Break These 3 Personal Finance Rules

You have probably received financial advice since you got your first lawn mowing or babysitting job. Some rules have likely been repeated until you can recite them by heart, but that does not mean you should follow them all. Here are some traditional guidelines that you may be better off ignoring.

Never Use Short-term Loans

Car title loans and payday loans should never be used to fund foolish purchases. However, sometimes you are hit with a major, unexpected expense that you cannot cover with your cash on hand. In such cases, you should find an installment lender Mississippi rather than financing with credit cards. If you pay with a credit card and make minimum payments, the bill can take years to pay off and you may end up spending twice as much as the initial bill. Short-term loans have a shorter payback term, which usually results in a much lower total cost.

Save Six Months of Living Expenses

This is a nice goal, but many people find it impossible to achieve. The original idea was to prepare for prolonged joblessness. What most people really need is to prepare for unforeseen expenses. Your car may break down, you may get sick, your pet may need to see a veterinarian, or your home may need repairs. Tailor your fund to your situation. Start with $500 and aim to set aside another $500 for each vehicle, pet and family member living in your household. Add another $1000 if you own your home. That may not cover an extended period of unemployment, but it will give you peace of mind.

Share All Your Money With Your Spouse

In 2014, more than 40% of married couples indicated that they do not completely combine their finances; that percentage may be higher now. Have a shared account for household expenses, but keep some money separate. You should each be able to set aside approximately 10% of your earnings for individual pursuits. This is not about secrecy; it just means that you do not have to agree on how you spend every penny you earn.