1. KEEP THY BUDGET HOLY

The lack of financial discipline is the reason why these 10 commandments are necessary.

Living within your means is hard to do when you confuse the difference between wants and needs. Everyone should create a budget. Personally, I use an Excel sheet every month, using the 60-30-10 rule.

The rule states:

o 60% of your income should go towards fixed costs: rent, food, utilities and transportation.

o 30% of your income should go towards your financial independence: savings, investments, emergency fund, and retirement.

o 10% of your income should be for discretionary spending: vacation and entertainment.

2. THOU SHALT BE SENSIBLE WITH CREDIT CARDS

Credit cards can be great or your worst nightmare. Without caution credit cards can put you in debt in no time, leaving you wondering, “How?”

Therefore, never let your credit card limit be more than your pay cheque.

Another fatal mistake is only paying the minimum balance on your credit card. It’s like you’re begging the bank to take your money. And let’s have a round of applause for the people who take out several credit cards to pay other credit cards off; it’s like one big game of musical chairs, it’s fun until the music stops.

3. WOE UNTO YOU, CO-SIGNERS OF LOANS!

Every now and again, a friend or family member may ask you to co-sign on a loan; sometimes it works out, but quite often it doesn’t. Then you’ll get that dreadful phone call telling you that it is now your responsibility to pay back his or her debt.

A general rule of thumb: If it is a hassle to get your money back whenever they borrow from you, DO NOT CO-SIGN.

4. BLESSED IS THE MAN WHO HAS AN EMERGENCY SAVINGS ACCOUNT

Do not be derailed by unexpected expenses. Therefore, it is absolutely necessary to have at least three months’ living expenses. I would advise you not to even have an ATM card or cheque book for this account; that way you will not be tempted to spend for a so called “emergency”.

5. INVEST IN THYSELF FIRST

Now before you jump for joy thinking that this point is about spending on yourself before paying the bills, calm down. Whether it’s your first, second or tenth job, planning for retirement is essential. This should be separate and apart from what your company provides. Investments are great facilitators of retirement plans. With the utilisation of bonds, preference shares and defensive equity stocks, you can be on your way to preserving your wealth for the future.

6. THOU SHALT NOT BE NAIVE ABOUT WORLD AFFAIRS

Everything is interconnected. The wars in the Middle East, natural disasters, US elections, Brexit – they all affect you. Have you heard the saying, “When America catches a cold, Jamaica catches the flu” ?

Oil, food, medication, the general cost of living changes when events like those listed occur. Being aware can allow you to make better decisions about your finances; for example – when to hedge using another currency, when to sell the gains from your investments or when to exit a bond due to high country risk.

7. BLESSED ARE THOSE WHO REFINANCE, FOR THEY SHALL INHERIT MONEY

Refinancing simply means to finance something again, usually for a lower interest rate.

What was good for you five years ago may not make financial sense today. Market conditions are always changing, and so should you. It would be wise to shop around to different financial institutions to see which provides the best options that won’t bleed your wallet dry.

8. THOU SHALT NOT OVERSPEND

Sounds simple enough. Generally, people tend to overspend when going through emotional times; a break-up, disappointment, mourning the loss of someone. This overindulgence provides short-term relief but can often lead to a personal financial crisis, because you have now created an unnecessary debt.

9. THOU SHALT NOT PUT THYSELF IN DEBT FOR THE SAKE OF KEEPING UP WITH THY NEIGHBOURS

Have you seen the show “Keeping up Appearances”? The show revolves around a neurotic English lady named Hyacinth Bucket, who spends all her time projecting her prim and proper, fancy lifestyle to others while hiding her not so fancy family.

This is relevant today. Far too many people are living beyond their means because they have to show everyone how fabulous their life is, to be a participant in an unspoken competition. Be aware of your financial limits!

10. BE AWARE OF GET-RICH-QUICK SCHEMES

If it sounds too good to be true, it probably is. If you get an offer which promises an extremely high rate of return on your money in no time– red flag! Of course it sounds nice, but it’s oftentimes a scam and you will lose your hard-earned money. Most wealthy peopler didn’t get that way with get-rich-quick schemes.

Kelley Reid, Fund Administrator & Analyst at Stocks and Securities Ltd.