If you know nothing about money, follow these four simple rules for the rest of your life

November is financial literacy month in Canada — not exactly a time for fireworks and family gatherings.

The importance of learning how to handle your money, however, is something you need to carry with you 365 days a year.

You don’t need to be good at math to use the tips below, and they apply to whatever your current financial position is today.

Consider these your North Stars of money management — advice you can follow the rest of your life:

Learn how to hang on to your money

Financially secure people have a knack for keeping the money they’ve earned for one simple reason: they’ve figured out that if they don’t pay themselves first, no one will.

So, before you go about spending your entire paycheque, hive off a portion off the top, on payday, for short- and long-term savings. Once that’s done, spend on everything else like housing, groceries, clothes, haircuts, mortgage, Netflix, etc., without accumulating debt.

This technique is also known as living within your means.

Budget and net worth tracking tools are most commonly used to enable this goal. Pick a spreadsheet template or app that’s easy to use which means avoiding complex systems. When you get the hang of keeping your money, you’ll have less stress — and more money.

Get the bad debt monkey off your back

Yes, there is good debt which is, surprisingly, OK to have. Examples include student loans, a mortgage, a loan for a profitable business — essentially if it’s used to build an asset that’s growing in value, it’s good debt.

If you’ve got consumer debt used for non-assets, that’s got to go, including car loans, lines of credit used for non-assets and credit card balances. Bad debt is expensive which is why you’ll want to wipe it out. Here are four methods to deal with it:

• Try to consolidate your balances into one lower interest rate loan or line of credit.

• If that doesn’t work, figure out a way to pay a bit extra on the highest interest balance every week. Once the first balance is cleared, pay extra on the next one, and so on until all the consumer debt is gone.

• Trim budget categories like entertainment to ensure 10 per cent of your take home pay goes toward debt reduction.

• Don’t stumble into more debt while paying off existing balances!

Reframe any negative self-talk into self-encouragement like, “I can get through this debt” or “I’m making financial progress every day and it feels great” or “I’m working hard to crush my debt.”

Prepare for a wonderful future — and a worst-case scenario

Your future self in retirement needs money to live. To prepare you’ll want to use tools like RRSPs, TFSAs and work pensions.

Most financial experts recommend that at least 10 per cent of your gross monthly income go toward your retirement. But, let’s face it, that’s a lot with high inflation and rising rates.

Start smaller if you need to, then grow your contributions over time, as you earn more. And, to understand the nuances between the tools and the investments that should go into each, you’ll want to meet with a financial adviser who will assess your income, your goals and risk comfort level.

A financial adviser will help put your money to work, so that it benefits from compounding interest and reinvested returns.

Equally important is saving for a worst-case scenario like a job loss, emergency travel or unexpected repairs.

It’s best to plan for a what-if scenario by saving a little bit in a high-interest savings account. When the worst happens, you’ll be ready, and this rainy day savings will keep you out of debt. I recommend nicknaming the account in your online banking to something like “emergency savings” or “what-if fund”, then automate weekly contributions into it.

Your money needs a mission

The secret to overcoming bad money habits, especially cycles of debt, is having a higher purpose for getting better with money in the first place. Is your goal to build financial security so you don’t have to worry anymore or a stronger retirement, or to give your family a better life?

When you have a true mission for your money, it offers motivation to stick with helpful daily money rituals like tracking spending, making contributions to your retirement accounts, and saving for a rainy day. It also helps you prioritize spending on what matters most to you.

A financial planner, money coach or experienced financial consultant can help paint a picture of your financial future through a plan. And, that plan is anchored to your money mission.

This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.