The rule of thirds in organizing your money

Sahl Sunday,03 Sep 2023

The rule of thirds in organizing your money

Money organization is crucial in an individual's and family's life. Managing money well contributes to achieving financial and economic stability and avoiding debt and financial problems. One effective way to organize money is the “rule of thirds” concept, which is based on distributing money into three main sections: spending, saving, and investing.

Spending (One-third of Money): This first part of the rule of thirds is important for meeting your daily and monthly needs. This part includes your basic expenses such as rent or housing, water and electricity bills, and food and clothing costs. You should allocate a third of your monthly funds to this section. To better organize your spending, it is a good idea to prepare a monthly budget that will help you keep track of how you are directing this part of the money.

Saving (one-third of money): This part comes after spending and represents an opportunity to secure your financial future. You should allocate one-third of your monthly funds to savings accounts or emergency funds. The goal here is to build financial insurance that can help you weather sudden financial hardships and achieve your big financial goals like buying a home or educating your children.

Investment (one-third of the money): This part is essential for increasing wealth and achieving profit in the long term. You can invest a third of your monthly money in a variety of financial assets such as stocks, bonds, and ETFs. You need to do research and learn about different investments and choose the option that suits your goals and level of investment planning.

It is also important to regularly monitor the performance of your investments and re-evaluate them when necessary. You may need to adjust your investment strategy over time based on changing goals and personal financial circumstances.

Bonus Section: Debt and Paying It Off: In addition to the three main sections, you should also consider dealing with debt. If you are in debt, you should set aside a portion of your gross income to pay off debts on a regular basis. Aim to pay off debts as quickly as possible to reduce interest costs and improve your credit history.

Prepare an accurate budget: To achieve the success of the rule of thirds, you must prepare an accurate budget that includes all of your income and expenses. This budget should be monthly and include all financial items, even small ones. By keeping a close eye on things, you can spot any waste or unnecessary costs and take action.

Direction and Motivation: It can be difficult to comply with the rule of thirds at times, but it is important to stay consistent and committed. You may need to coach and motivate yourself periodically to stick to specific financial allocations. You can also share your financial goals with your partner or close friend to help with equality and mutual motivation.

Continuous learning: The world of finance is always changing, so you must continue to learn and look for new investment opportunities and savings strategies. You can take advantage of books and online courses or speak with a professional financial advisor to get personalized advice.

Balance and Flexibility: Sometimes unforeseen circumstances may occur that require an adjustment in your financial allocations. You must be flexible and willing to adapt to these circumstances without deviating from the general direction you have set.

Professionalism and Consultation: In some cases, you may need to use financial professionals such as an accountant or financial advisor to help you better organize your finances and make informed financial decisions.

In short, the rule of thirds is an effective method for organizing money and achieving financial stability. Committing to distributing money between spending, saving, investing, and paying off debt will help you build a sustainable and successful financial future.

Periodic review and evaluation: Do not forget the importance of periodically reviewing and evaluating the rule of thirds. You can analyze the performance of your investments, budget, and debt records to ensure you're on track to achieve your financial goals. If adjustments are needed, you may need to adjust allocations based on new priorities or changes in financial conditions.

Establish an emergency fund: Avoid relying entirely on financial reserves in your monthly budget. Something unexpected can always happen, which is why you should set up an emergency fund that contains a specific amount that can be used to deal with financial emergencies such as injuries or damages at home.

Diversify investments: To reduce risks, you should rely on diversifying your investments. Don't put all your eggs in one basket. Search for various investment opportunities that suit your investment profile and financial goals.

Preparing for Retirement: If you have retirement plans, you should start planning them early. Open retirement accounts and invest in them regularly to ensure a sustainable financial life after retirement.

Develop saving habits: Develop saving habits that will help you boost savings. This may include reducing unnecessary expenses and looking for ways to increase revenue.

Maintaining purpose and patience: It is essential to maintain purpose and patience in the course of money organizing. You may face challenges or hardships, but staying committed to your financial goals will help you achieve them in the long run.

Consult a financial professional: If you are finding it difficult to manage your money or make sound financial decisions, you may need to consult a financial professional. An experienced financial advisor will help you analyze and plan your finances and suggest appropriate strategies.

Reducing costs: In addition to improving revenues, you can reduce your monthly costs by looking for ways to save in various aspects of your life. These measures may include reducing energy consumption at home, looking for offers and discounts when shopping, and reducing entertainment costs.

