When I ask people what the best financial advice they’ve received is, I often hear a mix of specific strategies and general guidelines.
Some specifics include advice like, “Maximize the company match in your 401(k).” Other bits of wisdom stick with us, like the best advice my dad gave me: “Know the difference between ‘needs’ and ‘wants.’”
Theo A. Boers offers similar words of advice in his book, Three Simple Rules: A Practical Manual Guaranteed to Improve Your Finances.
• Spend less than you earn: Achieving financial goals often hinges on creating margin. If your expenses are more than your income, getting ahead will be impossible.
• Save now, buy later: Whether it’s for emergencies, short-term needs, or long-term goals, saving for the future helps you avoid debt, which can be the biggest barrier to a fulfilling financial life.
• Know debt: While some finance gurus advocate for a debt-free lifestyle, that’s not realistic for everyone. It’s important to know which types of debt are harmful (like revolving credit card debt, and which can be more productive (such as a mortgage or student loans, which can help generate future income or build equity). Rather than shunning all debt, focus on understanding how debt works and its potential impact on your finances.
I like to add a fourth fundamental rule: Live and give generously. It’s important to financially support the causes, missions and ministries that we care about, but it’s also important to embrace life with an open-handed mindset. When we hold on too tightly to money and possessions, we risk missing out on the true joy of living. By being generous, we not only enrich the lives of others but also enhance our own experience of life.
Mastering these four financial fundamentals is a major part of successfully managing money. While the other details also matter, they’re minor compared to the power of these guiding principles. Embrace them, and you’ll set yourself on the path to a brighter financial future!
Some specifics include advice like, “Maximize the company match in your 401(k).” Other bits of wisdom stick with us, like the best advice my dad gave me: “Know the difference between ‘needs’ and ‘wants.’”
Theo A. Boers offers similar words of advice in his book, Three Simple Rules: A Practical Manual Guaranteed to Improve Your Finances.
• Spend less than you earn: Achieving financial goals often hinges on creating margin. If your expenses are more than your income, getting ahead will be impossible.
• Save now, buy later: Whether it’s for emergencies, short-term needs, or long-term goals, saving for the future helps you avoid debt, which can be the biggest barrier to a fulfilling financial life.
• Know debt: While some finance gurus advocate for a debt-free lifestyle, that’s not realistic for everyone. It’s important to know which types of debt are harmful (like revolving credit card debt, and which can be more productive (such as a mortgage or student loans, which can help generate future income or build equity). Rather than shunning all debt, focus on understanding how debt works and its potential impact on your finances.
I like to add a fourth fundamental rule: Live and give generously. It’s important to financially support the causes, missions and ministries that we care about, but it’s also important to embrace life with an open-handed mindset. When we hold on too tightly to money and possessions, we risk missing out on the true joy of living. By being generous, we not only enrich the lives of others but also enhance our own experience of life.
Mastering these four financial fundamentals is a major part of successfully managing money. While the other details also matter, they’re minor compared to the power of these guiding principles. Embrace them, and you’ll set yourself on the path to a brighter financial future!