Three Principles of Personal Finance

About: presents timeless personal finance advice; their three principles of personal finance. Write this down on your refrigerator:

  1. Spend less than you earn
  2. Make your money work for you
  3. Protect your money

Easy peasy!

This is advise that everyone should live by!

Spend less than you earn – I’d take that a step further: pay yourself first. Put as much into your investment accounts as you can every single pay period. Make it painless by using direct deposit.

Make you money work for you – Invest your money wisely. As you know, we are big fans of index investing for those who have no interest in closely monitoring their portfolios. Pick a small handful of broad, diverse index funds and rebalance periodically. As a reminder, we have a free asset allocation spreadsheet to make the rebalancing process easy. To get your copy, simple sign up for out newsletter.

Protect your money – yes, you should definitely have some cash available for emergencies. The typical rule-of-thumb here is to keep six months’ worth of expenses available in cash.

Again, put these three principles on your fridge (or anyplace that you’ll see all the time) as a daily reminder of how you ought to manage your personal finances.


One Response

  1. Mark Boyle August 19, 2014

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