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 ground rules.

Rule one. Don’t borrow money for consumer goods. What are consumer goods? These are things that lose value over time. Things you want but can live without. Some examples are electronics, magazine subscriptions, car cell phones, etc.

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

rule three. Find out financially. This can only be done by reading as much as you can about the various investment options available to you. There really is no excuse not to keep 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 to put all their eggs in one basket only to find that the company they invested their money in has foundered. Prudent investors diversify. That is spreading your money across multiple companies to minimize your risk.

Rule five. Stay in 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 your way of thinking.

Rule six. Take responsibility for your own finances. Some people will ask 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 reaps the rewards when markets are up or takes a hit when they’re 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 from time to time, which means don’t panic when the markets are going down.

rule eight. Keep the big picture in mind. In other words, have a goal or target in mind. Are you saving for a house deposit or for your retirement?