As we go through school, one of the subjects that desperately needs to be taught but is not is that of personal finance. Few people know how to establish a budget and even fewer know how to balance a checkbook. This is because they likely were never taught in school or by a relative or parent.

Not knowing how to manage your finances can lead to a number of financial issues and, even worse, unmanageable debt. But there are a number of things that you can to ensure that your financial standing is healthy and that you have things in control.

Follow the 50/30/20 Rule

“Budget” is a word that sounds restricting but it really is keeping your spending in line so that you don’t dig yourself in a hole that is difficult to get out of. The 50/30/20 rule states that you should put 50 percent of your income to necessities like rent/housing, utilities, internet from one of the Denver internet providers, or wherever it is you are, food, and transportation. Up to 30 percent should go towards things such as gifts, vacations, entertainment and other non-essentials. Finally, 20 percent should be set aside for an emergency fund, savings, paying off debts, and retirement.

This is a good rule to follow because it sets clear guidelines and helps you to not only pare down debt, but to save for the future as well. Too many people fly by the seat of their pants and spend whatever they spend, finding themselves without an emergency fund or savings for the future.

Investing Is the Way to Wealth

While saving your money is great, it is not the way to financial wealth. It can certainly leave you in a better position than if you lived paycheck to paycheck, but you can’t truly expand upon your personal wealth until you invest some of your money.

And we have a general vision in our head that this is through hitting it big on the stock market. While that’s possible, the best way to do this is through investing wisely and looking for slow, long-term gains as opposed to the quick score.

Investing in bonds, mutual funds, an assortment of stocks, and real estate can help you to establish your portfolio and to build it over time, setting you up for a much better and healthier financial future. But you can’t do this by pinching pennies and simply spending less money.