Becoming rich and wealthy comes with a cost. The cost is discipline, consistency and work hard. But when it comes to getting rich, one must follow some rules to manage the finances. Money management is a wider and regulated concept, one need to follow these top 4 money rules to be rich:
Pay Yourself First
Pay yourself first out of the money you earn. If you pay yourself first, then saving money will no longer be the last item. Most of the financial experts recommend spending 75% of your income and saving the rest. If you are not able to do this, in starting invest small amounts and label them as your own funds.
Live Below Your Means
Millionaires are not millionaires because of their current wealth status, they are millionaires because in start they act broke. They have been lived below their means, they saved for hard days and they had a budget.
Making a financial budget is the main rule of money. If you have budget you are able to regulate your income and expenditures. If there is no budget, then you will spend lavishly. And spending like this will never make you rich.
Save For Rocky Days
Emergency happens, crisis occur, jobs get lost! So what are your plans for that day? It is better to live below your means and save for hard and rocky days. Be prepared for the financial disaster.
Start with saving small. Put few pennies a day into high yielding savings account or moderate risky investments.
Never Go Into Debt For Depreciating Assets
Do you want to be rich or make the bankers and credit card lenders rich? Never get into debts for depreciating assets. Classify your money needs into good and bad debts. Good debts are the debts that will increase your net worth. Buying home and education loans are good debts.
But getting into debts for buying depreciating assets like luxurious cars is not a good financial decision. Because in these kinds of assets, the value of your asset doesn’t go up and you have to repay the principal debt amount, plus interest on the loan and then the depreciating cost as well. So it is not a good decision to go for debts for such assets, “because the aim is to be rich, not look rich.”
So follow these top 4 money rules to be rich and manage money like a pro!