Save. Spend. Splurge.

The 10 Golden Rules of Personal Finance

There are very few exceptions to what I call the 10 Golden Rules of Personal Finance.


  1. Don’t regularly spend more than what you make*
  2. Your gross income is not what ends up in your pocket, that’s your net income so budget with that
  3. Pay the highest interest rate loan first, no matter how big or small the debt is
  4. Retirement is not a right, it’s a privilege you earn and save for
  5. Don’t borrow what you can’t afford to pay back, be it from the bank, government or family
  6. Buying a home (hard asset) is not the only or (sometimes) the best way to invest your money
  7. Thinking you can ignore your money for 40 years and have enough to retire is ignorant
  8. Saving money as early as possible gives you the best start in life; there is no magic to it
  9. Everyone is out to get your money, but it’s your responsibility to take care of it
  10. Overdraft is not ‘free money’; there’s no such thing as ‘free money’

*Unless of course you are like me with an irregular income and you already made the money in advance to be spent in times of $0 income… or just because you like shiny new things (within reason).

Inspired by PK‘s post, and if you want 36 Golden Rules, check out Tim’s post.


  • the spunky banker.

    #10. Overdraft is not free money.

    Please tell that to 60% of the customers who come to my bank, because they do not listen when I tell them.

    • save. spend. splurge.

      That is both shocking and surprising that people think it’s free money. They’re exactly the folks who shouldn’t even have it on their account.

  • Rob @ The Military Financial Planner

    Good stuff, but I disagree with #2. I always budget on gross pay. Here’s why.

    Sure I don’t have control over SocSec and Medicare taxes, but I still pay them, and they are predictable expenses. I have control over how big the FITW amount is based on the deductions I claim. And other deductions from my gross pay include: group life ins for me, group life ins for my family, another life ins policy, a charitable contribution, contributions to a deferred savings plan, direct deposit to a savings account, group dental insurance, and a direct deposit to another savings account.

    Why would I not account for all of those items in my budget? That would be the result if I just looked at my net pay.

    • save. spend. splurge.

      I guess you could work it out like that, but people who are starting out in money management aren’t at that stage. They just see what’s in their bank account to cover rent, food, debt, etc.

      If you wanted to split it out, by all means, yes go ahead. This is what I did in the U.S. as well, I liked knowing how much I paid to each area each month, but I think this level of detail is overwhelming for a lot of folks.

  • Tania

    Great concise post! I’m copying and pasting to my notes. I was just thinking about this the other day. I listen to a ton of personal finance podcasts and noticed they all differ widely in their views on investments, pre-nups and real estate. However, the common thread of all is the lifestyle (spending) and paying attention to your money. I feel reading a wide variety of personal finance advice is the best because you start to see these common threads. No one person should be a guru.

    I understand the math behind the interest rate debt paydown. However, there is a great psychological benefit to using the snowball method of paying the smallest first. Especially if you’re going into full attack mode on debt to paydown as quickly as possible. When I calculated on my own, if I paydown everything in a year (my goal) then not considering the interest rate and going smallest to largest, the additional interest was a very small monetary effect. Also by knocking off all the small debts first, monitoring/managing became instantly easier and more efficient (less bills to manage each month). I think it all depends on assortment of debt and what drives someone.

    I like the no free money. I’d also no easy money. I think people often lose money too going for the get rich quick schemes.

    • save. spend. splurge.

      As long as you’re clearing your debt, it’s all good. How you go about doing it, is your business… although rationality dictates paying down the highest interest rate first.

  • Krista

    I love this list. Especially #7. There are so many of us out here now talking about retirement, the advantage of time, how pensions and social security are disappearing that no American should have the excuse that they didn’t know. Don’t be ignorant!

  • Phroogal Jason

    #5 – Every time you borrow to buy anything; you’ve just allocated your future time to working the “job you dread.”

  • Lisa E. @ Lisa vs. the Loans

    YES! Number 4 especially – no one is ENTITLED to retire. You save up and you earn the right to do so. Great list.

    • save. spend. splurge.

      As I mentioned in the other comments, I knew a woman who retired with her friends thinking she was entitled to it.. ended up quitting a job that paid a lot and couldn’t find one afterwards when she realized she had no money to actually retire.

  • Liquid

    I like number 9 the most. People such as financial advisors often have ulterior motives when they recommend products to their clients. It’s important to be in control of our own money, especially once we start to raise a family. We have to be financially responsible TO the people we love, but the only person we are responsible FOR, is ourselves 🙂

  • Victoria @thefrugaltrial

    Oh how I wish I remembered number 1 and I wouldn’t be in this debt mess! On the plus side, I am £100 under budget this month 🙂 Good tips!

  • Alicia @ Financial Diffraction

    Yep. Now I’m no poster-person for the right thing to do necessary, but… I do know these things, NOW. It took a bit, but I’m getting there 🙂

  • Money Saving Dude

    I like number 8, and I also think that saving money should be done everyday, and not only once a week, or once a month, or once a year.

  • Kathy

    I like the one about retirement. I know some people who couldn’t make ends meet on full salary. How do they think they’ll manage on reduced pension or social security?

    • save. spend. splurge.

      You’re telling me. I knew a woman who retired at 55 because all her friends were retiring at 55… they went on a big trip and then she realized she actually couldn’t afford to retire.

  • AdinaJ

    I agree with these, and I still find it hard to believe they’re not “duh, obvious” to everyone. I’m always surprised by how (seemingly) little people are bothered by whacked out finances. I’d be a nervous wreck!

    • save. spend. splurge.

      I had no idea these things were THINGS until I started paying attention to my money. It’s stuff that’s common sense once… you learn them 😉

  • SarahN

    Time and again I’m astounded by my colleagues lack of financial literacy. People working in hard manual (or menial) labour into their old age cause they don’t know how to save money. And then how this (somehow!?) should be the company’s problem.

    Take the guy that got drunk, wrote off his car (which he bought with a loan) and another car. Instead of saving and paying off his debts, he’s hoping the company will give him voluntary redundancy (rather than him resigning and just being paid out benefits). Seriously, I can’t believe my company would even consider it… but we’re just too soft!

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