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I’ve always said that personal finances are more important than portfolio management, but I still think 
there’s probably not enough people writing or providing education on the topic so I’m going to make a concerted effort to write more about personal finance in the coming year and, to that end, here’s my list of 20 personal finance rules:
The comments above and below are excerpts from an article by Ben Carlson(awealthofcommonsense.com) which has been edited ([ ]) and abridged (…) to provide a fast & easy read.
1. Salary is not the same as savings. Your net worth is more important than how much money you make. It’s amazing how many people don’t realize this simple truth. Having a high salary does not automatically make you rich; having a low salary does not automatically make you poor. All that matters is how much you save out of your salary.
2. Saving is more important than investing. Pay yourself first is such simple advice, but so few people do this. The best investment decision you can make it to set a high savings rate because it gives you a huge margin of safety in life.
3. Avoid credit card debt like the plague. Carrying credit card debt is a great way to negatively compound your net worth.
4. Live below your means, not within your means. The only way to get ahead financially is to stay behind your own earnings power.
5. But credit itself is important. Likely the biggest expense over your lifetime will be interest costs on your mortgage, car loans, student loans, etc. Having a solid credit score can save you tens of thousands of dollars by lowering your borrowing costs so use credit cards, but always pay off the balance each month.
6. If you want to understand your priorities look at where you spend money each month. You have to understand your spending habits if you ever wish to gain control of your finances. The goal is to spend money on things that are important to you but cut back everywhere else and, if you pay yourself first, you don’t have to worry about budgeting, you just spend whatever’s left over.
7. Automate everything. The best way to save more, avoid late fees, make your life easier and get out of your own way is to automate as much of your financial life as possible. It probably takes me one hour a month to keep track of everything because it’s all on autopilot.
8. Get the big purchases right. I know I shouldn’t be so judgmental but whenever I see $50-$70k SUVs on the road or enormous McMansions the first thing that pops into my head is, “I wonder how much they have saved for retirement?” Personal finance experts love to debate the minutia of brown bag lunches and lattes but the most important purchases in terms of keeping your finances in order will be the big ones — housing and transportation. Overextending yourself on these can be a killer.
9. Build up that savings account. I don’t even like calling it an emergency savings account anymore because most of the time these “emergencies” are things you should plan on happening periodically. You have to have liquid assets to take care of things when life inevitably gets in the way.
10. Cover your insurable needs. This is another huge personal finance margin of safety item. Just remember than insurance is about protecting wealth, not building it.
11. Always get the match. I can’t tell you how many times I’ve talked to people who aren’t saving enough in their 401(k) plan to get the employer match. That’s like turning down a tax-deferred portion of your salary each year. I’d like to see more people max out their retirement contributions, but at a minimum you should *always* save enough to get the match.
12. Save a little more each year. The trick is to increase your savings rates every time you get a raise so you’ll never even notice that you had more money to begin with. Avoiding lifestyle creep can be difficult, but that’s how you build wealth.
13. Choose your friends and neighborhood wisely…Trying to keep up with spendthrift friends or neighbors is a never-ending game with no true winners.
14. Talk about money. It takes all of 5 minutes before I hear about politics in almost any conversation these days, but somehow money is still a taboo subject. Talk to your spouse about money. Ask others for help. Don’t allow financial problems to linger and get worse.
15. Material purchases won’t make you happier in the long-run. There is something of a short-term dopamine hit we get through retail therapy but it always wears off. Buying stuff won’t make you happier or wealthier.
16. Read a book or ten. There are countless personal finance books out there. If it bores you to death then at least skim through a few and pick out the best pieces of advice from a few different sources to test out. This stuff should be taught in every high school and college, but we’re often on our own. That means you have to take the initiative.
17. Know where you stand. Everyone should have a back-of-the-envelope idea about where their net worth (assets – liabilities) stands. Before knowing where you want to go you have to know where you are.
18. Taxes matter. I think everyone should try to do their own taxes at least once just to understand how it all works (maybe with an assist from TurboTax). It can be maddeningly complicated, but it can help you save money over time if you know where to look. Take advantage of as many tax breaks as you can and always understand your personal tax situation.
19. Make more money. Saving and/or cutting back is a great way to get ahead, but it’s an incomplete strategy if you’re not trying to earn more by enhancing your career. Too many people are stuck in the mindset that there’s nothing they can do to get a better job, take on more responsibilities or earn there’s nothing they can do to get a better job, take on more responsibilities or earn a higher salary. That’s nonsense.
20. Don’t think about retirement, but financial independence. The goal shouldn’t be about making it to a certain age so you can ride off into the sunset, but rather getting to the point where you don’t have to worry about money anymore.
You make disagree with some of these but remember — personal finance is personal. Feel free to share any others I may have missed in the comments.
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