Rule #1 Spend less than you make

Only pay cash/debit for anything you buy

If you can’t pay for all of it with cash, then you can’t afford it

Track your spending. Review it each month. How much do you spend on entertainment, utilities, shopping, gas, groceries.

“Life” expenses (variable expenses) such as groceries, shopping, eating out, entertainment, gas, shouldn’t exceed 25% of your income monthly


Your mortgage/rent payment should not be more than 25% of your monthly take home pay (or one weeks wages)

If purchasing put down 20% to avoid paying PMI (private mortgage insurance)

If you can’t afford payments on a 15 year mortgage then you can’t afford the home


Never lease

If you can’t afford payments on a 3 year loan, then you can’t afford the car.

Total car value should not exceed 50% of your annual income.

New cars lose 17% of their value in the first 4 years. Only buy 4 year or older model cars.


Save 15% of your income

Build and keep an emergency fund of 6-8 months living expenses. This should only be used for emergencies, job loss, insurance deductibles, etc.


Max out any employer retirement account to the company match (if you don’t you’re turning down free money), then max out a Roth IRA.

Inflation raises on average 4% each year. Keep this in mind when anticipating how much money you’ll need in retirement, calculating inflation and taxes.


Buy the best policies money can buy.  If there is one are you don’t want to skim on it’s insurance coverage for your health, home and car.

Only buy term life insurance and only if you have dependents that depend on your income.  Life insurance is meant to replace your income in the event you die early.  If you are in retirement or a child not earning income you do not need life insurance.

Never buy whole or universal life insurance.