Money Rules of Thumb

[HousingCounselor]

Save three to six months of GROSS MONTHLY INCOME and not EXPENSES in emergency savings.

Be cash rich and have a poor lifestyle.

Buy a car and drive it till the wheels fall off. Saving your car payment giving you cash to buy one outright when you need to.

Mentally buy big ticket items before you physically do. (do research on the purchase first, evaluate if you really need it, can you save up for it first?)

Record your credit card transactions in your check register so you know you can pay it in full when the bill comes.

[ez1]

For investing, always buy low and sell high. Yes, that means when others are in a buying frenzy, you'll be selling - but it also means you will make money.

[RedSilk]

Money is a means to an end, not the end itself.

Spend on what will make you happiest and save on everything else.

[Nightfly]

Income

Most of these replies focus on saving and thrift - which are certainly part of a smart financial lifestyle. But you should also focus on your income:

1) Can you start a side gig?
2) Get certified in your chosen field by taking some tests? (Notice I didn't say "go back to school", which is usually too costly in terms of time and money)
3) Work overtime? (Usually more cost-effective than getting a second job)
4) Get a second job if your time permits? (If this only affects your T.V. viewing time, you're better off with the additional paycheck anyway)
5) If you're a youngster (or young at heart), start the proverbial dog walking, lawn mowing, baby sitting, elder care, or errand running service?

So I guess my "money rule of thumb" would be: increase your income (but also reduce your expenses, obviously).

[Gary Barzel]

Create a budget of your monthly expenses. Always record where your money is going, even if it's to buy a cup of coffee. Never buy anything that you want, if there are things that you need but don't have.

[PMMM]

All great ideas. I think there is some good information here. I have one to add that I think adds value to any household.

I have an online checking account that pays 2% on ALL purchases bought on the debit card they provide if you maintain at least 5K in the checking account. If you have less than 5K then they pay 1% on all purchases. The caveat is that you have to use the credit type purchase do not enter the pin for the debit. But that's not a problem all vendors do that. Just tell em credit not debit. It still comes out of your account like debit though the transaction may take a day to two to clear.

That is significant savings. Where can you get 2% on any money right now? It's worthwhile to keep an eye out for things like this that can save you money.

[Eric80]

My personal rule of thumb when it comes to money is to save and spend wisely. I like to save for emergency purposes and vacations each year. I am not a frugal person and do tend to spend, but I try to spend wisely for example when there is a promotion on an item I use, I stock up and save for the future.

[srblanco7]

Save a minimum of 15% of gross income (preferably 20%) for retirement.
Only acceptable debt is mortgage
Once car is paid off - continue to save monthly payment to provide cash to purchase next vehicle
Buy 2-3 year old (new to me) vehicles
Invest with a buy and hold mindset - don't try to time market
Invest for retirement as first priority and kids college fund as second priority

[lodoren]

I agree with all the ideas given. I also say "If I can't pay cash for it, then I can't buy it." Live well beneath your means. Pay yourself first, keep up your savings, never have balances on your cards, pay everything on TIME, and never make yourself a slave to someone else by being in debt to them!

[sandrark]

One of the most important, and not yet mentioned:

- Marry someone who shares your goals and values.

Divorce is EXPENSIVE. My BIL is about to embark upon his third marriage. He's 50. He's renting out rooms in his house to make ends meet. He also inherited a very tidy sum 18 months ago - and it's almost all gone. Paid off a second mortgage and bought out the ex-wife from the communal house. So now he's back to broke, with a mortgage, one income, and no inheritance.

If he'd stayed married - he'd be doing REALLY well right now.

[veronak]

I second this

Make savings a priority and live on what is left.

I totally agree

[LuxLiving]

When we were in debt we went by the simple prescription - all money in was divided up to Past (debt), Present (current living expenses) and Future (retirement and emergency fund savings).

[nick__45]

1) Save 35% and hope I'll only need 10%
2) Spend appropriately but don't sweat over it.
3) It is perfectly alright to treat good co-workers to lunches as it takes money to make a smooth career.
4) Don't drive a new car to work if you can help it.
5) Buy into a good neighborhood.
6) Freedom means more than a few bucks so no public transportation.

[nick__45]

I agree with all the ideas given. I also say "If I can't pay cash for it, then I can't buy it." Live well beneath your means. Pay yourself first, keep up your savings, never have balances on your cards, pay everything on TIME, and never make yourself a slave to someone else by being in debt to them!

I had a taste of reality when I went to Costco on Black Friday and dropped 4 cheeses on my Debit Card because I don't have a AMEX card. Then I had to do a emergency deposit into that account as I never carry more than two thousands on my account to avoid overspending. That was fun and I probably would have spent more if I could have gotten into Best Buy and use my credit card. So I do agree with you that I could afford to pay cash for those things so I bought them and they are not for me either. I've been doing very well financially so my family deserve to actually get stuffs, most in the form of high end electronics.

[NewBeginnings]

Im happy that there is so much advice that i can take in