Invest in financial education: You may find it beneficial to invest in developing your financial skills. You can take online courses or read books about

Money management to increase your understanding and guide you towards sound financial decisions.

Save for big goals: If you have big financial goals like buying a house or financing your children's education, you should direct a portion of the money you set aside toward achieving those goals. Setting specific goals and allocating financial resources to them can be an additional motivation to achieve them.

Continuity in evaluation: The rule of thirds is not a fixed methodology, but rather requires periodic evaluation. You may need to adjust the proportions allocated to each section based on changes in your life and financial priorities. Feel free to make the necessary adjustments to better achieve your goals.

Resilience to challenges: You may face financial challenges from time to time, and you must be prepared to withstand them. The rule of thirds helps you build a strong financial foundation that can help you navigate these challenges with confidence.

Share knowledge: You may find it helpful to share financial knowledge with other individuals in your life, such as family and friends. You can share the tips and techniques you've learned with them to help them achieve similar financial stability.

Maintain psychological balance: Managing money can be a frustrating task at times. Therefore, you should pay special attention to maintaining psychological balance and mental health. Use relaxation techniques and rely on the support of friends and family to help cope with financial stress.

Tax Planning: Don't forget the role of taxes in organizing your finances. Learn about local and national tax laws and how to get the best out of them. There may be opportunities to reduce taxes through certain investments or taking advantage of tax credits.

Reduce Consumer Debt: Consumer debt such as credit cards can be very expensive due to high interest. You may need to reduce this debt quickly to improve your financial situation. Create a plan to systematically pay off debt and avoid adding more debt.

Assess overconsumption: Look at your spending habits and evaluate whether there is room to reduce overconsumption. You may find that there are some things that can be eliminated or used less frequently to save more money.

Maintain accurate records: Document all financial transactions and maintain accurate records of your income and expenses. This will enable you to periodically track your financial performance and discover patterns and opportunities for improvement.

Connect with a financial advisor: If you are having difficulty organizing your money or making difficult financial decisions, it may be a good idea to reach out to a financial advisor. They will have the experience and knowledge to help you develop a customized financial strategy that suits your individual goals and circumstances.

Maintain a long-term orientation: Don't forget the importance of a long-term vision for organizing your money. Look for opportunities that help you achieve long-term goals such as a comfortable retirement and long-term financial stability.

Dealing with financial winds and storms: Don't forget that financial fluctuations are normal. You have to be prepared to deal with the financial winds and whirlwinds over the years. Use periods of stability to move towards strengthening and strengthening your financial position.

Enjoying financial success: Finally, don't forget that the ultimate goal of money management is to enjoy financial success. Reward yourself from time to time when you achieve your financial goals and remind yourself of the importance of hard work and the right direction.

Dedicate time to strategic planning: You should devote regular time to strategic planning of your finances. You can select a specific day of the month to review your budget and search for new investment opportunities. This commitment to planning will help you achieve sustainable progress.

Evaluate goals regularly: Your financial goals can change over time, which is why you should evaluate them regularly and adjust them according to changes in your life and priorities. Do you have new goals that you would like to achieve? Do you need to reprioritize?

Learn from mistakes: If you have made financial mistakes in the past, do not lose hope. You can use these mistakes as an opportunity to learn and improve your financial strategies in the future. Mistakes can be part of the learning and financial growth process.

Leverage financial assets: If you own financial assets such as real estate or stocks, you should consider how to best use them to achieve your financial goals. These assets can be a source of revenue or an opportunity for financial growth.

Negotiating and bargaining: Do not hesitate to negotiate and bargain when making large purchases or when dealing with financial service providers. You may have opportunities to get better deals or discounts on interest on debt.

Allocate for monthly flushes: Some months, you may experience additional financial stress such as unexpected medical costs or home repairs. You should allocate a portion of your savings to deal with these downturns without negatively impacting your basic money planning plan.

Continue to learn and grow: The world of finance is ever-changing, so you must continue to learn and improve your financial knowledge. Connect with money professionals and attend financial workshops to increase your understanding and expand your knowledge.

Share success with family and friends: When you achieve financial success, do not hesitate to share the joy and knowledge with family and friends. Your story may inspire someone and motivate them to achieve their financial goals as well.

Ultimately, the rule of thirds is a comprehensive framework that helps you organize your money and achieve financial stability. Always remind yourself of the importance of commitment and dedication to these guidelines to achieve sustainable financial success and financial well-being in the long term.