19 Personal Finance Rules You Must Live By to Kick Butt With Your Money

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Personal finance is personal, but there are rules you need to follow to get ahead. Here are 19 rules to follow that will help you get ahead and become rich.

Personal finances are personal for a reason. I may have a different situation than you do, and vice-versa. However, if you’re looking to get your finances back on track or want to truly get ahead, it can be difficult to know to whom you should listen. While you will find a range of opinions on how you should manage your money, I believe there are a number of rules that most people need to follow if they truly want to get ahead with their personal finances.

Too often, we make our financial picture more difficult than we need to. We think we need to be experts to do something, or that something is too difficult to for us. Don’t allow that excuse to hold you back. Instead, use it as a means to challenge yourself to improve your financial life.

If you want to kick butt with your money, here’s my list of 19 personal finance rules you need to follow to make that possible.

1. Spend Less Than You Earn


This is the first, and most important rule to follow in personal finance. If you want to truly get ahead, and make progress with your finances, you must spend less than you earn.

It’s simple math really. If you make $5,000 per month but spend $6,000, it’s a recipe for disaster. You may be able to live paycheck-to-paycheck for some time, but it will likely only lead to debt.

Ultimately, it’s not possible to hit your financial goals without spending less than you earn as you’ll either always be playing catch up or terminally behind.

2. Invest at Least 15 percent of Your Income for Retirement


Most experts recommend saving at least 15 percent of your income for retirement. The retirement landscape has changed in recent history, but that really doesn’t matter. If you don’t want to retire, then view it as saving for financial independence. Whatever you call it, you need to start investing to make it a possibility.

Saving 15 percent of your income may seem like a big pill to swallow. I get it but don’t let it hold you back if you have to start with a smaller amount and reach this level down the road.

Have a 401(k) you’re contributing to on a regular basis? Great! That match your employer gives you counts towards the 15 percent you need to save. If you don’t know how to invest, here’s a great guide to start investing in the stock market.

3. Build an Emergency Fund Before You Pay off Debt


I know it sounds counterintuitive, but the first thing you should do when paying off debt is build an emergency fund. Here’s why – you want something to fall back on in the event that an emergency happens. If you don’t, it’s likely you’ll only continue the cycle of debt and hold yourself back longer.

You’ve probably heard you need to have 3-6 months of expenses saved. You can do that later, but that can be overwhelming when you first start. Instead, start by saving $100, then $500 and then $1,000.

Use a high yield savings account that doesn’t require a minimum balance, like Barclays so you can earn a little something on the cash and continue to grow it as you add more money over time. Once you’re debt free, what you have built will be a great jumping off point to grow it even more.

4. Simply Your Finances


I don’t know about you, but life is busy. The more credit cards, bank accounts or investment accounts you add to your life, the more time it takes to manage each of those things.

Take a look at your financial house. Do you have any old 401(k) plans with former employers? Roll them into your current plan. Do you have credit cards you don’t use? Cancel them and move the limit to another card to protect your credit score.

The goal is to streamline and automate your finances, so they’re simpler to manage.

5. Track Your Spending


Budgets are an important part of managing your finances, but I know not everyone budgets, and they’re still able to stay on top of their finances.

The trick is to track your spending. Money is a tool, but like any tool, you need to know how to use it and how it works. This is what tracking your spending is like. It shows you where your money is going and how much you spend.

I like to think of it as shining a light on something that’s hidden. If you want to find something, you turn on a light; you don’t hunt for it in the dark.

There are many tools available to help you track your spending; I prefer the free tool at Personal Capital as it makes money management simple.

6. Buy Term Life Insurance to Cover Your Family


When was the last time you thought about death? Yeah, it’s not a fun topic to think about at all. We think we’re invincible, but sadly that’s just not the case.

Watching my Dad pass away suddenly a few years ago taught me again the importance of life insurance as it helped me manage his final costs much simpler.

There are various types of life insurance you can buy. I like to keep things as simple as possible, and as inexpensive as possible, which is why I recommend term life insurance. It’s the cheapest kind of coverage you can get, and you can usually get much more coverage than other options.

*Related: Do you need to buy life insurance? Check out our review of the best companies to get cheap life insurance without a medical exam for coverage options.*

I know you may be young, but the earlier you get it, the cheaper it is. It’s also the loving thing to do for your family. You can use a company like PolicyGenius to compare term life insurance rates and find the best, cheapest policy.

