The economic indicators analysts don’t talk about.

As the economy continues in its recession, I am actually asked this question quite a lot:
What is the #1 rule of personal finance?
The answer, as some of you might imagine, is not particlularly deep or earth-shatteringly insightful:
Spend less than you earn (or earn more than you spend).
This basic credo is, in fact, the basis for all good personal finance decisions. It is the foundation of making the right choices down the line, and the catalyst that helps people learn to prioritize their spending. This rule is expressed in two different ways:

Limiting your expenses so that they do not exceed your …read more

If your household’s lifestyle pushes you to keep spending income several months into the future (i.e., live beyond your means and rely heavily on credit cards), it is time to take stock of your expenses.
List down all your expenses. Be absolutely honest and categorize them into:
(a) necessary
(b) can be spent if there’s money left after paying for necessary expenses
(c) luxury
(d) keeping up with the Joneses.
Obviously, the best move is to stop spending at Category (a).
image from Microsoft Clipart