Five commandments for a happy living

Money makes the world go round. Much of the happiness, as much of the distress, can be pinned to one root cause - the abundance or the dearth of money in life.
Interestingly, it is not difficult to have a gainful relationship with money and ensure comfortable living. Personal finance is not rocket science and can be mastered by keeping a tab on a few points. We have some suggestions that can keep you and your wallet happy and stress-free.
1. Thou shall spend less than thou earn
This, of course, is like stating the obvious. And yet most of the time distress in any financial plan can be pinned to just one cause: overspending. We often get swayed by flashier lifestyles or never-quenching aspirations. Therefore, to ward off any dangers lurking in the dark corners you should always think before you act and spend. This includes staying committed to the money in hand, and showing any attachment to the pay cheques of the future. Never spend the money before you have it. The best way to do so is by making a budget and obligating to it.
2. Thou shall pay thyself first
The conclusive step to the first commandment is to pay yourself first. As soon as you start earning, make it a habit to keep aside at least 8 to 10 per cent of your monthly pay cheque. If the base is smaller, you can start by staving off at least 5 per cent and gradually build up the habit of setting aside 10 per cent every month.
3. Keep thy commitments in check
Life's a breeze with easily accessible loans and lines of credit. There is one for almost any need (car, house, vacation, et al). Although the central bank has put a limit on debt-to-burden ratio and doesn't allow lenders to disburse more than 50 per cent of one's pay cheque as debt, personal finance experts suggest limiting the monthly instalments to one-third of the income.
4. Thy shall never pay interest or late fee
Make it a habit to honour all your commitments and bills in full, all the time. Whether we are talking of paying telephone bills or credit card debt, both should be equally respected and paid off without incurring an extra free or charge. It can save you thousands and go a long way in ensuring a stress-free living.
5. Thy shall save and invest
Once you start earning and saving 10 per cent monthly you can build up a contingency fund and gradually start investing. Always remember, saving is different from investing. Savings is a pool you can dip into when in need, and investments are more aligned with various short- and long-term life goals such as setting aside money for children's education, retirement, etc.
- suneeti@khaleejtimes.com