What is the best personal finance rule?

[Mika]

I use the of 50/30/20 rule. This personal finance rule says that you allocate 50 percent of your income for essentials like rent, grocery and bills, 30 percent for things you want, a new t-shirt for instance, and use the remaining 20 percent for savings and investments. With this rule, you not only pay for your necessities but also enjoy some luxuries while still saving for the future. This is my favourite personal finance rule. When you follow this rule, you don't have to sacrifice everything for a secure financial future. You'll have enough to invest because you're saving 20 percent consistently.

 

[Suba]

Everyone will have different financial conditions, so there is no best personal finance rule, because a financial method/rule that is suitable for me may not be suitable for other people. You can imagine a person who has just started working, and lives in a big city, the cost of renting a house is high, the cost of primary necessities is very expensive while the salary or income is still small so it is not possible to allocate 50% for primary necessities, so maybe he would be more suited to using 70: 20:10 rule.

 

[Leah Kelvin]

To live within your means, you have to spend less than your income and avoid excessive loans. In order to achieve this, you must have a financial plan in place, keep track of your spending habits and make deliberate choices concerning money so that you can maintain stability as well as accumulate savings. Some other key personal finance rules are regular saving and investing, having an emergency fund, prioritizing debt repayment, saving for retirement and learning about personal finance. By following these principles, one would be able to save enough money for the future while becoming rich and also ensuring they don’t suffer a lot from financial difficulties. You should remember that any personal finance is subjective implying that it has to be such tailored manner which will suit you well depending on different factors.