by Angela Diggs

Created on: November 05, 2008   Last Updated: January 29, 2009

There are essential money rules for each individual to live by. Most people know how to spend and earn money. They know how to increase their earning potential. Most of us know what our parents told us day after day. " Go to college so you can get a high paying job." " Work hard and save your money."

This was the extent of the conversation. They never taught us about investing or leveraging. Most of us did not know their was any such thing as good debt and bad debt. Our parents could not teach us what they did not know themselves. We grew up learning to work hard for our money. They were right, but there is more to cash than earning and saving it. Money can work as hard for us as we do for it. Their are essential cash rules to live by. Below, these guidelines should help you make the most of what you have.

1) PAY YOURSELF FIRST.

Pay yourself first. Take 10% of your income and give it to yourself. Do this consistently every time you get paid. You are your most important asset. It makes sense to pay yourself for working hard. You earned it. Put the 10% in a personal savings account.

2) SAVE UP A ONE YEAR EMERGENCY FUND.

Start saving up a one year reserve. This is important just in case you happen to lose your job. Put this in a savings account. This money should be enough to carry through tough times.

3) LIVE WITHIN YOUR MEANS

Refrain from spending more than you have. If you make $3,000 a month, do not spend $4,000. Live within your means. The most important things you have are food, clothing and shelter. Once those are covered, you are in good shape. Everything else is a want not a need.

4) GET ON A BUDGET.

Find out how much you make a month and tally up your expenses. If your expenses are more than your income. You must adjust your income to cover your expenses. Get a money coach to help you map out how much money should go to rent, mortgage and food. It helps to right down your largest expense and go down to the smallest.

5) WRITE IT DOWN.

Keep a written record of every dime you spend. If you purchase a pack of gum, record that too. It helps to see where your money is going. Make sure to keep the receipts as well. Try not to miss a day.

6) CONSTRUCT THREE PIGGY BANKS.

Make three separate piggy banks. Label one SAVINGS, one CHARITY and the other INVESTMENTS. Every morning, put at least 1.00 in each of these. DO this every day. At the end of the month transfer your liquid savings to a high yield savings account. Transfer your charity money to a church cause. Put your investment

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