The more credit cards you have, the more chances you have for identity theft and the more chances you have to miss a payment. The more investment accounts you have, the less attention you can give to each one and the more likely it is that you’ll miss a big problem.

Keep everything as simple as possible

...take care of your current situation.Your future self might have more income, but it’s also fairly likely that your future self might have less income and you’ll find yourself in a really bad situation. Even if your future self is doing well, there are probably going to be other big expenses that you’ll want to deal with at that time, like buying a house.

Don’t ever let your “future self”...

Whenever you’re tempted to splurge on something cheap, simply hold it in your hand for 10 seconds and ask yourself honestly whether you need it or not. Actively try to think of reasons why you shouldn’t buy this item. Will you really get enough value out of it to make it worth the cost?Usually, just 10 seconds will convince you that you don’t really need the item, and if something still passes the test, feel free to buy it!

The 10-second rule

<ul><li>Figure out how much you earned last year after taxes.</li><li>Subtract from that all of the costs of commuting, professional clothes, work-related meals, and other expenses you paid out of pocket.</li><li>Figure out how many hours you worked, plus the hours you commuted and attended other business meetings. </li><li>Divide your after-expenses income by your total hours of work to get your true hourly wage. </li></ul>

How much 1 hour of your time costs

<ul><li>Money in stocks, over the long term, tend to offer very good returns, but stocks tend to be very volatile, with lots of short-term jumps and falls in value. Hold on and be patient.</li><li>Shoot for the average by buying index funds with low fees.</li><li>Don’t bother with individual stocks: they require a ton of research and a lot of attention, and even then they come with a lot of risks.</li><li>Have some portion of your investments in an index fund made up of international stocks and other international investments (euro and the Chinese yuan).</li></ul>

Investing money in stocks

<ul><li>Building an emergency fund: set up an automatic weekly or monthly transfer from your checking account to your savings, then leave the savings alone until an emergency appears.</li><li>Eliminating high-interest debt: Set up a simple debt repayment plan by organizing your debts by interest rate, then attempt to make a double payment on whatever debt has the highest interest rate.</li><li>Saving for retirement: It will actually end up being a much smaller burden than you expect,  lifted up by the pleasure of knowing that you’re securing your retirement.</li></ul>

Focus on...

Rent unless your total monthly cost of home ownership is lower than renting.<div>It’s easy to get sold on the home ownership dream, but if it’s going to jack up your bills, it’s probably not a wise move.  </div>

Renting vs. home ownership

Cancel your unused memberships and subscriptions.Unused subscriptions and memberships do nothing but devour your money month after month.

Unused subscriptions

The most valuable part of budgeting is actually the process of building a budget correctly. You build a budget based on looking at your actual spending over the previous few months. Get real numbers, not estimates. Dig through your bank statements and credit card statements and figure it out. This will easily show you the areas where you actually overspend.

Build the right budget

For more expensive items simply choose to wait 30 days after your first serious impulse before buying the expensive item, provided that it’s not an essential or emergency need.Use that time to do a little research and make sure you actually want or will use the item, and also give it time to just sit there and see if the desire dies down. You’ll find that, more often than not, you won’t want the item after thirty days.

The 30-day rule

A while back, I was asked to give an hourlong presentation where I talked about my key principles of personal finance. I chose to give a presentation where each slide was available for about a minute with one simple rule on each slide, giving me a minute to discuss that rule.

How much 1 hour of your time costs

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