If you want a life insurance policy that adjusts with your needs in life, Everyday Life is an excellent option for coverage.

7. Ignore the Experts


We’re surrounded by a bevy of experts – from those who like to say they know exactly what’s going to happen in the stock market to those who know what will happen to our economy. If you want to get ahead with your finances, here’s one simple rule to follow, ignore them all.

Many times they have a conflict of interest or are simply trying to attract more eyeballs to their show or publication. The best thing you can do for your finances is to manage your money and make decisions that are in your best interest, not because a talking head told you to do it.

8. Take Advantage of Your 401(k) Match


I take free money whenever I can get it because the opportunities are few and far between. The best opportunity for free money is right under your nose – it’s the 401(k) match offered by your employer.

Remember the need to save 15 percent of your income that I mentioned earlier? I’ll repeat one big way to accomplish that, is by taking advantage of every cent your employer wants to give you in a match.

If you don’t, you’re telling your employer you don’t want their money and are perfectly happy being paid less.

9. Discuss Finances With Your Partner


Money is a taboo subject in our society when it really shouldn’t be. That aside, money should not be a taboo subject between you and your partner. I saw this with my parents as a child.

They rarely discussed money and, not too unsurprisingly, they struggled with their finances on a regular basis.

It doesn’t matter if you combine finances, or keep them separate; being financially naked with your spouse brings you together and helps you accomplish goals as a team. That’s not something you can do if you’re keeping each other in the dark about money.

10. Make Your Bills Lean


Remember my friend who admitted to spending $30,000 per year eating out? The larger issue was that his entire budget was fat. His family was overspending in many different ways, and keeping them from accomplishing their goals.

One of the best ways to get ahead financially is to go through all your bills and trim the fat. You may not find a lot of savings, but I believe in most cases you will – whether it be from things you don’t use to finding cheaper alternatives.

If you need some ideas of how to save money, here’s an extensive list of ways to save money each month that will save you hundreds every month.

11. Cut Your Fat


I’ve always struggled with my weight. It’s no surprise for many of those years I also had financial issues. In fact, studies show that body weight may be tied to financial health. The argument goes that the less self-control we have with our dietary intake, the less self-control we have with our finances.

I know this isn’t always the easiest issue to tackle, but if I lost 100 pounds it’s possible that you can too. The best part…it benefits both your current self and future self-thanks to lower medical bills.

12. Kill All High-Interest Debt


Like #1 in the beginning, this is another no-brainer. One of the most important personal finance rules to live by is killing high-interest debt. I know some may also throw other types of debt in, but it starts with attacking and killing high-interest debt for good.

In most cases, this begins and ends with credit card debt. Sit down with all of your credit cards and determine how much you owe to each. Then formulate a plan to attack the debt. It all begins with that plan as it’ll help guide you to becoming debt free.

You may want to consolidate them with a lender like Fiona to lower the interest. Fiona by Even Financial is a terrific option for this to lower payments.

Fiona lets you compare 17 lenders in under two minutes. After completing a brief application, they provide you with quotes for the best matching lenders.

You can also transfer to a 0% APR credit card to reduce the interest and pay off the debt quicker.

There are many other tools available to help you pay off debt, take advantage of them and reclaim your freedom.

13. Find One Way to Make Extra Money


Saving money is a great way to get in shape financially, but to really get ahead you need to make extra money. I get asked on a regular basis how to make extra money, and the beauty is there are many ways to make extra money – even if you don’t have specialized skills.

Extra money is important for one main reason; it helps you reach your goals faster whether it’s paying off debt, having more money to invest or any other goal. I wouldn’t stop at simply making extra money as passive income is truly where it’s at when it comes to getting ahead financially.

If you look at many self-made millionaires, many are that way thanks to passive income. It’s not as difficult as it might seem; you just have to start.

14. Watch the Big Expenses


Watching your spending is a key personal finance rule. We do a great job of watching our smaller expenses, which is good, but it’s the larger ones that kill us. For large expenses, it really comes down to two areas – houses and cars.

Most recommend that your mortgage payments should be no more than 28 percent of your net income and keeping car payments to four years or less.

