If your finances are a mess, the idea of getting your financial life together may seem a bit daunting.  No worries!

Fixing your money situation won’t be easy and it’ll take some hard work, but the concepts are actually quite simple.  Personal finance can be summarized in nine sentences.

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Live on less than you make.

The key to getting ahead financially is to live on less than you earn.  This seems so simple and obvious, but how many of us actually do this?

Most of us live on more than we make and we’re constantly in debt… between credit cards, student loans, car loans, mortgages, and other forms of debt, many Americans are drowning financially.

If we instead live below our means, we’ll be free of debt and we’ll have some extra money around to put toward savings.  This is how you can finally get ahead financially.

Save for emergencies.

Why are we so surprised when emergencies happen?  Things break.  Cars need repairs, homes need repairs, people get sick, pets get sick… I could go on.

Emergencies are not a surprise.  The only guarantee we have about emergencies is that they WILL happen.  That’s why it’s crucial to be prepared.

Dave Ramsey (and many other personal finance experts) recommend saving a small $1,000 emergency fund before you begin paying off debt.  Once you’re debt-free, he advises saving 3-6 months of expenses.

This money will be there to pay your bills in case you encounter a major emergency or get laid off from your job.  That way, you won’t have to resort to taking on more debt…which brings us to the next point.

Avoid debt.

Debt is bad.  Period.  The ONLY type of debt that can be considered a (somewhat) good debt is a mortgage.  This is considered “good” because the value of your home may increase over time and you can sell your home.  This is not the case with other types of debt.

Cars, for example, are a depreciating asset.  The second you drive your new car off the lot, it loses a huge portion of its value.  Taking out a loan for something that decreases in value over time doesn’t make a lot of sense.  You can sell your car at some point, but by then, it’ll be worth a lot less than it was when you purchased it.

Another example of “bad” debt is student loans.  People often want to call this type of debt “good” because a college degree (or an advanced degree) increases your earning potential.

Related: Why Student Loans are Not “Good” Debt

While that is (sometimes) true, student loans cannot be sold (like a house can) and student loans are nearly impossible to get rid of (unlike other forms of debt which can be discharged in bankruptcy).  I would argue that student loans are actually “bad” debt.

Avoiding debt as much as you possibly can is crucial for financial success.

Stop keeping up with the Joneses.

If you want to improve your financial situation, it’s time to stop keeping up with the Joneses.  “Comparisonitis” has become a huge problem thanks to social media.

When you scroll through your Facebook feed and see your friends going on amazing vacations and buying beautiful houses, it’s easy to feel dissatisfied with your own life…especially if you’re broke.

Remember that you’re comparing your behind the scenes life to someone else’s highlight reel.  Just because someone seems to “have it all” doesn’t mean that they do.  They might be burying themselves in debt to maintain their lifestyle.

You have the power to change your situation.

Many people want to blame others for their financial problems.  If that’s you, you may have some valid points, but fixating on blaming other people doesn’t serve you.  One example is with student loans.

While the cost of college in the U.S. is insane and something needs to change (note: I am not advocating for free college, but the cost needs to be more reasonable), focusing on how screwed up the system is doesn’t help you pay off your student loans.

Sitting around waiting for some politician to offer student loan forgiveness isn’t going to help you.  YOU need to take responsibility for your debt.  You decided to take on that debt, and now you can choose to pay it off.

Plan ahead for large purchases.

Credit cards have given us the ability to buy (almost) anything we want even if we don’t have the money for it.  We’ll just pay for it later…with a bunch of interest.

It’s crazy that we’re so comfortable with paying $200 to a credit card company every month, but we don’t even consider setting $200 aside each month to save up for a big purchase.

Planning ahead for large purchases allows us to buy items without paying a bunch of money in interest.  It also gives us the chance to learn how to be patient and delay gratification.  These are useful skills if you want to achieve financial freedom.

As Dave Ramsey says, “Children do what feels good.  Adults make a plan and stick to it.”

Start investing ASAP.

Anyone with student loans knows how awful compound interest is when you’re paying it.  In contrast, when you’re earning it, compound interest is a beautiful thing.

The more years you spend investing, the more time you’re giving your money to earn compound interest.

So, what if you can’t afford to invest?

If your company offers a match, I’d advise contributing enough to get the full match.  Find ways to cut costs or earn extra income so you can afford to invest.

If your organization doesn’t offer a match AND you’re focused on getting out of debt ASAP, it may be wise to hold off on investing.  As soon as you are debt-free, start investing!

Find ways to earn more.

Some people scrimp like crazy and are insanely frugal, but they’re still struggling financially.  If this is you, you have one of three problems:

  1. A debt problem
  2. An income problem
  3. Both a debt problem and an income problem

The best solution here is to earn more money.  Find a better job, ask for a raise, work overtime, get a second (or third job), start side hustling, use apps to earn extra cash….do whatever you can to increase your income.

Related: 10 Ways to Make an Extra $500 Per Month

“Live like no one else now so you can live like no one else later.”

This is my favorite Dave Ramsey quote because it sums up his teachings perfectly.

If you’re willing to do things that other people won’t do, later you can live like they’ll never be able to live.  While they’re buried in debt, you’ll have financial peace.

Isn’t that worth it?