What Are The Most Important Rules of Personal Finance?

1)The First Rule of Holes: If you’re not in one, stop digging. Of all the ideas presented here, this one shouldn’t require much explanation. Consider this: How much good can you accomplish when you just stop doing something bad.

2) Hope is not a strategy. Hope carries value. Hope is vital. Hope is your gasoline. Your financial improvement SUV won’t be going anywhere without fuel, but on its own, the fuel is no good. It takes more than hope to improve your financial situation. You also need support, information, tools, motivation and much more. In short, positive impact comes from action. Behaviors must be precisely targeted, discarded or developed. Big changes must be made, and you must initiate them.

3) It will not get done unless you do it. The first step to financial freedom is recognition –-recognition of your current situation, obstacles and capabilities. If you’ve been relying on others to get you where you want to go, then stop. If you think a hefty inheritance or winning the lottery will come along and bail you out someday, it won’t. If you’ve been blaming others for the negative positions you might find yourself currently in, then stop. No one will execute your personal interests better than you. Take control of your life. Stomp the gas. Be the driving force.

4) When it comes down to reasons to do something versus excuses not to do it, there will always be more excuses. Humans can be a negatively charged lot. Consider that society has trained the majority of people out there to think in terms of “Well, I can’t do this because…”, and their minds revert to this whenever they’re confronted with a task or goal that seems even a bit formidable. So, starting now, direct your thought processes into a U-turn. Live with the words, “I will do this because…” Write them down. Those five words help big accomplishments get off the ground.

5) You cannot save $5,000 until you save $1,000. You cannot save $1,000 until you save $500. You can’t save $50, until you save $10. Even the greatest accomplishments start out small. If you’re looking ahead and getting frustrated because all you can see is how daunting your tasks/goals are, then break them down. Divide your work into steps. Make them smaller, more manageable. But keep them big enough to still be tangible and fulfilling once they’re accomplished. With each step, that sense of progress you’ll feel is what will keep you going. Anything can be accomplished if it is done a little bit at a time.

6) Doubt is expensive. Remember Benjamin Franklin? Thomas Edison? The Wright Brothers? Bill Gates? History remembers the “doers”, not the doubters.

7) You can’t out-earn stupidity. Money problems-when they happen-aren’t caused by the money you make (or lack of it). They’re caused by the way you spend the money you make. So the next time you hear someone blame their financial situation on “low wages” you’ll know better: They’re making excuses. Responsibility begins with the person. Where it ends is a matter of effort.

8) Stupidity is a four letter word: DEBT. One absolute truth: Debt is a stranglehold on your family’s future. So if you have it-well, other than mortgage debt, get it paid off. Do this as fast as you can. You owe it to no one more than yourself. Lose debt; gain freedom.

9) Expenses will rise in proportion to income. It’s the mantra of the Discouraged Consumer, usually heard at bill paying time: “If only I made more money.” But without a change in mindset and a strict financial discipline, the more “money” that occurs every so often via a raise in pay, tax refund, or whatever, will always be accompanied by a proportionate rise in expenditures. Thus the saying: “All I want is to make ends meet—but someone keeps moving the other end. More money does not solve the problem; financial intelligence does.

10) Know the difference between assets and liabilities. The majority of people go through life without truly understanding the difference between assets and liabilities. The rich got where they are by purchasing assets.