10 Essential Rules for Personal Finance
published: capitals growths| jul 15, 2024
The Rule of 72: Divide 72 by your interest rate to estimate how many years it will take for your money to double.
The 50-30-20 Rule: Allocate 50% of your income to needs, 30% to wants, and 20% to savings and investments.
The 100 Minus Age Rule: Subtract your age from 100 to determine the percentage of your portfolio that should be in stocks.
The Emergency Fund Rule: Maintain a savings account with an amount equal to six months of your monthly expenses.
The 40% EMI Rule: Your total monthly loan EMIs should not exceed 40% of your monthly income.
The 20x Income Rule for Insurance: Your term insurance coverage should be at least 20 times your annual income.
The 1% Rule: When buying a home, ensure that the monthly rent is at least 1% of the purchase price.
The Debt Snowball Rule: Pay off debts starting from the smallest to largest to gain momentum.
The Budget Rule: Always have a budget to track your income and expenses, ensuring financial discipline.
The Retirement Savings Rule: Aim to save at least 25 times your annual expenses for a comfortable retirement.