It’s often said that “real life” starts after you graduate from school. You have rent, groceries, laundry, taxes and money. That’s when you’re really “adulting.” Here’s a few simple rules of money management that will go a long way no matter what phase of the ‘adult’ chapter you are in.

PAY OFF YOUR DEBT AND SAVE YOUR CREDIT

Debt will be the one main contributing factor that will slow down the wealth you’re able to build and create. At the very least always make sure to pay the minimums to remain in good standing with the lenders. Some credit card companies significantly increase your interest rates if you fail to make the minimums 3 times within one year.

Failure to make the minimum payments will have a negative impact on your credit score. Negative ratings on your credit score will impact your ability to borrow money hence making it more difficult to finance vehicles, find a place to rent or purchase a home. And don’t make ‘just paying the minimums’ a reason to celebrate. Make sure you are activately paying down your debt, not just keeping it afloat.

EXPENSES VS INCOME

Every business focuses on the bottom line, with the objective to increase profit year after year. This is often accomplished by either increasing sales or cutting cost. The bottom line is what’s important so that the business can continue to survive, service the marketplace and be viable in the future.

What if you looked at yourself like a business and aimed to increase your profit margins month to month or year to year? Would you always have increase? Take on a CEO mindset when looking at your personal finances and focus on increasing your personal bottom line. Ensure your expenses are less than your income, if not, think about what cuts or adjustments need to be made or how you can bring in more income. Remember - You are the CEO of your life.

SAVE

You ever have that friend that resembles Kimmy Gibler from Full House? She has a home, yet she always finds a way to your house, eating your food, watching TV, and maybe even wearing your clothes. You often have to wonder if she even has a home of her own. This is money, if you don’t give it a home to go to. It will always escape you and find a home of its own in a new form like, your newest handbag, the black dress with the tag still on it or the countless morning lattes.

Get in a habit of saving money. If you’re not, start now and if you are, challenge yourself to save more. Give a percentage of your hard earned income a place to “live” until further notice. Setting up an automatic savings plan makes things easier because it’s automated and the money gets saved before you spend it - try it on for size.

UNTIL FURTHER NOTICE

Saving money needs to be intentional, with a goal in mind. If not, you’ll reach a point and ask, “What’s it all for?” Then splurging begins and money gets wasted.

With various investing strategies like stocks or real estate, it can be very overwhelming on where to begin. One main thing to factor in when it comes to investment vehicles is your risk tolerance. How comfortable are you with losing money? How much money are you willing to lose? Are you content with high losses if there’s a potential for high gains? Other factors to consider are your goals and the time horizon for them. Don’t just invest ‘where everyone else is investing.’ Consider your own goals and needs and invest where it makes sense for you.

“FREE” MONEY, MO’ MONEY

Some companies offer retirement plans where the company matches your contribution. If yours does, sign on as soon as you’re eligible. If you opt out, you’re passing up “free” money from your employer’s contribution. Every little bit goes a long way. Remember when you used to fill up your little piggy bank as a child? It was those small gradual contributions that eventually stuffed your little piggy. Now factor in compounded returns over the decades of your career - this could be a significant amount!