4 Basic Money Rules You Might Be Ignoring

Photo (cc) by 401(K) 2012

Want to drop a bad habit or develop a good one? You need a plan. Or, rather, you need a list.

We Americans love our lists. We especially love short lists. Just check the headlines on magazines, features sites, or blogs. You’ll almost certainly see ones like “Three easy steps to lose weight/stop smoking/become a millionaire.”

Having a list makes us feel we’re already halfway to achieving our goals. Lists make us feel confident and in charge: I’ve got it all figured out! Now I just have to implement it!

It’s never really that simple, of course. If three steps were all it took, we’d be surrounded by thin, rich people whose fingers were unstained.

However, making a list does serve a purpose: It reminds us that we can make changes in our lives.

Shorter is better

They don’t even have to be big changes. Several years ago I challenged readers to carry their lunches to work at least twice a week for a month. Some of these “Brown Bag Challenge” participants found themselves with an extra $100 or more per month to throw at consumer debt or mortgages.

What could you do with an extra $100 a month?

Here is my list of rules for money management. Shorter is better – except when it comes to things like massages and vacations – so I kept it to four.

Rule No. 1: Spend as though every dollar matters. That’s because every dollar does matter. A few bucks for coffee, a dollar in the pop machine, a magazine and a corn dog when you go in to pay for your gas – it adds up surprisingly fast.

Please note: This does not mean that you should never spend money. It means that you should be mindful of how you spend it. An easy way to do this is to compare spending impulses with your long-term goals.

That $100 or more a month you save by brown-bagging twice a week could be used to help pay down student loans or consumer debt. It becomes $1,200 a year plus interest (such as it is) added to investments, or to an eventual down payment on a home of your own. How many corn dogs do you really need?

Just a little bit of planning

Rule No. 2: Live like there is a tomorrow. A surprisingly common reader refrain in the PF blogosphere goes something like this: “Spend your money now! Who knows what tomorrow will bring?”

Well, what tomorrow usually brings is … another tomorrow, with the usual obligations and opportunities. You need to be ready.

Again, this does not mean you can never have any fun. It simply means a bit of basic planning, such as:

Such things will come in mighty handy if you do survive past age 30. (It happens.)

Try a little tenderness

Rule No. 3: Don’t forget to give. Tied up in knots over all the things you want but can’t afford right now? Give away some of your money.

Seriously. It will get you out of your own head and provide some much-needed perspective about what’s going right for you. Grumbling because you can’t afford technology upgrades? Drop off a $20 bill at the food bank and ask employees about the clientele. Listen to their stories.

When you realize that earlier in the day you were whining about having to save up for an iPad, the embarrassment will make you want to fling yourself off a bridge. (Don’t do that, by the way.)

What if you truly can’t afford to part with even a dollar? Offer a couple of hours a month to a cause. Get some free-after-rebate toiletries and drop them off at a shelter. Donate a few rarely used possessions to an agency like Goodwill or the Salvation Army, or Freecycle them.

One study indicated that lower-income people give away more relative to their income than wealthy people do. Try it. Compassion will enrich your life.

Making things happen

Rule No. 4: Dream as though there were no limits – but plan as though there are. You want to get married. You want to start your own business. You want to travel the world.

Congratulations! Now: How are you going to pay for it?

Dreams are terrific, but they exist only while we’re sleeping or woolgathering. In real life, the things we want don’t simply happen to us. We make them happen. That means planning, creativity, and, yes, work.

Don’t dismiss your dreams out of hand. There really could be a way for you to become a baron of industry, or to backpack around the world. But just leaping in and hoping for the best isn’t the right way.

The late Col. Norman Vaughn famously said, “Dream big and dare to fail.” Here’s what I say: “Dream big and plan to succeed.”

That goes for a lot more than money management. It could also help you lose weight and quit smoking.

More stories from Donna Freedman:

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
25 Things You Should Never Buy — and What to Buy Instead
25 Things You Should Never Buy — and What to Buy Instead

If you really want to save money, become a more intentional shopper.

12 Things Everyone Should Stop Buying This Year
12 Things Everyone Should Stop Buying This Year

These convenient household products come with hidden costs that you might not have considered.

8 Surprising Things No One Tells You About Retirement
8 Surprising Things No One Tells You About Retirement

Knowing what to expect can help you prepare for — and adjust to — life in your golden years.

Marooned at Home? Earn Some Cash Playing on Your Computer
Marooned at Home? Earn Some Cash Playing on Your Computer

Earn cash by reading emails, taking surveys, playing games, shopping and signing up for offers through this website.

3 Cable TV Companies Hiking Prices for 2020
3 Cable TV Companies Hiking Prices for 2020

Still married to your cable company? Hold on to your wallet!

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

11 Senior Discounts for Anyone Age 55 or Older
11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

14 Things That Are ‘Free’ With Medicare
14 Things That Are ‘Free’ With Medicare

These services could save you money and help prevent costly health problems.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

5 Things That Make Life More Meaningful for Retirees
5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

15 Amazon Purchases That We Are Loving Right Now
15 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

10 Things You Should Never Do With Bleach
10 Things You Should Never Do With Bleach

Does the pandemic have you reaching for bleach more than ever before? Learn the ins and outs of using this powerful disinfectant.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.