Personal Finance Rules – 8 Tips To Master

Personal finance rules are a must for you if you want to master money.

Personal Finance Rule No 1. Pay Yourself First

Listen you have to follow this point no matter whether you know it or not but I am sure that 99% of you don’t follow this that’s why the reason is that you fail in money management if you seriously want to make money or master the personal finance you need to understand this personal finance rule.

No matter how much you earn whether you earn lakhs or thousands but you need to pay yourself first irrespective of the situation. Do you know what I am trying to say paying yourself doesn’t mean that you keep aside money for yourself and spend it while doing a party no.

You need to save that money for your future. You can invest money or you can save money or whatever but you will do the proper use of that money okay which will help you in the future. If you follow my advice then let’s say you take 10% of your income and put that aside in investing or anything which will help you to grow your money.

Personal Finance Rule No 2.Rule of 72

If you want to know how much time your investment will take to double your money. Rule of 72 says you will divide 72 by the annual interest you will get on that investment. For example, if you get an annual interest of 6% so 72 / 6% is equal to around 12 years. Here you will take 12 years to double your money I hope you got it.

Personal Finance Rule No 3. Emergency Fund Rule

Well, emergency fund most of you know but still, you don’t have an emergency fund right now I am sure. Well, I hope that after reading this article you will make sure that you will make your own emergency fund or whatever the rules which will be applicable to you.

You will try to implement those in your life from today itself ok. Ideally, an emergency fund is 6 times or 12 times your monthly expenses it’s up to you but I highly suggest an emergency fund of 12 months ok.

Now how to make right so let’s see your monthly expenses is around 30000 Rs so you will multiply 30000 by 12 which will give you the amount of 360000 Rs.

So this is the number you need to have for your safety as the name suggested emergency. No one knows what will happen tomorrow so I highly suggest making your emergency fund to maintain your healthy lifestyle.

Personal Finance Rule No 4. Life Insurance Rule

Many people have lots of questions regarding insurance first question should you buy the insurance one-word answer is yes and the second is for how many years we should take our life insurance?

In simple answer multiply it by 25 that’s 25 years okay that will be your cover and that’s perfect it is good for everyone in most cases so you can prefer. However, if your age is less you can get the premium at a lower cost so try to get your insurance as soon as possible it will save your money that’s why I am telling you.

Personal Finance Rule No 5. Asset Allocation Rule

This is a wonderful 10 5 3 rule but listen this are approx number ok. As the name suggests asset allocation rule 10 5 3 says you can expect around 10% in equity, 5% in debts, and 3% in saving accounts.

Personal Finance Rule No 6. 40% EMI Rule

EMI I know many of you don’t even think will it be right or wrong for them but as soon as they get the option of EMI they will jump into that no matter if they don’t have money in their wallet or in their bank account still they need that thing. But stop from today onwards It is said that you should not exceed 40% of your income in EMIs for all your loans. Otherwise, be ready to be broke it’s your choice I know you are a good audience you won’t do that.

Personal Finance Rule No 7. 50 30 20 Rule

In this, you need to divide your income into three parts 50 30 20. 50 30 20 rules say that you will diversify your 50% income in needs,30% income in wants, and 20% income in saving and investments simple right so follow them without fail.

Personal Finance Rule No 8. Stock Allocation Rule

Are you looking to invest in the stock market but don’t know how much to invest in equity I have something for you personal finance rule 100 – your age. If your age is 25 so 100 – 25 equal 75 so you can allocate 75% in equity and 25% in debt or where you want it’s up to you.

Well now you know some personal finance rules now it’s time to know some money ethics which are the things that stop people from becoming rich.