You’re not me.

So I was reading the other day (Yes I do actually know how to read) and came across something profound. I’d like to share it with you now…

No one-size-fits-all recipe can guarantee a great relationship. Whether we’re talking about husband and wife, close friends, co-workers, or parent and child, every relationship is different. No two are ever exactly alike. What builds and sustains one is often of no value in another….

…..Each relationship has its own dance and drama, played out according to the unique strengths, needs, and personalities of the partners.

I think the author makes a valid point: What works for one person, might not work for another. Later in the chapter he goes on to discuss, that just because each person is different, that does not mean there are not fundamental rules in which we must all oblige. For example, don’t kill, steal from, or lie to each other. When these “ground rules” are broken, bad things happen.

Ready for the personal finance tie in? No two financial journeys are ever the same, but the ground rules apply to all. Sure there may be some disagreement in what is considered a fundamental financial principle, but here are mine…

1) Spend less than you make

2) Don’t accumulate debt (without a game plan to pay it off)

3) Have money set aside for a rainy day

If any one of these three financial principles are violated, you will almost surely face unnecessary hardships. Notice, though, that there is room for WHAT YOU WANT within each parameter. Sure you need to spend less than you make to have financial freedom, but it’s up to you how much less. Maybe it’s $50/month, $500/month, or more. You get to decide what works best for you.

Becoming financially secure is not about following a strict guideline, but more taking some basic principles and making them unique to your situation. We need to be more tolerant of our peers gameplans, unless their plans involve money, vodka, and a tiger.

I’m a pretty stubborn individual so it’s important for me to be reminded that my way is not the best way (although I will definitely try to argue that it is). What are some universal financial principles that you believe everyone must follow? Have you been stubborn, like myself, and become frustrated when people don’t do things “your way”?

10 thoughts on “You’re not me.

  1. Credit cards are not evil. Make them work for you. If you aren’t accruing cash back (or other rewards) and deferring payment for purchase by 30-60 days while you gain interest, then you’re missing out. Never carry a balance, ever.

  2. I become frustrated with my sister and her roller-coaster o’ debt; she is not one that likes to be told what to do (in any way, shape, or form), and when I see that there is something blatantly wrong and I try to give her advise on how she can correct it, her hand goes up, the “back off” comments start flying, and she gets really upset with me. We may be sisters, but we are probably 2 of the most different siblings you’ll ever meet. I’ve learned it’s best to just keep my mouth shut and let her deal with the fall-out on her own. She will always take someone else’s advice over mine, even if the other person tells her exactly the same thing I did; because so-and-so said it, the advice has some merit behind it.

  3. My one rule: learn how money really works, not how you “feel” it works or you’d like it to work. This way, you’re not tempted to do things like sell all your stocks when the market declines, or keep too much cash in low-interest savings, or jeopardize your cash flow in a panic to pay off low-interest debt (because you’ve bought in to the Dave Ramseyian myth that it’s a very bad, very wicked thing to have any debt of any kind).

  4. I think there are absolutely no hard and fast rules in personal finance and, accordingly, I try to be very respectful of other people’s decisions. I can think of situations for each of your three rules where they would not be the best course of action or a case could be made for another method.

    Why would you spend less than you earn if you were a retiree or someone who’s accumulated significant liquid savings?
    Debt can be a very effective for of leverage for some investments like rental properties. If the investment is cash-flow positive, paying off the debt may not matter.
    There are some people that advocate using all available cash to pay off debt if you’re in a stable financial situation otherwise since the debt is so expensive. No emergency fund.

    There are a lot of rules that are fabulous rules of thumb, but all will have exceptions. Finding what works for you and being tolerant are two rules that hold true always, I think 😉

  5. I totally agree with you when you say that we should be tolerant of other people’s game plans. As an entrepreneur I’ve found that most personal finance advice is geared towards 9-5ers that are pulling a steady paycheck and have 401k’s with employer matching, etc.

    To answer your question, I follow Ben Franklin’s advice, “There are two ways to increase your wealth. Increase your means or decrease your wants. The best is to do both at the same time.” I focus on trying to do most if not all of the following:

    1. Increase means:
    – Diversify income (job, side job, freelance, solopreneurship/ business ownership)
    – Diversify investments (
    – Focus on what works (reviewing the ROI of time, effort, and money used to increase means)
    2. Decrease wants:
    – Have gratitude for what I have (avoiding envy like the plague)
    – “Don’t be Marshmallow” (My take on Stoicism)
    – Monitoring my outgoing cash flow (I don’t follow a strict monthly budget)

  6. I’ve been debt free for a while now (except my mortgage…which I’m still working on). The tried and true principles that worked for me were:

    1 – Pay off all debt
    2 – Use ONLY cash (debit is ok)
    3 – Build Wealth

    One of the interesting but counter-intuitive pieces of advise I’ve received along the way was “Do not SAVE money and pay off debt at the same time” In other words… do one or the other… but not both. I really did work for me.

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