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Like many rules, money rules are meant to be guidelines and not something to be strictly followed throughout your life. For example, a common money rule is the 50/30/20 budget rule. It recommends devoting 50% of your income to essential expenses, 30% to discretionary spending, and 20% to savings. However, while this rule may be helpful, it is not set in stone.
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According to famous money blogger, influencer, and self-proclaimed “financial activist” Dasha Kennedy, the key to successful money rules is adapting them to your financial situation.
“I cannot overstate the importance of creating financial rules that work for you,” Kennedy wrote in a recent Instagram post. “Personal finance is very personal. …We all have different triggers, needs, and preferences when it comes to managing money.”
Kennedy has four money rules to “keep sane,” which he shared in a post.
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Autopay $200 limit
To better manage large expenses, Kennedy doesn’t set bills over $200 on automatic payments. This gives you time to double-check before the charge is debited from your account, so you’re not caught by surprise, she said.
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“3 month rotation” rule
Kennedy rotates her monthly subscriptions every three months, switching between active ones and those she pauses or cancels. This gives you a chance to decide which ones are worth keeping and helps you avoid paying for too many subscriptions at once, she said.
She also mentioned a related “30-day unsubscribe” rule. If she has not used the subscription service in the past 30 days, she will cancel it. “There are no excuses or hesitations.”
“Deferred Upgrade” Rule
If a cell phone, laptop or other item breaks or becomes outdated, Kennedy waits 30 days before buying a new one.
“This gives you time to decide if you really need to replace it or if you can make do with what you have now,” she explained. “This saved us a lot of unnecessary upgrades and forced us to find creative ways to extend the life of our products.”
“Bill Split” Rule
This is especially useful for people who are on a tight budget and cannot afford high annual bills.
“I have no intention of paying a large annual bill with my current monthly income,” Kennedy wrote. “Instead, I save money in small amounts each month in a dedicated account.”
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By saving little by little over time, you’ll have money set aside and ready to pay big bills when they’re due, so big expenses won’t surprise you.
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This article originally appeared on GOBankingRates.com: Financial activist Dasha Kennedy’s 4 money rules to keep you sane
