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Everyone plans to live a healthy life. So, it makes sense why most people have a clean, healthy diet and exercise regularly. The same applies to finances. You must follow specific rules to stay in control of your finances while avoiding financial issues. Financial rules keep you in line by guiding your existence.

While December is often associated with activities, gifts, and entertainment, it is best to keep the amount of money you spend within your budget. A few savings tips for the holiday season and the Luke lango breakout trader investment tips can help you focus and live by the following money rules this December.

1. Avoid Taking Debt that You Can’t Afford

Debt can be complicated. But let’s face it! It is not necessarily bad. Debt can help build wealth while propelling you to realize your financial goals. But here is the thing. Taking on more debt beyond your capabilities is similar to inviting financial problems.

Do you have enough income to help cover the monthly debt repayment? Knowing your debt-to-income ratio is the quick answer to this question. Your DTI ratio is the percentage of your income responsible for repaying your debt. Suppose you earn $1000 and spend $500 servicing your loans. In that case, your DTI is at 50%. Strive to maintain a 35% DTI ratio or below.

2. Spend Less than your Earnings

Although December is a time to relax and have fun, you should remember that saving money aggressively and investing it is one of the quickest ways to become wealthy. And spending less than your gross monthly income ensures you save enough money for future use.

January is usually a tough and long month with many experiences. So, spend wisely to avoid disappointing experiences in January and the following months. The recommendation is to start by developing financial discipline.

3. Save First

Saving before spending is another financial rule you should live by this December. Pay yourself first by setting aside approximately 15% whenever a paycheck comes your way. That’s specifically for investing or saving. From there, you can budget how you plan to spend the remaining income.

Saving before spending offers control over your finances, thus keeping you financially stable. In other words, it teaches you how to live within your means. So, you won’t have to worry about wasting money on unnecessary purchases and debts throughout the month.

4. Where is Your Money Going?

Tracking your expenses is vital. In addition to ensuring you allocate your hard-earned dollars toward your financial goals, it also ensures you spend the money on main priorities. Tracking your expenses during this festive season requires you to develop good financial habits. Good financial habits work to your advantage by preventing you from overspending and ultimately give you the confidence of money well spent.

5. Be Creative When Planning Activities

Sometimes your budget gets tight during the holiday season. If that’s the case and you don’t want to miss the fun that comes with December celebrations, you can become creative in the activities you plan. For example, you don’t have to spend a fortune on decorations that you are more likely to forget. Instead, you can create something unique and cost-effective, like using flowers from your garden. Additionally, you can enjoy a simple picnic outside with family and friends.

Bottom Line

The 2022 December is different from the past two primarily because of the fewer public activity restrictions in most parts of the world. With most restrictions on population movement being scrapped, you can treat yourself and your family, which is part of enjoying your earnings. However, before taking a spa day or booking a tropical vacation, applying the above money rules is essential.