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Ten Commandments of Personal Finance

For most of the people, getting their personal finances on right track is more challenging than walking on desert for 10 years. But managing your finances is not impossible and it doesn’t demand any miracle from you side. Most of the people are afraid to take some essential steps to manage their finances this is because they don’t sure whether they will succeed or not.  If you are looking for some important suggestions then here is a list of top 10 commandments of personal finance to guide you.

Stop Spending more than You Earn

An individual can’t progress if he is consistently spending more money than what he is earning each month. Living below one’s means is the key step towards achieving financial freedom. So an individual must focus on trimming his budget and try to bring the expenses below his monthly income.

Differentiate Between Your Needs and Wants

Being able to differentiate between your needs and wants is directly related to your ability to manage personal responsibility. At the very basis level, an individual has a primary needs such as food, clothing, healthcare, shelter and transportation. Anything except these is considered as a want. An individual must earn sufficient amount to meet his needs and should not spend excessive amount to meet his wants.

Don’t Show off

Don’t try to demonstrate something you are not. Spending money on unnecessary things in order to impress someone will only hurt you in long term. The majority of millionaires became rich by saving their money instead of trying to make people believe that they are wealthy. An individual who spends his money in order to enhance his status or impress other people has higher chances of incurring a bankruptcy.

Don’t Involve in Gambling

Try to grow your money in fair manner. The schemes like Get-rich-quick and gambling are a mode of earning money at the expense of losing of it from other individual. It may turn into an addiction which can take your hard earned money away from you in a less time. Most of the individuals even after facing bankruptcy, keep themselves attached with these schemes as they don’t want to give up their chance of striking it big.

Don’t Leave your Family Financially Unprotected

If you have dependent family members then nothing can damage their financial security than losing you because of disability or death. If you lose your ability to earn income during tough time then it can only create a heart wrenching situation for you which is difficult to bear. Enrolling for any form of insurance such as disability and life at a right time will help you to create provision so as to face emergency situations.

Remember to Pay Yourself First

The only method through which millionaire individuals became rich is that they kept their expenses so low that they could invest large amount in themselves. So invest a decent amount in yourself before paying for your expenses. This can be achieved through retirement savings, emergency fund or anything else. Consider it as first task of the month and you will be stunned to know that how you made it by lowering the amount on your discretionary spending.

Don’t Borrow On Depreciating Items

Avoid borrowing excessive money on any depreciating items such as boats, cars and ATVs. When you borrow excessive amount of money on any items which fall in value, you will be suffering from a double hit. Most of the people see their financials going upside down because they have to pay interest on items which have been depreciating their value significantly.

Set Realistic Financial Goals

In order to bring your financials on right track, you need to determine your financial goals. Nobody can figure out your financial goals except you. You have to give some decent amount of time to determine what your short term and long term financial goals are so that you can take some necessary steps to achieve them. If you haven’t worked on determining your financial objective for current year, next year and after 5 years then you should take some immediate steps to create them.

Avoid Using Excessive Credit

Debt is kind of slavery as it obligates you to financial lender for long duration and this obligation can take your financial freedom away from you. Therefore, if you are looking something like financial independency then you should avoid using excessive credit. Though using credit cards is unavoidable, you can definitely take some vital steps to take control on its use.

Involve yourself in Philanthropy

Once you get complete hold on your financials, you should show some generosity towards needy people. Philanthropy is a great source of happiness and the ecstasy it will bring will always keep you on proper path financially. For most of the people, being able to serve their own family and individuals who are in need is one of the vital reasons why they aspire for financial freedom.


If you are wishing for your finances to come on track then simply wishing is not enough. If you want to succeed financially, then you have to stop doing things which can harm your finances and focus on things which are efficient. Bringing your finances on right track could be toughest thing. Above mentioned commandments of personal finance will definitely help you to make personal financial planning as one of your key objective in life.

2 responses to “Ten Commandments of Personal Finance”

  1. […] 10 commandments of personal finance (Hello Suckers) […]

  2. I think spending less than you earn and paying yourself first are the keys to building long term wealth. Each month I make sure to lay out a budget where I specifically include a line item for investing. This money is then funneled into my brokerage account so I can make sure I invest it instead of spending it on something frivolous.

    • Martin says:

      Dan, I agree. I practiced “pay yourself first” rule since the very beginning of my saving and investing career. I do not even have to budget for it as I have automatic transfer set up and it goes to my brokerage account right away, these days I use those money to pay my debt first, so not now, but usually I have it automatically transferred. Thanks for stopping by.

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