Here are some simple financial rules to run live by.  To me, simple does “rule”!  If
it isn’t easy and simple, no one wants to do it.  Based on that here are some simple
rules for you.

1. Make your money earn its keep.  That may sound silly but most just let their
hard-earned money lay in a checking account and the only person who makes any money
on YOUR money is your bank!  Is that what you want?  Do you love your local bank that
much?  Why not put some of that money into a money market account so it is earning
its keep.

2  Don’t be in a hurry to pay your bills.  All the bills you receive have a “due
date”.  It is important to pay your bills but don’t be in such a hurry to send them
your money before the due date.  It is important to pay your bills and make sure that
you are not late.  That hurts your credit rating and could also incur some late fees.
 So make sure you pay all bills on time but not before their time.

3.  Avoid credit life on any loans.  Many lenders will suggest that you add credit
life insurance to the money they lend you so the loan will be paid off in case you
die.  It safeguards THEM, not YOU.  Also the credit life charges are very high.  They
make more money on that than the interest they charge.  They may also suggest credit
disability too.  That too is very expensive.  Avoid both.

4.  Don’t over-pay quarterly estimates to the IRS.  Why give the IRS “extra money so
you can get a big refund when you file?  They do not pay you interest on that money
and you also gain no “brownie points” with them.  

5.  Don’t pay your income taxes with a credit card.  The card company will charge you
a “fee” of about 3%.  Yes you may get some mileage for the charge but that is an
expensive way to gain miles.

6.  Debit cards are not good.  When you swipe that debit card at the store, the money
is gone from your account within a few minutes.  Those cards give you no grace period
or “float”.  The float is the time between the purchase date and the due date for
payment.  Don’t throw away the right to use someone else’s money for that period of
time.

7.  Consolidating credit card debt can be dangerous.  All of a sudden you check your
statement and you owe nothing on your cards so you run up some additional debt.  Bad!
 You can really get into deep trouble unless you control yourself.

8.  Service contracts can be expensive.  They usually piggy-back the warranty that
you have on whatever you bought and may extend it just a little further.  Ask
yourself, “Do I really need the extended warranty and is it really worth the
additional expense?”  Most of the time it isn’t.

9.  Is leasing really a better deal?  That depends on your cash flow.  Usually
leasing is more expensive but it will help you avoid a large down payment which can
hurt your cash flow.  Remember just because you lease something, it does not make it
automatically tax deductible.

10.  Debt-free usually equals asset free.  You must remember one simple rule of
finance; “Money is worth what you can borrow it for”.  To illustrate that draw a line
across the middle of a sheet of paper.  That line represents what it cost you to
borrow money.  If it cost you 10% to borrow money, put that on the line.  Now examine
your debt.  If your mortgage is at 6%, after taxes it is around 4% and that goes
below the line.  Credit cards at 16% go above the line.  It’s the ones above the line
to be concern about.  Don’t be in such a hurry to give the bank all your low cost
money so that they can lend it back to you later at a higher rate!

There you have it; simple rules to gain control of your finances and better
understand how to deal with money.  Good luck!