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.