Seven financial rules that can never be broken

When it comes to money management, there are a few rules to keep in mind. Below are 7 basic rules that must not be violated under any circumstances. Cheat sheet.

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1. You must have a retirement plan

Save money for retirement. Although you can say that you will work until you die - this is not the best plan. If you become disabled, chances are high that you can no longer work. Also, working ability decreases with age, so start collecting money for a happy retirement now.

2. Do not spend money like a billionaire

Live within your means. You've probably heard it a hundred times, but it’s worth repeating. This rule will save you from many troubles. This rule will work in difficult times when it comes to finances. Spending money and living beyond our means will most likely lead to debts.

One of the rules to live within your means is to carefully track your income and expenses. You should know exactly how much money goes into and out of the family budget. This way, you can definitely avoid overspending every month and not rely on credit cards to make up the difference.

3. Prepare for the worst

It is necessary to prepare for emergencies. This is one of the most important rules, but many Americans do not have stocks in case of an emergency. Recent study Bankrate found that most consumers do not have stocks in the event of an emergency, for example, $ 500 for car repairs or a medical bill of $ 1000.

4. Don't be a surety

Although it may seem heartless, a surety for someone else’s loan agreement can cause you a lot of trouble. Do you really want to be responsible for not paying your credit?
In addition to liability, a guarantee lowers your credit rating. You can lower it even more if the person whose guarantor you are is not paying on time.

5. Constantly manage your credit.

If you, like most Americans, have one credit card, you should constantly monitor it and pay bills on time and in full each month. However, this is not enough for a credit rating. You need to actively manage the card.

An important part of credit management is ordering a copy of your credit report every year. This will let you know about errors that need to be corrected. Checking the report will also allow you to see other credit accounts opened in your name without your knowledge (this also happens).

6. Bargain

Feel free to bargain when it comes to your money. This is especially important when it comes to large purchases such as a house or car, or wages.

Surprisingly, only 38% of millennials are negotiating their first salary, according to a study NerdWallet . This is a big mistake, because employers said they could actually offer a big salary. Three quarters of employers said NerdWalletthat they could increase their offer by 5% - 10% if asked.

7. Be careful when lending to friends or family

At some point, a friend or family member may ask you for a loan. Although you want to help - this is not the best idea. If you still give someone money, imagine that this is a gift and you can not give it away. This way, you maintain a good relationship with a friend or relative.

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