“Don’t buy outside of your means”
“Make sure you save 20% of your income”

Finance tips. You see them everywhere – on the web, on television, on the radio, and even in little book cafes where you grab your daily cuppa.

You’re trying to keep your financial health as stable as possible so you follow as many of these tips as you can.

You need to rethink some of these finance rules to live by because you might be doing them wrong:

Say No To Credit Cards

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You don’t need to forgo credit cards. Just because you own a credit card does not automatically mean that you’ll end up in credit card debt. You just need to be responsible with your utilization and payments and you’ll be fine. This “don’t ever get a credit card” tip should only be applicable to careless children who have yet to understand the value of money, not to responsible adults.

You may be awesome at your job or your business might be doing well today but remember that your financial health won’t always be stable. What happens if your income suddenly stops? Will your savings be able to cover your daily expenses, bills at home, and possibly a family to feed? You can try to borrow money from family or friends but they’ve got their own bills. You can also try borrowing from a loan shark but your interest rates will be ridiculously high. If you have a credit card, you don’t need to involve anybody else. When your income stream comes back pay it in full as quick as you can, and put the card away for the next rainy day.

Owning a credit card helps you build a credit score. Remember that some companies in telecommunications, utilities, and even financing decide whether or not to provide you with service based on your score. Build a track record of good credit card payments to increase your chances of getting that “Yes.” You may still be able to get a loan from some financing companies without a track record, but your interest rates will definitely be higher because you’re considered to have “higher risk”.

Shop In Bulk To Save

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If you’re budget conscious, then you’ve probably shopped in bulk to save. You can save money if you actually use everything you buy.

The problem with buying in bulk is your tendency is to do it for everything in your grocery list without considering how and when you’ll be consuming the items. Let’s say you purchased a whole crate of chillies because they’re $2 per kilo. You’re all excited because you got such a good deal, but then you realize that you have no idea what you’re supposed to do with all of those chillies. If you end up giving away or throwing away most of the chillies, then you didn’t really save anything. You just wasted money. However, if you turned them into chilli oil or chilli sauce to replace the $8 hot sauce you always buy, then you saved. Now you have chilli sauce to last you a few good months. If you made a really big batch, you might even want to consider selling your product. Who knows, your homemade food items might just be the next Tabasco. Not likely, but who knows?

Be smart and purchase products that you will use consistently and/or that are non-perishable. This way you put all those items to good use. When it comes to produce and meats, just stick with your weekly grocery list.

Buy A Brand New Car Outright

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Before buying a car consider if it’ll be the same car you’ll need in 2 years. Your needs change all the time, especially when you’re younger. Let’s say you bought a brand new Nissan Micra for around $16000. You’re single and you’ll only be driving it in the city, it’s the perfect car for your budget and lifestyle. What happens if you suddenly fall in love and decide to start a family? What if you get promoted or switch jobs that require a bigger, sleeker car? Are you just going to get rid of your $16,000 car? Are you going to get a second car? Are you going to hire a car every time your own can’t deliver what you need? Whichever you decide to do then is going to cost you more money.

This is what makes car finance a good option for most. Get a Nissan Micra today and then switch to an Xtrail a couple of years after, easy-peasy! You don’t need to have a large amount ready at hand since car finance repayments are typically weekly, fortnightly, or monthly.

Spend To Earn

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“You’ve got to spend money to make money.” There is truth in this. When you invest in a business, you get your capital back and then profit. Most people will see a luxury item as an investment, it’s not. Buying an $800 pair of shoes that last for six years as opposed to $100 that only last six months is a smart purchase, not an investment because you do not profit. Don’t try to convince yourself that it is an investment because you wear it to work and meetings every day. You did not make money because of those shoes.

Never ever spend money for the sake of points. Don’t think you’re “earning” because of the “freebies” you get from your credit card, frequent flyer program, shopping centre rewards card, or grocery points card.  When you shop more for points than necessity, you end up throwing away money instead of getting something for “free”. Also, when you buy three to get one for free, did you really need three to begin with?

Another Day, Another Dollar

There are people who put in ridiculous hours at work, hustling day in and day out, thinking that’s the only way to feed their families. While it does take effort and time, it doesn’t have to be twelve hours every day. With this mindset is the stigma that money is difficult to earn. If you’re not having a hard time, then you’re doing something wrong. This stigma makes us work longer hours in the office, making sure that our dollar is “well earned”.

Breaking out from that linear mindset and looking for ways to make passive income is a good start.  Try starting a blog or a YouTube channel about something you’re truly passionate about and link it to Google Adsense. Try getting into the stock market. Put your money in high interest savings accounts. If you have an extra apartment, rent it out. Don’t limit your money making to your day job, there is so much you can do to earn an extra money.

No Unnecessary Spending Until You’re Debt Free

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You truly have to sacrifice a few things when you have debt to pay. No more $4 coffee every day, no more daily and expensive taxi rides, and no more extravagant dinners. Although you shouldn’t spend needlessly, that doesn’t mean that you shouldn’t spend for the little things that make you sane and happy. What if you can only afford to pay off your debt in 10 years? Will you spend the next 10 years forgoing family holidays? Of course not!

It sounds like common sense, but people do take it to the extremes sometimes. You can have an ice cream cone from time to time, and you absolutely can bring your kids to the cinema or the skating rink once a month, even when you’re in debt. Yes, it does take money but what is life if you can’t even enjoy the little things?

Remember that this isn’t an excuse for you to needlessly spend for the latest iPhone or a lavish trip to Europe. It’s all a matter of being smart and knowing what is truly important to not only your physical but also mental health. Don’t forget that recreation is actually important to your psyche. Don’t end up like one of those people who spend their entire lives paying to survive.

Invest In Your Health

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You should take care of yourself. The better you take care of yourself today, the less you’ll have to worry about or spend later. Are you doing it the right way?

Taking care of yourself doesn’t mean that you should be on a gluten-free, low-carb, slow-carb, paleo, juice cleanse, or any other fad diet out there. Nor should you spend hundreds of dollars for celebrity health and fitness programs. You do, however, need to invest in your personal healthcare. Remember that there are limits to your Medicare coverage like dental, optical, chiropractic, and physiotherapy. Get wider coverage healthcare with a mix of public and private insurance.

Fresh food and vitamins should also be your priority. Avoid processed food and fast food, and get fresh food from your local market. Cook more at home to save yourself from all that unhealthy fast food and cut costs. With proper nutrition comes proper vitamin intake, and not  cheap daily multi-vitamins. Buy high quality individual vitamins instead. If you’re not sure which vitamins to take, here’s an in depth guide on how to optimise your supplements.

Remember that some rules, although effective, aren’t for everyone. If you ever find yourself losing money after following a finance tip, then you either misunderstood it or it’s not the right one for you. Stop – it’s better for you to move on to the next finance tip than to be stuck spending more for something that someone else said.