Thank you for ranking WECU’s 2021 Money Golden Rules!

WECU financial experts identified 10 of the most important money rules, and members helped us rank these rules from most important to least important.

More information about each rule can be found below.
Check out a special episode of WECU’s new podcast Money Flow, in which we talk through each of the money rules.

Spend

“Measure Yourself by Your Own Yardstick”

Do not try to keep up with the Joneses, they are stressed and in debt up to their eyeballs!

Humans are comparison machines: We compare our jobs; we compare our love lives; we compare our cars and our clothes. Some comparisons may be worthwhile. A lot are not. In the world of money management creating an “internal reference point” can ease your money worries.

What’s an “Internal reference point,” it is just fancy language for creating your own money goals, guidelines and rules based on your values- not your neighbor’s or co-workers. The best tool for developing your “own yardstick?” You guessed it, a budget.

“Things are not as Shiny the Next Day”

We must watch out for impulse purchases! Numerous studies have shown that sometimes our excitement about a purchase will not match how we will feel about the purchase just a few days later. Not a few of us have garages or storage units filled with regretful purchases!

Instead, buy for value. How can you tell if you have bought for value? You have researched the purchase. You have wanted it for a long time. You buy something of quality.

Now, having some “walking around money” or “fun money” is okay, but you just make sure it fits in your budget!

“Live BELOW Your Means. Period.”

If you are living a little outside of your means (spending more than you make), or just scraping by, you can adapt your spending, reach your financial goals, and still enjoy your life!

List some things you spend money on that are of high value to you- items that make your life better. These are your “no touch” expenses.

Now list a few things that are of less value. Can you cut any out? Alternatively, can you reduce how much you spend on them?

By cutting a few low value expenses, like calling to ask for a better rate (cable, insurance, cell phone…) you can save hundreds a month.

Save

“Pay Yourself First”

Pay Yourself First is one of the most well-known pieces of financial advice, and for good reason, it is super helpful.

Pay Yourself First does not mean getting your paycheck and then buying a new mountain bike and then crossing your fingers in hopes you can pay your bills and rent this month. Though, admittedly, it does sort of sound that way.

Pay Yourself First means right when you get your paycheck you put a portion into savings. Then, whatever is left of your paycheck you use to pay bills, pay rent and other living expenses. Make this a habit and in a little bit of time, you will have a nice savings built up.

“Save for a Rainy Day”

A Rainy-Day Fund or an “Emergency Fund” is A MUST! We like to believe there will be no emergencies, but life will prove us wrong. You will need new car tires, you will have your phone give up, you will get a speeding ticket or a medical bill. If you rely on borrowing money to pay for these items, you likely are paying high interest rates! This creates debt, which adds to stress. Instead, build and maintain a Rainy-Day Fund and enjoy the peace of mind.

Borrow

“Not all Debt is the Same”

Debt to purchase a house in a community you love, and will one day own, can be smart! After all, the alternative is paying rent and never owning a house.

Debt used to pay for dinner and drinks, a shopping spree, and a Las Vegas vacation might not be smart. Especially if you could not afford these luxuries otherwise. What is more, this type of debt is typically much more expensive (a higher interest rate) than the debt used to purchase a house.

Some things to think about when you decide if something is “worthwhile” debt: What is the interest rate? Is the loan for a want, or a need? Is the loan an investment: does it help you be more financially stable or well-off down the road?

“It’s Worth the Wait”

It can be hard to be patient. You might see something in a shop window or on an ad on TV and decide you just need to have it. But think about how much better you’ll feel if you can buy it without having to add expensive debt on your credit card. By waiting and saving up before buying, you could save a lot of money in interest costs, not create debt, and reduce money panic.

Even with bigger purchases, like a car, it is worth it to be saving up before buying. A down payment can mean thousands saved on costly interest.

Plan

“Aim for Progress, not Perfection”

Do not beat yourself up! Financial wellness is a lifelong journey. If you are in tough spot, being in a much better spot might be 2, 3, 4, 5… 10 years down the road. There will be setbacks and jumps forward.

But, if you plan and make goals, and consistently make small steps towards those goals, you can create a financial life that makes you proud and ready to enjoy the best parts of life!

“Your Biggest Investment is Yourself”

When WECU experts teach budgeting, we often ask the participants, “what is the most important part of a budget?” We get some good answers but then we share our opinion: it is income.

If you are making minimum wage with no retirement benefits and no healthcare benefits, no amount of budgeting tricks or advice will make it so you can save and have lots of fun money- especially in beautiful (and expensive) Whatcom County.

What can you do to get a raise? Have you even asked? Can you go back to school or get a professional certificate? Can you make money on the side or second job- even if it is for a short amount of time to kickstart your goals? People often focus on cutting expenses as the only way forward, for many, the focus should be on income.

“Money Can’t Buy Happiness; But A Balanced Budget Makes It Affordable.”

Research done by Nobel laureates has shown that the old saying “Money cannot buy happiness” is not quite right for most people.

Money is REALLY important, up to a point (to test this just ask someone who is broke and stressed). After that point, though, money doesn’t make much of a difference at all towards our happiness.

Stated differently, working toward a higher income – and limiting your expenses – so that you can feel safe and stable and optimistic for the future is how you maximize money’s impact on your happiness!

Want to hear more about Money Rules?

Check out this episode of Money Flow, a new podcast by WECU.