact on relatives, neighbors, colleagues etc. Tomorrow when you will not have any money, these people will laugh & avoid you instead of giving any helping hand. So, it is ridiculous to spend in order to have an impact on them. Let them think that you have nothing. Build yourself internally & Silently. Remember Wealth is what you don’t see.
4. Choose Your own Luxury: Spend on luxuries never for the sake of showing off but only if you love to experience it. Everyone has its own kind of luxury but maximum people make their luxury based on what’s trending on social media even if they don’t like that particular luxury. So Choose your own luxury only for yourself.
5. Health Insurance: Must take health insurance of family because medical emergencies can suck all savings in a fraction of moment. Don’t think its premium as expense.
6. Term Insurance: Must take basic term plan for earning member of family upto the years till when you believe that you will earn enough to last your family for lifetime. In case of untimely death, this term plan will take care of the family.
7. Emergency Fund: One must have an emergency fund of atleast 6 months of income or 12 months of expenses.
8. Debt are Evil: Never ever take loans. Always try to avoid loan as much as possible.
9. Credit Cards: Have a credit card with Zero charges (Annual or joining). Have it only for emergencies. Use it for only those amount which is already there in your bank account. Never ever use it for the amount which is to be inflow in your account in future.
10. Future Money is No money today : Never ever take any action be it physical, emotional or financial based on future inflow no matter how much certain it is. Money actually received in hand is the only money we have.
Conclusion: Mastering personal finance is the key to unlocking a wealthier and more fulfilling life. These ten rules provide a roadmap to financial success, guiding individuals to make informed and strategic decisions. Embrace these principles to build a secure and prosperous future.