Reassess Financial Guidelines
There are several financial guidelines that have been repeatedly emphasized. However, a lot of these are imperfect or do not cater to each person specific circumstances. Instead of mindlessly following these rules created by others, consider a few opposing viewpoints.
Consider whether or not these financial rules make sense to you:
“Cutting cost is the key to long-term money success”
Most of the well-known personal finance gurus focus on cutting cost and saving money. But, there is only so much you can cut exceptionally in today’s high cost of everything. So what do you do?
How about increasing your income? At a certain point, it’s much easier to increase your paycheck another $300 per month than to cut another $300 each month from your bills.
Put your efforts on creating more income. Ask for a promotion, get a new job, or a second job can be easier to do with less effort and grief than making more cost cuts at home.
Although you first need a budget checkout: Â STRATEGIES FOR SUCCESSFUL BUDGETING
“Leasing a car is always the wrong choice”
Most cars today last an average of 10 years before it starts to fall apart on you. If you want to keep a car that long then buying is the best option. However, if you like to get a new car every few years, leasing is a much better option.
Pull out a calculator and do the math yourself. Monthly payment vs. repair cost is one thing to consider. Think about all the expenses included with both options.
“Always maximum out the amount you can contribute to your 401(k)”
That’s another one that sounds good, but do you have your emergency funds set aside? How will you pay for those unexpected expenses that jump out of nowhere? What if you lose your job?
There are other things that should be considered before putting all the money into your 401(k) or other retirement account.
Start building your emergency fund with these 4 easy steps
Learn how to pay off your debt effectively with this mini-course
These are just a few of the common financial rules that you should consider breaking. No rule applies to all situations. Examine the rules you’ve been following and see if they make sense for your financial situation.