Mar 9, 2015
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Exceptions To Money Rules

Financial life always requires some rules and habits due to make right choices and beneficial financial investments. However not all the financial situations always need to make what you know to be right, sometimes you face some unique issues when you should behave differently. That is why here are some exceptions when you can miss the ordinary advice and succeed.

Rule#1: Return the debts and make an emergency fund first, only then save for the retirement.

It’s a good practice that you have the necessary amount of money to cover living expenses during 6 month. And this is the essential financial issue you need to make after all spending are covered. As well as you should always cover debts, such as UK payday loans online to avoid additional payments.

The exception: you might have long-term obligations such as student loan or a mortgage , and you can be proposed a good retirement plan at work. So it will be better to use an opportunity and choose the best retirement plan you can because it requires quick decision and early beginning of payments. So you can start making savings for retirement and then make other payments.

Exceptions To Money Rules

Rule#2: Your savings are about 10% of your income

It’s the old tradition that you can save 10% of your income without discomfort to your finance.

The exception: it can be not enough if you have not made any savings up to the age of 30. In such case you should save more money. To calculate the necessary amount you should think about the lifestyle you want to have when retired and then you will have the approximate numbers.

Rule#3: Increase the savings at once

If your income allows you to increase the money you contribute to your retirement plan, you will obviously make higher payments at once.

The exception: The plan of your employer can’t always correspond to the better plan for your own tax-management.

If any extra retirement plan is not available for you, it can be better to contribute just enough and have full advantage of a match (if you are offered). The extra money you have you can send to a saving account that will provide you with qualified and tax-free withdrawals on the retirement.

Rule#4: Invest in your children’s education.

Of course, you will earn more if you have a college degree. That is why it’s a normal practice that all parents try to provide their children with higher education.

The exception: if the regular payments for your children education exceed the possible amount of money you can spend, it’s better to think of the other possible way to help your children get the education.

During the first two years it’s better to study in a community college, so you can save more. Moreover the tuition costs are higher each year, so you should find all possible information that will help you spend less.

Rule#5: You can buy a house if the price is 2.5 times your annual income

When you think about purchasing a house, this is a normal calculation of the necessary income to cover regular payments for the mortgage.

The exception: you may have unique circumstances that don’t correspond to this rule.

It’s better to calculate the necessary payments you will have to make, such as taxes, insurance, mortgage payments, maintenance and other additional fees. And then you can understand if your income is enough to cover all spending.

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