If you want to be normal, it’s fine to follow these rules. Overextending yourself on either, on the other hand, will only derail your goals, both in the short and long-term.

15. Learn Something New Every Year


Educating yourself has a much larger role in finance than we realize. This doesn’t have to be simply book learning either. If you want to learn how to start investing, it makes sense to read an investing book for beginners familiarize yourself with investing.

There are many other things you can learn that have a direct impact on your finances. Take learning how to fix things around your house as an example. My father always said there are two kinds of people, those who fix things on their own or those who open their checkbook.

You get the point, repairing things can be expensive, but the moment you teach yourself how to fix your washing machine you keep that money and not pay it to a repair person. The possibilities are truly endless.

16. Focus on Experiences, not Stuff


Buying something new can be fun, but the memories fade and eventually that new thing will collect dust. This doesn’t mean you can’t buy something fun and not get ahead, obviously, but when was the last time you heard a person say at the end of their lives say, “Boy, I’m glad we bought that 80’ big screen TV!”

I’d argue you never hear it. You hear them recount fond memories that stuck with them for years. That’s the kind of life that has wealth, both financially and otherwise.

17. Set Small and Large Goals


Where do you want to get in life? Since you’re on this site, I imagine you want to do something to manage your finances more effectively. A key part in that is goal setting.

Setting goals sounds nice, but how do they really work and what can you do to make sure you’re successful?

Your goals need to be specific and actionable. Otherwise, it becomes difficult to track your progress. I’ve also found it can be challenging to work on a large goal as it can seem overwhelming, so what I do is set smaller goals that work towards hitting the larger goal.

Think of it like the ‘eating an elephant one bite at a time’ analogy. Breaking larger goals into smaller ones helps breed confidence to get where you really want.

18. Know the Time Cost of Your Spending


We’ve talked about the 48-hour rule here on the site as a means to avoid debt. I like to take it a step further and determine what my time is worth. In other words, as I’m out shopping, I need to know how much time it will take for me to earn the amount I’m considering spending.

Not only does it help you know if the item is truly worth it, but it makes spending money as a whole much simpler to manage and, in turn, helps me know what I need to do to hit savings goals.

19. Ignore How Other People Spend Their Money


The final personal finance rule to follow to kick butt with your finances is ignoring how other people spend their money. Think of it as not keeping up with the Joneses if you will, but really, it shouldn’t matter one bit how others spend their money. You’re not living their life so why would you spend like it?

This makes life much simpler. It means you can ignore advertising as you know it’s only meant to separate you from your money. It means you don’t need the largest house in the neighborhood because you’re perfectly satisfied with your home.

It means not buying the latest new car because you know it loses thousands of dollars the moment you drive it off the lot.

In short, surround yourself with those who hold to the same values you do; surrounding yourself with those on a constant race to get more will only lead you to spend money to make them, not you, happy.


What are some other personal finance rules you must follow? What’s one thing you ignore the experts in when it comes to money? Do you know how much your time is worth?

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John is the founder of Frugal Rules, a dad, husband and veteran of the financial services industry whose writing has been featured in Forbes, CNBC, Yahoo Finance and more.

Passionate about helping people learn from his mistakes, John shares financial tools and tips to help you enjoy the freedom that comes from living frugally. One of his favorite tools is Personal Capital , which he used to plan for retirement and keep track of his finances in less than 15 minutes each month.

Another one of John's passions is helping people save $80 per month by axing their expensive cable subscriptions and replacing them with more affordable ones, like Hulu with Live TV.


  • fehmeen says:

    I’ve never really sought expert advice other than when I wanted to know how to make sound investments in the stock market. I have yet to hear an investor who praises his/her broker for leading them towards a profitable investment. In this area, I think it’s absolutely critical that consumers thoroughly research their investment decisions instead of blindly relying on experts.

    • John Schmoll says:

      Completely agreed. It’s far too easy to find “experts” to recommend you do one thing or another and, unfortunately, it’s often led by less than noble intentions.

  • DC @ Young Adult Money says:

    Lots of great tips John! I like the “find one way to make extra money.” Even a little bit can make a big difference, even if it’s just psychological.

    • John Schmoll says:

      Thanks sir! Completely agreed, as long as it’s something that can really motivate/encourage people to do more and work harder towards reaching their goals.

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