We have rules about all sorts of things. Rules about food: “Eat only one serving of red meat each week.” Or “No caffeine after 6 pm.” Rules from school days: “Raise your hand to ask a question.” “No running in the hallways.” Those of us with children probably have lots of rules: “No television until homework is finished.” “No sweets until you’re done with your vegetables.”
Rules are designed to create structure and provide a framework for making decisions. We establish and follow rules because we’re confident they will make us healthier, safer, more productive and/or more successful.
Here is a critical question. Have you set rules for how you handle your money?
For most of us the idea of having rules about money is probably an entirely new concept. Some people may answer, “I have rules, because I have a budget,” and they would be partially right, as budgeting could be described as setting “rules” for how much money you intend to spend. But the idea of “money rules” as we define them goes far beyond budgeting; they can help establish the guidelines for your entire financial world.
To get started, try answering the following financial questions:
What do you consider acceptable uses for your credit cards? Do you pay your charges in full at the end of every month? How often do you balance your accounts—reconciling them with your bank statements? By what date each month do you pay your bills in order to ensure they are always on time? Do you put money into savings/investments accounts on a monthly basis? How much? Do you have a vacation fund?
It’s also important that you decide how to handle your money in relation to other people in your life. Are you willing to loan money to family members? How about friends? Knowing your answers to these questions in advance can help keep you from acting on your emotions or feeling pressured into making loans. This is not to suggest that you might decide to break one of your rules from time to time. But if you do, it will be a thoughtful decision.
Rather than being too strict, money rules can be beneficial for people in committed relationships. They provide you with a valuable opportunity to avoid many financial conflicts. What amount of money are you each responsible for contributing towards shared monthly expenses? Another example might be working together to decide in advance how much money each individual can spend without joint discussion and agreement.
Are you ready to commit to reaching your financial goals? Take the time to make a list of non-negotiable money rules you’re willing to follow, and then put these rules into action.
The Entertainment Community Fund offers a complete financial wellness program, free for everyone in performing arts and entertainment. We invite you to learn more and participate in our workshops, designed to support you in the implementation of a personalized financial plan of action. Learn more about our Financial Wellness Program.