10 Rules of Money Management

You may want the latest techno-gadgets and a yacht. However, your needs are little more than food, clothing and shelter. Good financial management helps you get the goodies when you can afford them. Don't confuse your lusts with needs.

Live below your income. Your financial reality is the balance in your wallet and your bank accounts, not the limit on your credit cards.

When you're dead broke, a $500 auto repair is a disaster. Build up an emergency fund of at least $1,000 to handle unexpected bills. Financial pundit Dave Ramsey suggests eventually building your savings to three to six months of basic living expenses.

If "budget" is a nasty word in your house, call it a plan. Add up your real monthly gross income. Then add up the deductions for taxes, insurance and so on, and subtract the total from the gross to find your net income. List and total all your fixed and variable expenses. If the outgo is more than the income, you have cutting to do. Keep accurate records in your checkbook or computer to stay on track.

Cut spending on large and small items to fund your goals. Find lower rent and trade in your vanity vehicle for a cheap car that runs well. Carry coffee and lunch from home. Eliminate ego from the equation and find bargains on used merchandise.

Plan to save every month. Workers with the largest retirement accounts are not higher earners, as personal finance expert Suze Orman states. They simply pay themselves first. Automate monthly transfers to emergency savings, investment accounts and retirement accounts.

Don't let debt become a nightmare. The Foundation for Credit Education Inc. recommends keeping nonmortgage debt at less than 20 percent of net income. Including the mortgage, keep it under 40 percent.

Get the monkey permanently off your back. Pay down and pay off debt, as Dave Ramsey recommends. Using Ramsey's debt snowball, list every debt you owe, smallest to largest. Practice strict frugality to free up mega-cash and put extra money on the smallest debt each month, while making minimum payments on the other debts. When that debt is paid off, work on the next largest and so on. Finally, pay off the mortgage.

Set financial goals with your partner for the short and long term. Put them and a plan to meet them in writing. For example, save for a dream vacation, pay off the mortgage, save for retirement and build wealth.

Have fun with your money but don't hoard. True wealth brings the responsibility to share, as Suze Orman states. Giving is an American tradition from Andrew Carnegie to Bill Gates. Some couples even put it first by giving 10 percent to charity.