3 Money Rules that Can Help You Stay Out of Trouble

Financial ignorance can cost you heavily and a number of surveys show that people usually pay due to this.

That said, being mindful of economics as well as your personal finance doesn’t mean that you won’t stay out of trouble but at least, you’ll recover faster.

Keeping this mind, here are 3 money rules that can help get you out of trouble:

#1: Knowing the difference between needs and wants

Apart from food, shelter, clothing and our relationships, everything else is a want. How you spend your money between the two is really your choice even if it doesn’t seem that way. For example, if you have a huge mortgage, then it was you who chose to live in that home. Distinguishing between your needs and wants can be empowering and can keep you in the green.

#2: Scarcity is what makes your choices

While it’s great to assume that we can have an abundance of resources, the truth is that we don’t. If this doesn’t register, you are going to run out of money sooner or later and live from paycheck to paycheck. The more you spend on stuff instead of the things that matter like an education or retirement, the more you’re bound to end up broke.

#3: Every money decision carries a cost

Every money decision that you make carries an opportunity cost. For example, if you decide to go to college instead of working full-time, that carries a cost – one where you won’t earn as much. For that matter, you might have to take a loan in order to go back to school, and one cost that you will have to pay back later.