Pay yourself first is such simple advice, but so few people do this. The best investment decision you can make is setting a high savings rate because it gives you a huge margin of safety in life.

Saving is more important than investing

You have to have liquid assets to take care of things when life inevitably gets in the way.Most of the time these “emergencies” are things you should plan on happening periodically.

Build up that savings account

This is a huge personal finance margin of safety item. Just remember that insurance is about protecting wealth, not building it.

Cover your insurable needs

Carrying credit card debt is a great way to negatively compound your net worth.  But credit itself is important. Likely the biggest expense over your lifetime will be interest costs on your mortgage, car loans, student loans, etc. Having a solid credit score can save you tens of thousands of dollars by lowering your borrowing costs. So use credit cards, but always pay off the balance each month.

Credit cards

If you want to understand your priorities  gain control of your finances, look at where you spend money each month.The goal is to spend money on things that are important to you but cut back everywhere else. And if you pay yourself first you don’t have to worry about budgeting, you just spend whatever’s left over.

Understand your spending habits

....not within your means. The only way to get ahead financially is to stay behind your own earnings power.

Live below your means...

...instead of thinking about retirement. The goal shouldn’t be about making it to a certain age so you can ride off into the sunset, but rather getting to the point where you don’t have to worry about money anymore.

Think about financial independence

Everyone should have a back-of-the-envelope idea about where their net worth (assets – liabilities) stands. Before knowing where you want to go you have to know where you are.

Know where you stand

Saving and/or cutting back is a great way to get ahead, but it’s an incomplete strategy if you’re not trying to earn more by enhancing your career. Too many people are stuck in the mindset that there’s nothing they can do to get a better job, take on more responsibilities or earn a higher salary. That’s nonsense.

Make more money

Having a high salary does not automatically make you rich; having a low salary does not automatically make you poor.Your net worth is more important than how much money you make. It’s amazing how many people don’t realize this simple truth.  All that matters is how much you save out of your salary.

Salary is not the same as savings

Everyone should try to do their own taxes at least once just to understand how it all works. It can be maddeningly complicated, but it can help you save money over time if you know where to look. Take advantage of as many tax breaks as you can and always understand your personal tax situation.

Taxes matter

Meb Faber asked a bunch of us bloggers to give him our top 3-5 most read blog posts of the year. I looked back at my trusty Google Analytics for the first time in a while and discovered that two of my

Know where you stand

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Net Worth = Assets - Liabilities

The most important numbers to track

Your net worth