SERIES: Fundamental Rules Of Money Management I
Welcome to a new series on the wildly popular JosephSangl.com! In this series, I will be sharing what I believe are Fundamental Rules Of Money Management. I look forward to reading your thoughts on this topic!
Rule #1 Make hay while the sun shines.
I was raised on a farm in Indiana, and one thing we learned was that we needed to make hay while the sun was shining. We knew that a time of famine was coming (winter) when there would be no fresh food to feed the livestock. This made it imperative that we cut the grass, dry it in the sun, bale it, and store it WHILE IT WAS AVAILABLE.
How does this relate to finances? I see some key similarities:
- There will almost always be a time of famine The job lay-off, an unexpected pay-cut, an unanticipated healthcare issue, or increased expenses can lead to financial famine – especially if one has not saved for such a famine.
- When you cut hay, more will grow to replace it If the grass is not cut, it will mature and die off. It will also prevent additional growth. If you cut the hay, it stimulates new growth. The same is true for finances. If you save some, it will lead to new financial growth!
- When you have plenty of hay saved up, it leads to confidence When you have an emergency fund of money saved up, it can help you take a few risks and not jeopardize your entire financial situation. You can absorb some costly expenses.
When you are in a period where you are making excellent money and life is good, it is time to save and store up for the future. Make hay while the sun shines.