“Three Principles of Personal Finance”

Personal Financial Planning

Lots of things in life come in threes. Three strikes, Three Blind Mice, third time's a charm, and every mom's favorite, “I'll give you to the count of three to get upstairs.” But the best triplets we've seen in a while are the Three Principles of Personal Finance {via Mint.com}:

  • Spend less than you earn. It's an obvious one, but some of us need to be clonked over the head a few times before we get a clue.
  • Be smart about what you do with your money. Before you go tearing out checks for the mortgage, the Feds or the gas company, put some of your greenbacks into a interest-generating money market account. If you fancy investing, choose the right stocks that will pay off in the long term or shop around for the right mutual fund, preferably one that will outperform the S&P 500 index. If your employer offers a 401K, contribute (it's not taxed!).
  • Expect the unexpected. Such a cliché, but so true. Everyone should have an emergency fund like a high-yield savings account – in case the toilet in the bathroom above the kitchen explodes – and insurance, whether it's health, home, life or renter's. You just never know.

Read more on Mint.com: Three Principles of Personal Finance: All You Need to Know for Financial Success by Aaron Patzer