The 10 Commandments of Personal Finance
By:  Joseph Chua     |     01 April 2016

The 10 Commandments of Personal Finance

Thinking of how to be on top of your finances? Here are some basic guidelines, and follow these 10 commandments:

10. Start Taking Action

Reading about how to be on top of your personal finances is a good start, but it wont improve until you start taking action and putting what you learn into motion. Before you can start seeing improvement in your personal finances, you need to begin, right now. Continue reading the commandments below, and you have to follow these steps if you want to be on top of your personal finances.

Print out this list and place it where you will see it every day, so that you are constantly reminded that your personal finance is a priority in your life and that you will take some action each and every day to try to improve.

9. Pay Off All Credit Card Debt

Credit card debt is, and in most cases, the Number 1 enemy to your personal finances. It can have a huge negative impact if you constantly have huge oustanding credit card bills every month. Work out a plan to pay off any credit card debt that you currently have. Begin by paying off the outstanding with the highest interest then to the highest, using the snowball method that best fits your spending profile. Make this a top priority.

8. Differentiate Between Wants and Needs

To keep your personal finances in order, you need to understand the difference between wants and needs. There is nothing inherently wrong with small luxuries, and you should be able to enjoy many of the non essential things you have. However, it is important to realize that wants are not needs. If you master this skill, your spending order will be in much better shape.

Take some time to carefully look at your needs vs. your wants. If you are having trouble identifying the differences, draw up a plan to eliminate impulse spending.

7. Spend Less Than You Earn

There are no two ways around this one. If you want to keep your personal finances in order, you need to spend less money than you earn. That means either paying for items and services that are less than you currently earn, or figuring out a way to increase your salary so that you can spend more, but still less than you earn. Either of these is perfectly fine.

Start tracking your spending to see if it is more or less than you are earning each month, and create a budget so that you can continue to track in the future. If you are spending more than you earn, you need to decide whether to cut down on unnecessary costs or alternatively, figure out how to increase your income. 

6. Pay Yourself First

Before you pay any of your bills, you should first pay yourself a minimum of 10% of your monthly salary. This money is not part of your monthly spending budget and is meant only for your own savings.

Setup a banking account so that your monthly salary is automatically deposited into another account that is different from your monthly expenses.

5. Set Financial Goals

In order to achieve your financial goals, it is very important to know what those goals are. Nobody can determine these goals except for you. You need to take the time to figure out exactly what your financial goals are so that you can take the necessary steps to reach them.

If you are not sure what your financial goals are for this year, next year and 10 years from now, start thinking of your goals now and list them.

4. Educate Yourself and Be Responsible for Your Decisions

Although it may be more convenient to hand over all your money issues to somebody else, it is time you stop doing this. Part of being financially responsible is having the final say in all decisions about your finances. That does not mean that you can't seek advice or get opinions on your finances, but in the end your money is your responsibility, and you are the only one who is going to truly look after your own interests.

If you have appointed someone else to take care of your finances, begin to take back control. No matter what, spend an hour or two each week reading our personal finance articles in the MyFinance Library section or email us if you have any questions.

3. Save and Invest

Take the money that you pay yourself first and either save or invest it to make it grow and work for you in the future.

If you are carrying credit card debt, pay it off first. But also make sure to take full advantage of the saving and investing opportunities that are available. Make sure you have an emergency fund.

2. Protect Your Finances


You have to take the necessary steps to make sure that your assets are protected in case of a disaster, usually through an insurance plan.

Take the time to make sure that all your assets are properly insured, and re-evaluate this every few years or whenever a major change in life’s journey occurs, such as marriage or a new addition to the family. Also be sure to compare insurance premiums and coverage on a regular basis, since there might be cheaper and better plans every once a while.

1.Donate to Worthy Causes and The Less Fortunate


No matter how difficult your personal finances may appear, there are a lot of people that are far worse off than you are in the world. It is important to nurture a sense of giving and to be thankful for all of the things that you do have. That means donating to worthy causes on a regular basis.

Find a few causes that you believe in, and donate to them generously. Don't assume that money is the only way that you can donate. Volunteering time and skills are also appreciated by most charitable organizations. You can research organizations at charity homes in Malaysia. Or you can zoom into the states that is convenient for you. Donating is helping others and you will be blessed in many other ways.




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