Managing money can be a daunting task, especially if you don’t have a solid understanding of how to make your money work for you. Fortunately, there are a few popular finance rules that can help you take control of your finances and build wealth over time. Here are some of the most popular finance rules to manage money:


The 50/30/20 Rule

The 50/30/20 rule is a popular budgeting strategy that involves dividing your income into three categories: needs, wants, and savings. The rule suggests that 50% of your income should go toward your needs, such as rent, utilities, and groceries. 30% of your income should go toward your wants, such as dining out, entertainment, and shopping. The remaining 20% should be allocated to savings and investments, such as retirement accounts, emergency funds, and planning for goals.


The Rule of 72

The rule of 72 is a quick and simple approach to calculating in how many years your investments will double in value. Simply divide 72 by the annual interest rate or rate of return on your investment to determine the number of years it will take to double your money. For example, if you have an investment with an annual return of 8%, it will take approximately 9 years for your money to double (72 divided by 8 equals 9).


The Debt-to-Income Ratio

The debt-to-income ratio is a measure of how much debt you have compared to your income. To calculate your debt-to-income ratio, add up all of your monthly debt payments (such as credit card bills, student loans, and car payments) and divide by your gross monthly income. The result is your debt-to-income ratio, expressed as a percentage. Lenders typically prefer a debt-to-income ratio of 36% or less, as it indicates that you have a manageable amount of debt compared to your income.


The Emergency Fund Rule

The emergency fund rule suggests that you should have at least three to six months’ worth of living expenses saved in an emergency fund. This fund can help you cover unexpected expenses, such as medical bills, car repairs, or job loss, without having to rely on credit cards or loans. To calculate how much you need in your emergency fund, add up your monthly expenses (such as rent, utilities, groceries, and transportation) and use the RAINY DAY FUND GOAL CALCULATOR.


The 10% Rule

The 10% rule suggests that you should save at least 10% of your income for retirement. This can include contributions to a 401(k) or IRA, as well as other investments or savings accounts. Saving for retirement early and consistently can help you build a strong financial foundation for your future.

By following these popular finance rules, you can take control of your finances and make smart decisions about your money. Whether you’re trying to save for retirement, pay off debt, or build an emergency fund, these rules can help you achieve your financial goals and build wealth over time.


Never make expenses for showoff. Prioritize your needs over wants.