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The 10 commandments of personal finance

© Adam Gault / Digital Vision / Thinkstock © Adam Gault / Digital Vision / Thinkstock

By Andrew Housser

With the new year underway, many people have resolved to get a better handle on their finances this year. Whether you already have a good working plan or are finding that your resolution is wobbling – or are getting a late start on your resolution – these 10 commandments of personal finance can help set 2016 on the right financial footing.

1. Approach debt with caution.
Among U.S. adults who have a credit card, the average credit card debt is more than $5,000. This statistic should serve as a caution. Once you begin going into debt, it can be hard to get out. If you do not have debt currently, vow to avoid using credit unless you are certain you can pay the balance each month in full and on time.

2. Make a savings plan.
A credit card should not be your emergency fallback. If you must rely on a credit card in a financial emergency, odds are good that it will be very difficult to pay off that debt. Instead, make building an emergency fund a priority. The fund should eventually cover six to nine months of base living expenses.

3. Pay yourself first.
Even if you can only save $5 or $10 at a time, or if you have to take an extra short-term job or sell some belongings, make saving your first priority. Then, if you must use those funds, restore your savings before you do anything else.

4. Set attainable expectations.
If you do have credit card debt, create a plan to pay it off. Know what you can achieve, and in what time frame. If you set a goal that you feel you can never reach, it is all too easy to become discouraged and give up. If you can pay only $5 more than the minimum payment on your credit card, do that. Make the commitment to do more as you can – and follow through.

5. Keep yourself accountable.
Having an accountability partner can help you get out of debt, or reach other financial goals, more quickly. Along with your spouse or partner, you might consider sharing goals with a friend or relative to keep yourself even more accountable to do what you have promised yourself.

6. Do not invest in foolish ideas.
Especially if you are struggling with financial hardship, it can be tempting to buy into a get-rich-quick scheme. Whether gambling, a too-good-to-be-true investment or a multi-level marketing plan, these ideas separate people from their money. Invest in yourself instead by adding to savings or a retirement plan, or repaying debt. (Remember that if you pay off a credit card with a 15 percent interest rate, you are earning a better effective return than most investments.)

7. Be willing to sacrifice for what is most important.
If your goal is to buy a home, you may need to give up eating out or take a second job to build a down payment. If you need to get out of debt, you may need to curb purchases beyond necessities. If you want to take a dream vacation, you may have to postpone other goals to make that happen. Post a picture representative of your goal where you will see it daily to remind you what you are working toward.

8. Protect your family and possessions.
Make sure you have adequate insurance coverage to protect your home and family. This includes homeowners or renters insurance, health insurance, and if you have dependents, possibly life insurance. Also put in place appropriate legal documents, including a will, trust and advance directives.

9. Give something away.
Giving will help you feel better and more connected to the world. Remember that your donation does not have to be cash. It can be goods, your time or even a donation of life by giving to a blood bank.

10. Remember money isn’t everything.
Especially when you are struggling with debt or money problems, it can be hard to remember that money is not the most important thing in life. Your health and relationships always come first.

If you still find yourself in debt beyond your ability to pay, consider assistance from a reputable debt negotiator or credit advocate. Above all, pledge that by following these commandments, you will work to take charge of your money and enjoy things in life beyond financial worries.

Andrew Housser is a co-founder and CEO of, a free one-stop online portal where consumers can educate themselves about personal finance issues and compare financial products and services. He also is co-CEO of Freedom Financial Network, LLC providing comprehensive consumer credit advocacy and debt relief services. Housser holds a Master of Business Administration degree from Stanford University and Bachelor of Arts degree from Dartmouth College.
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