3 Rules of Smart Money Management - Genisys® Credit Union

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3 Rules of Smart Money Management

on 4/12/2017

Couple holding a piggy bank

Are you keeping the three smart money laws? You should, because if you do these three things, you could have no financial worries. Really!

There’s a lot of information about how to be smart with money, how to invest wisely, and where to save.  It’s all good information, but the foundation of not having money problems is very simple.

Here are the three laws you need to keep.

Follow these, and you’ll find yourself with extra cash on hand within a few months.


1. The Law of 10 Cents.
When you keep this law, you take 10 cents of every dollar you earn or receive and hide it away. You can hide it in your credit union savings or share certificate account, in your mattress, or in a hole in your backyard. It doesn’t matter – the point is to get used to living on 90 percent of your income while 10 cents of every dollar gets put away. Some people call this “paying yourself first.”  Whatever you call it, follow this rule, and you will soon be on your way to building a very comfortable nest egg.

You might think that 10 cents on the dollar is not going to get you very far.  But consider this: you can get used to living on 90 cents for every dollar you earn, and after 10 months, you will have a full month’s salary put away. Not bad, huh? In 10 years time, you can technically take a year off.  The important starting point is to get used to keeping the Law of 10 Cents.

Rule 1.a.  We don’t really recommend storing your savings in your mattress or in a hole in your nicely manicured lawn.  You get the point, right?


2. The Law of Organization.
How much money is in your checking account right now?
How about your savings account?
How much do you owe on your credit card?

If you don’t know, and if it would take you more than three minutes to find out, you’re not keeping the easy law of organization.  According to the Law of Organization, you should develop a clear picture of what is where at all times and update it frequently.

Set up a system for tracking all your accounts. It’ll take a few hours to set it up, but once you’ve done it, regular maintenance shouldn’t be more than 20 minutes a week.

Think also of how much you can buy with the money saved on late fees, insufficient funds fees, and all the other expenses of not having your finances in order. The Law of Organization will help you avoid all that and more.

Rule 2.a. Remember, the balance in your checking account is what you have already spent, not what your account balance shows at your bank or credit union.  The balance doesn’t show outstanding debits or checks that have yet to clear your account.


3. The Law of Enjoying the Wait.
It’s widely accepted that good things come to those who wait. If you MUST have things before you have the money for them earmarked, you’ve fallen prey to the great American debt machine. The Law of Waiting states that you PAY, and pay well, for having things NOW.

If you can wait until later, and put money away specifically for the purchases you have in mind, you will have outsmarted the debt monster!

How much do you pay to get things sooner? Look at your interest rate and figure it out. Debt isn’t cheap. Think of how many things you could have bought with that wasted money! When you realize how much smarter is it to buy things when you have the money on hand, you’ll begin to enjoy the wait.

Rule 3.a.  If you absolutely cannot wait because you need an emergency repair or replacement, make sure you have a plan to pay off your debt.  That probably means waiting for other things.


If you’re serious about getting your finances under control, follow the three laws of smart money management, and you will be well on your way.


© Genisys Credit Union and www.genisyscu.org, 2017.  Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited.  Excerpts and links may be used, provided that full and clear credit is given to Genisys Credit Union and www.genisyscu.org with appropriate and specific direction to the original content.

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