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PERSONAL FINANCIAL RULES & GOOD-TO-KNOWS

  • The Safety Net Rule (3X Emergency Fund)
    For unplanned moments
    • Save 3-6 months of expenses
    • Place it where you can easily use it
  • The Double your Money Rule (Rule of 72) 
    A simple calculation
    • Take 72 divide it by your interest rate
    • That is how many years until your money (Income or expense) doubles
    • Example: At 1% interest your money doubles in 72 years; At 6% your money doubles in 12 years
  • The Triple your money Rule (Rule of 114) 
    Similar to the double your money rule
    • Take 114 divide it by your interest rate
    • That is when your money (income or expense) triples
    • Example: At 1% interest your money triples in 114 years; At 6% your money triples in 19 years
  • The Price Double Rule (Rule of 70) 
    Seeing inflation
    • 70 divided by inflation rate = years until pries double
    • At 3% inflation, prices double in 23 years
    • That's why saving in low-interest accounts hurts
  • The 50/30/20 Rule
    Seeing inflation
    • Put 50% toward must-haves (rent, food, bills)
    • Use 30% for fun stuff (movies, eating out)
    • Save 20% for your future (that's your wealth-builder)
  • Guidelines for keeping a good credit score
    • Pay your loans on time, every time
    • Don't get close to your credit limit
    • A long credit history will help your score
    • Only apply for credit that you need
    • Fact-check your credit reports
  • Spending & Budgeting
    • Live Below Your Means - Spend less than you earn to build financial security
    • Follow the 50/30/20 Rule - Allocate 50% of income to needs, 30% to wants, and 20% to savings/investments. 
    • Avoid Lifestyle Inflation - Just because you earn more doesn't mean you should spend more. 
  • Saving & Investing
    • Save Before You Spend - Pay yourself first by automatically saving a portion of your income
    • Build an Emergency Fund - Aim for 3-6 months' worth of living expenses in a high-yield savings account.
    • Invest Early & Consistently - The power of compoinding works best when you start investing early 
  • Debt Management
    • Avoid High-Interest Debt - Credit card debt and payday loans can cripple financial progress.
    • Pay more than the minimum on Debt - Tackle high-interest debt first using the avalanche or snowball method
    • Use Debt Strategically - Not all debt is bad; leverage low-interest debt for assets that appreciate in value.
  • Income & Wealth Building
    • Diversify Income Streams - Relying on one source of income is risky; explore side hustles, passive income, or investments
    • Negotiate Your Salary - Always negotiate job offers and raises; underpaid work can cost you thousands over time.
    • Keep Learning & Upskilling - Financial knowledge and career growth lead to better opportunities and earnings. 
  • Smart Money Habits
    • Track Your Spending - Awareness helps control unnecessary expenses and optimize savings. 
    • Don't Chase Trends - Stick to your financial plan instead of following fads or market speculation.
    • Set Clear Financial Goals - Whether short- or long-term, having goals keeps you financially disciplined. 
  • Protection & Risk Management
    • Get Proper Insurance - Life, health, disability, and property insurance protect against financial disasters. 
    • Have a Will & Estate Plan (Trust) - Plan for your loved ones to avoid legal complications, probate court, and high taxes.
    • Protect your Credit Score - A good credit score helps secuire better loan terms and lower interest rates. 
  • Mindset & Long-Term Planning
    • Avoid Emotional Spending - Make money decisions based on logic, not emotions.
    • Think Long-Term - Wealth is built over time; avoid get-rich-quick schemes and focus on sustainable growth