Learning how to manage your money is a skill that must be learned and mastered or else. You could go to the library or a book store and seek out a guide to your money and finances that would have chapter upon chapter about the rules of finances and you’d certainly have a leg up on learning about it. But what about those unwritten money rules?
Unfortunately, for a good majority of us, the skill of learning those rules comes from the school of hard knocks. Money management and personal finance principles aren’t the big “important” subjects that are taught in schools, although that does seems to be improving slightly. Even so, the rules about money are not always written down on a neat short list for you to learn, but there are actually unwritten money rules you need to know.
Why Are Money Rules So Important?
We have lots of rules for just about everything we do in life, many of which are written down in lists. We have rules at school, at work, and we have the ones that our parents make us adhere to like what time we go to bed or the chores we have around the house when we are kids. So it makes sense that there would be money rules too to help us through life.
We love rules because they help provide structure and guidance for us. But they say that rules are made to be broken and we do that quite often, even more so when they’re the “unwritten” kind.
What Are Those Money Rules?
You probably have a few money rules in your head, don’t you? But it’s not an actual written list. It’s more or less just a few ideas that you think you should try to live by so that it makes things easier.
Here’s one that isn’t written down, but I am certain that you would say it’s a real money rule to live by and that is: At the end of each month, you should have some money left over after you pay all of your bills!
How did you do with that one? It may seem obvious, but with so many easy ways to access credit and debt these days that we must actually say this one out loud to ourselves to learn it. Just try to spend less than you make.
This one simple money rule will help you stay afloat during crisis, save more money, and possibly become that millionaire next door.
We all must know the basics of money principles (like this one) to become wise with our money. The best part is that you only need to know a minimum of money rules to be successful. You don’t need a financial advisor, or have a degree in accounting or finance. But you must be willing to try to learn at least a few rules to be more successful with money.
Unwritten Money Ideas That Circulate Around You
Here are some of the most basic money rules (that are not written down) that you know about.
- Know where your money comes from and where your money goes each month
- Be prepared with money for life’s emergencies
- Don’t waste time and energy stressing over money
- Make decisions that build wealth
- Think how money moves affect your credit rating
While these are pretty basic rules to follow, many of us just ignore them and that leads to big problems. Piling up debt, even slowly, makes your life worrisome or even miserable. That’s why this rule is so very important and you won’t find it written down on any list of rules in a manual about your finances!
Unwritten Money Rule #1 – “Always try to live below your means”
That’s a great rule to have because it helps keep you from overspending, which can lead to a lot of problems in the future. It’s a surefire way to avoid debt, which is a huge burden on your finances.
Unwritten Money Rule #2 – “Learn from your money mistakes”
You won’t find this one in any money book that I have ever read, but it’s really important.
I’ll admit it. I am far from perfect. I have made some incredibly silly and even stupid money errors in my life; it is bound to happen to most of us. But the key here is to avoid doing those same things over and over and to learn from your errors. Call it the school of hard knocks.
This kind of money lesson can and does change the trajectory of where you are headed. It may even be the biggest unwritten key you can learn, specifically from living paycheck to paycheck to the path to financial freedom. Those who have made it there will tell you they learned from their money mistakes pretty quickly.
Once you become honest with yourself and the stupid money mistakes you made, it is easier to move forward.
Unwritten Money Rule #3 – “Pay your bills on time!”
This is one lesson I learned from my parents. Late payments are just not acceptable, period, end of story.
If you are unable to pay your bills on time, then you need to have fewer obligations (or more income) to make sure your bills are paid.
Unwritten Money Rule #4 – “Make plans for your money because your money doesn’t manage itself”
You need to take active control of your money and manage it.
The great part of becoming an active participant in managing money is that you learn what you like to spend your money on and what you don’t like spending your money on pretty quickly.
Most people hate the word “budget”, but it doesn’t have to be called that to make it real and get it to work. Call it a “Cents Plan” (yes, that’s a terrible pun), but no matter the name, a simple plan will provide a way to manage your money better.
Unwritten Money Rule #5 – “Avoid debt interest payments”
Would you rather be the person paying those interest payments or be the one collecting those interest payments? It may not always be possible to avoid paying interest, having a mortgage* proves that point clearly. But on other things we spend on, it just might be. The ability to access debt is easy and so very tempting with zero down and zero-interest payments. Make it your money rule to just say no to debt.
If the debt is a must, then you need to make the decision. Is going into debt worth it or can you pay cash for it as the best alternative to interest bearing debt?
*Just a quick side note here to paying a mortgage and interest: In many cases, mortgage debt can be less than the cost of renting. So it makes financial sense to finance debt for an appreciating asset. Compare that to your car which depreciates in value and depreciates quickly.
One take-away from this post is simple: Learn as many money rules that apply to you as you can and use them. If you can get them from a book, your parents, trusted friends, or the talking heads you see on MSNBC, it really doesn’t matter as long as they work for you.
Having money rules will keep you motivated and give you a clear path to financial security. Buy a book and read the written rules about money too. It’s always good to add common sense to the rules of any game.
What are the rules about money you live by? Are they working for you or do you need to learn the unwritten money rules?