8 Foundational Rules of Personal Finance

Personal finance is not a state – it’s a journey that everyone must take. Unfortunately, many people fail this journey because they are distracted. If you’re one of these people, don’t fret – it’s not yet too late. You just need to be aware of the foundational rules of personal finance and set your mind towards reaching them. We’re going to touch on them for you, and give you an idea of how payday loans, similar to the high acceptance loans available at https://www.freshloan.co.uk/payday-loans-high-acceptance/ and most other lenders, to saving money on a regular basis to help you have a clear sight of the future, can help you improve your personal finance.

So, go ahead and check out the key personal finance rules that you must follow:

Track Your Expenses and Cash Flow

As a responsible person, you must learn how to keep track of your expenses and cash flow. This advice has been around for many years because, potentially, it is hard to keep. Every single day, a person has to juggle tons of data and information. Distractions are always present, and you might have a hard time keeping up.

Will there be an easy way of tracking your finances? Well, thanks to the wonders of technology, you can now rely on dozens of smart finance tracking apps. These apps can be synchronized with your laptop, PC, and smart phone. If you are a techie person, you will benefit from these apps. Most of them are freeware, and a selected few will require payment.

But what if you don’t want a digital approach? Then it’s time to go ‘old school!’ Pick a notepad or a notebook. Afterwards, you must list down all expense and cash flow items. Do this every day and you’ll see massive improvement.

It will be slow at first, but definitely worth the shot!

Build Assets, Not Liabilities

Another advice that you’ve probably heard is build assets, not liabilities. Again, this advice resonates year by year because people forget about it.

One factor that you should remember: you won’t become rich without assets! Unless you’re born with a silver spoon in your mouth, but that’s a different case.

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But what exactly is ‘building an asset?’ It’s very simple. You just need to invest your money in something that will bring in money – residually. Consider an apartment unit that you can purchase at a bargain. If you let it sit around, it’ll be a sitting duck against expenses and inflation. However, if you rent it out to people in need, it will generate cash flow. Hence, you have an asset. Congratulations!

A liability, on the other hand, is something that takes away cash. At some point in your life, you will acquire a liability. This can be a recurring subscription, unrented property, vehicles, and other items that don’t have clear financial sense. You can’t remove liabilities by clean 100%, but you can mitigate them to nearly 90%.

Focus on building assets today, and your future self will be thankful.

Keep Your Credit Clean

Many people are wary of credit like it’s some sort of a bad rumor. And they should be – credit can work against anyone! Despite this notion, you shouldn’t be afraid of credit. In fact, you need to think about it starting now.

A person with a good credit rating can reach high places. You can apply for car title loans, a business loan, or a remarkable personal loan offered by a legal moneylender. If your credit rating is great, then it’s one of the signs that you are financially responsible. There are companies that can help with credit builder loans, getting you to a good credit score to show lenders that you are reliable in paying back your loans, this can help start you on the property ladder or finding finance for the future.

What if you have poor credit? Or worse – you have zero credit! All hope is not lost. You should start building your credit slowly by working with banks and financial firms. If you can find a legitimate credit builder loan provider, it’d be a nice start. Just remember to pay back the loan! Unfortunately, a lot of people aren’t able to pay back their loan and get into even deeper trouble. This is where places like National Payday Relief come in to help those who can’t make the necessary payments. If you’re currently struggling to keep on top of the payments then it’s definitely worth looking into.

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Keep your credit as clean as possible. It’ll keep you out of financial sinkholes.

Avoid Luxury Traps

Death and taxes – these are unavoidable things in life. But another thing remains constant in any spender’s life nowadays: a luxury trap.

Luxury traps are premium items that you don’t actually need. Perhaps you purchased them because you saw them on TV or Youtube. They are the worst kinds of liabilities that you can think of because they are expensive from the get-go. A designer bag can set you back by thousands, and you might not use it often.

What if I sell them? This is a lingering question in the mind of an over-spender. True – you can sell the luxury items that you’ve bought but it’d be below the original value. Unless you want to sell a luxury trap item on the same day that you bought it!

A reminder: Expensive coffees (and similar items) are tolerable items. You can buy them every now and then because they are counted as rewards for your hard work. Just don’t buy them often.

Create Monthly Financial Milestones

Milestones make a man, and in a better case – milestones make a financially capable man. You probably realized by now that a journey towards better personal finance can be challenging. Without a proper tracking mechanism, you won’t reach anything worthwhile.

Through monthly milestones, you can review your financial actions and strategies. If you failed to reach a milestone, then perhaps you need to adjust accordingly. Keep in mind that milestones should connect to a better and higher personal goal.

Pro advice: find a decent journal to personalize your monthly milestones. This will make the journey more interesting than ever.

Get an Accountability Partner

Sometimes, being watched closely has its own benefits. Too much freedom can mess up your financial wiring and before you know it, you’ve already trampled on your goals. The answer? Find an accountability partner.

If you are married, your accountability partner should be your spouse. Accountability partners will make you accountable on all of your financial actions. They can even remind you of that payday loan that you currently owe. Additionally, they reinforce the checklists, milestones, and even weekly micro-goals. Heck – they can even do it daily! A good accountability partner will build you up over the course of time.

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Save a Minimum of 10% per Month

Save 10% of your income per month – this is probably one of the oldest pieces of advice that you’d encounter. Well, it’s timeless and effective!

If you save a minimum of 10% monthly, your contingency fund will grow through the years. Once it has reached a specific threshold, you should consider investing it into a venture. Be wise enough to keep your savings rate grow. Otherwise, inflation will chip away at your savings account.

Have a Clear Sight of the Future

Last but not the least – you need to have a clear sight of the future. If the future seems unclear, then you need to sit back and create a draft of your main vision.

Start by asking the right questions. Your busy schedule shouldn’t be an excuse anymore. Find at least 30 minutes during the weekends. Answer the internal questions in the best way that you can. Sooner or later, you can forge your personal vision and connect it to your personal finance journey.


Knowing the modern foundational rules of personal finance is the start of the challenge. You have to grind against your old habits to guarantee that you’re at par with the rules.

But the journey shouldn’t be strictly difficult and boring! Keep the journey fun yet progressive, and you’d become financially responsible in a few months’ time.

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