While you definitely need a spending plan, it’s never one-size-fits-all. The key to building financial health is to give yourself rules, but make them work for you.

I did it. I’ve put together my 10 money rules that helped me create the life I want to live. I encourage you to take them and tailor them to your way of life, your values, and your priorities. Then create your own list that’s organized but not obstructed.
And join over 800,000 readers getting our Rich Life Insiders newsletter:

22 million jobs were lost during the Covid-19 pandemic in 2020. Careers ended in the blink of an eye. Unfortunately, many people found themselves unprepared for such an event. While grim, this serves as a valuable lesson. When times are good, work hard and fast to put away a year’s worth of emergency funds. This one action alone will alleviate much of the angst you feel when thinking about money. Learn more about creating an emergency fund here
wallet with phone and money

If this seems extreme to you, adjust it. Make your #1 rule: Always have six months of emergency funds available. Remember these are YOUR rules to live by, not mine. 

When you’re beginning to save, your emergency fund is the place to start. Once that is built up, you can move on to a high-yield savings account. For me, this is a personal commitment to my future. I suggest you have a portion of every paycheck automatically directed to this account, sight unseen. Read my post on the best savings accounts to help you choose the best option.

Not ready to invest that amount of money? That’s OK. Maybe your money rule can be: Invest 5% and save 10% of gross annual income. Or invest nothing at all right now. You can watch this YouTube video for more tips on what you should do with your extra money:
Let’s put it this way … ditch the plastic. To build good financial health, it’s important not to carry large amounts of debt where interest accrues. Many people fall into the credit card trap thinking they can just pay it off. But then something comes up, a trip to the emergency room perhaps, and that plan goes out the window. One of my keys to saving money is spending what you have only when you have it. Learn more about making expensive purchases by reading my in-depth guide.
I love reading books and am always anxious to learn something new. That’s why I made ‘Ramit’s book-buying rule’ which allows me to buy any book I find interesting. That’s my thing. You might have something that is that important to you where you aren’t depriving yourself of something you love. Perhaps choose a few things that make you happy and fill you up; then form your rule around those.

Love gardening? Your rule #4 might look like this: Never question spending money on gardening supplies, flowers, sunblock, and manicures.

A luxury, sure, but I travel a lot, and this is important to help me stay motivated (and comfortable). Having a bigger seat and more space ensures I arrive at my destination feeling rested and energized.  
This may also be a non-negotiable for you, or it may not even be close to your money rules list. For me, I indulge every now and then when it comes to comfort. 

Sometimes buying cheap ends up being expensive, and spending a little (or a lot) more for quality saves money in the end. For example, I enjoy buying high-end electronics because they last longer, clothes because they don’t tear or rip as easily, and cameras for their reliability. Some of these items can be passed on for generations. Might not be a bad rule to adopt as your own.
Health and education truly are rewards that keep on giving. If you spend on an online course that helps you learn data visualization, you now have a new skill you can sell as a data consultant.

Those few extra sessions with your trainer at the gym will make you feel good about yourself, energizing you, motivating you, and perhaps even inspiring you to think more creatively on a project or with a particular client.

The ‘no limit’ part of this rule might scare you, so perhaps a cap of $100/month on fitness classes and $10,000/year on education. Whatever makes sense to you. 
I refuse to wake up in the morning not looking forward to my day and future interactions. For me, kindness, respect, and trust are of the utmost importance when it comes to people I hire and work with. This might be one of those aha moments for you, too. If you find yourself miserable because you dread going to work each day because your boss is unkind, you might implement a rule like this.
Money rules are more than just figuring out how to put money in the bank and following your budgeting spreadsheet; they are also about creating the life you want to live. Your money rules might want to ensure that once everything is running smoothly according to your plan, you’re prioritizing family, loved ones, and your health.

Whether you like to believe it or not, money is a big part of a relationship. People have grown up on different money values and can see it very differently. Listen to episode 115 of my podcast to see how years of negative communication patterns around money can impact your marriage:

To avoid any conflict down the road, I made a commitment to be in alignment with Cassandra’s own money rules.

Have you noticed that my rules are more about saying yes than saying no? It’s not about depriving yourself of little luxuries. Your money rules are just as much about investing in yourself, especially when that investment can help you make even more money. There are no limits on earning potential. However, there is a limit on how much you can cut.

Remember, these are your rules catered to your unique interests, abilities, and lifestyle. And it’s OK to fall off the wagon and make mistakes. But always keep in mind that the real mistake is doing nothing. Anyone can make smart financial decisions with a solid, personalized plan that works for them.

Want to dive deeper into my 10 money rules? I break it all down for you in this YouTube video about Money Rules:
Financial well-being has been described as being your ‘second brain.’ This is because the financial stressors we deal with, such as money and banking, can have a major impact on our overall health and well-being. People who experience financial well-being are less stressed about money and this, in turn, has positive effects on their overall mental and physical health and on their relationships.
Financial literacy is the foundation of your relationship with money. It’s a lifelong journey of learning and discovering how you can best manage and spend your money. Read my existing post to learn more about financial literacy.
It’s one of the best things we’ve published, and totally free – just tell us where to send it:
Ramit’s best advice, straight to your inbox.