Money Rules of Thumb

[jeffrey]

Just curious -- what are some of your money rules of thumb that you like or use on a regular basis?

[krantcents]

Make savings a priority and live on what is left.

[maat55]

Never carry a balance on credit cards.
Never consider a credit card an emergency fund.
Never borrow for consumption or for things that go down in value.

[SmartMoneyGuy]

5% of the paycheck go straight into the savings account...

[creditcardfree]

Save 15% of gross income for retirement.

[disneysteve]

Save 20% of gross income - 15% to retirement; 5% to other needs. Live on what's left.

Pay cash for cars or at the very least, take a loan for no more than 3 years with a payment of no more than 10% of your monthly take home pay.

Pay no more than 3 times your annual income for your home. Your monthly payment (PITI) should not exceed 28% of your monthly income.

Never buy anything but term life insurance. Own your own policy. Getting one through work is okay but you lose it if you change jobs so always carry your own policy.

Never use a credit card to make a purchase unless you already have the money in your account to cover that purchase. Never carry a balance - always pay the bill in full each and every month.

[bjl584]

Save at least 20% of my income for retirement.

Keep cash on hand for major purchases like automobiles.

Never carry a credit card balance.

[MonkeyMama]

**Don't borrow for anything (but mortgage).

**10% gross income to retirement, at minimum. ALWAYS. (There is no maximum).

**If married/both working - only live on one income.

**Avoid contracts, loans and commitments - particularly for luxuries.

[Frugal]

1. Buy what you need BEFORE what you merely wish to have.
2. Save at least 20% of what you make.
3. Use coupons and savings strategies to save money.

[GREENBACK]

Saving is just like earning but easier.

[snafu]

My favorites have been mentioned, I often ask how many hours do I need to work to pay for a desired item...is it worth it? Is it a *need* or a *want*? Have I done research to verify value for money?

[nick__45]

1) Save at least 10% of take home and aim for 25%

2) Don't lend money to relatives. Give it to them if you can but don't expect it back.

3) Help friends financially if it means to make them richer via a business start-up/expansion or be in better positions such as getting a nice house at a good value. These people will always pay back.

4) Never bail out a friend financially because they can't pay their bills. These people usually don't like paying back.

5) Never let a friend move in unless you're renting them a space. If they are in a desperate situation, you can always get them nice motel somewhere cheap and they should be able to figure their next move in a week or so. This is why choosing friends is important and I don't have any friend that would be in this mess unless something very severe happened and they usually can get themselves out of a mess before needing my help.

6) Always keep a car as long as possible if buy new.

7) Never buy a boat unless docking is cheap or free and there are more than 5 people in the household that enjoy boats.

[rob62521]

Live below my means.

Appreciate what I have.

[scotland]

Dont tell the taxman everything.
Be inventive.
Be smarter than the opposition.

[photo]

I pretend I'm poor and have no money. It's a great feeling knowing I could buy almost anything I want -- but don't.

I'm human and do have my minor splurges. However, I've been 100% debt-free (mortgage all paid off) for about 12 years and actually enjoy the challenge of figuring out how to get the best prices and making my money stretch a little farther.

[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]

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.