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Everything in the world we live in tends to evolve with time. But do we need to change our financial planning to keep up with changing economies and technology? As far as money is concerned, there are some rules of thumb. These are the classic rules that we shouldn’t break. They aren’t written in stone but are vital in managing our finances. We don’t have to follow them religiously, yet we shouldn’t stray far away from them, especially if we’re looking to a bridging loan comparison site to help ourselves out of a tight spot. Here are those financial rules.

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Using Credit Cards for Emergencies

We can’t talk about money matters without mentioning credit cards. These cards are vital in tracking our expenditures, increasing our cash security, increasing shopping convenience, and helping us get credit. With that said, incurring lots of credit card debts is the worst financial mistake we can make.

We don’t have to swipe those plastic cards on everything we desire. A good subrule I use is, “if it isn’t a basic need, it doesn’t deserve my card.” I only use this card for shopping necessities and notably when faced with emergencies. I also avoid interest charges by paying my credit balances in full every month.

Anything in Fine Print Should Be Read

Financial contracts are things we encounter daily. Whether it’s a bill of sale, lease, credit card slips, or rental agreements, contracts manage most of our transactions. Once we affix our signatures on the dotted line, we agree to all the stipulated terms. It becomes legally binding, and when breached, we cannot claim to act on ignorance.

Given the legal implications of fine prints, it’s imperative to bring along our magnifying glasses when reading them. Never sign them before thoroughly scrutinising their content. I once made the mistake of rushing to sign a rental lease. Later on, I discovered some hidden fees mentioned. When I called to inquire, the lessor made it clear it’s their standard contract and can’t be changed. From experience, I re-read every contract before signing.

20% Home Down Payment

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Nearly all lenders require a down payment before preapproving home mortgages. Financial experts often advise us to put down at least 20% as a down payment. In reality, 20% isn’t law, and we can pay lower percentages. However, low mortgage down payments come with a costly demerit. We will be required to pay more interest at a higher rate.

The high interests add to our monthly payments, especially if we include other financial obligations. The better trade-off is saving for a down payment until it reaches the 20% mark. At that percentage, we will pay lower monthly payments, a smaller loan size, and won’t need mortgage insurance.

10% Saving on Income

Although outdated, the 10% saving for retirement still plays a significant role in our financial journeys. When I got my first vocation, I was eager to commence saving for retirement. Being young, I opted for a 401(k) and set aside 10% of my income. It was a simple, easy way for a teen to save for retirement. The standard is 10%, it can’t be lower, but can be higher.

As I approached 30 years and got a better job, I increased the savings amount. Statistics show that our life expectancy is on the rise while our retirement ages are fixed. After all, the 10% saving might not be enough to cover our lives after retirement. We can avoid post-retirement predicaments by increasing our savings rate and cutting expenses.

Social Security Number Kept Safe

Financial crimes have been on the rise, particularly in this digital age. Identity theft and carding are now the norms in the Internet’s darkest corners. Such thieves only require our social security numbers, credit card numbers, and names to execute their crimes. They might make credit purchases or worse, claim a loan under our names.

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Finances tend to be a personal matter. The above rules are in no way a fit-it-all solution to our problems. They serve as a guide for regulating our financial habits.

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This site contains affiliate links to products. We may receive a commission for purchases made through these links, this is at no cost to you and it is purely at your discretion.

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