Money plays an important role in our daily lives and making the most of what we have will help us live a life free from financial pressure. By learning a few basic rules, you can make life easier for yourself and those who depend on you. Here are my basic rules.

Rule one. Don’t borrow money for consumables. What are consumable goods? They are things that lose value over time. Things you want but can live without. Some examples are electronics, magazine subscriptions, automotive mobiles, etc.

Rule two. Live within your means. In other words, spend less than you earn. I know it may sound difficult if you are on a tight budget, but simply taking easy credit when it is available to you is simply an invitation to financial disaster.

Rule three Become financially educated. This can only be done by reading everything you can about the various investment options available to you. There really is no excuse for not keeping up with all the financial news because there is so much information on financial matters available online and offline.

Rule four. To diversify. One mistake some investors have made in the past is putting all their eggs in one basket and finding out that the company they invested their money in went bust. Careful investors diversify. That is spreading your money across multiple companies to minimize your risk.

Rule five. Keep good company. There are people who have bad attitudes towards financial planning and money in general, and if you spend too much time with these people, those attitudes can affect the way you think.

Rule six. Take responsibility for your own finances. Some people turn to others for advice just to have someone to blame if things don’t go their way. A financial advisor will tell you to do this or that, but at the end of the day it’s your money and you’re the one who gets the rewards when markets go up or take a hit when they go down.

Rule seven. Take a long-term view of your investments. Investing your savings is a long-term game, and to take advantage of the gains in the markets, you need to take a hit every now and then, which means not panicking when the markets turn down.

Rule eight. Consider the big picture. In other words, have a goal or objective in mind. Saving for a house deposit or for your retirement?