When it comes to finance hearing one-liners that encapsulate a strategy or a philosophy to support your own financial dreams and aspirations can be motivational, inspirational even, especially at Christmas time!

John Lowe the Money Doctor takes a look at his top five financial rules to live by this Christmas.

1.  You need a budget and you need to budget
You generally should start the new year with a budget plan. To know how much it costs you to run you and your family for a month...every month.

Any surplus goes to a saving plan to coincide with your goals and longer-term plans. If you have no plan, then even to plan for the season ahead will be a start – in this case, Christmas.

Bundle all your presents costs, the extras (tree, decorations, cards etc) plus your food and drink not forgetting entertainment. The total is the amount of money you are going to spend – where are you getting this from?

If borrowing how are you going to repay? Important to know how much you need and where you are getting it from if you haven't saved it. Christmas comes around every year so why not start a new plan in January…a new budget incorporating next Christmas.

Christmas budget
Be sure to make a budget this Christmas

2.  Never spend on impulse
How often have I done this – you have an empty shopping trolley and you are wandering around aimlessly instead of sticking to a list... of course, you are going to be tempted that’s why you should never shop on impulse.

If you have a list, you might be able to gauge what the total cost will be and just bring that amount of cash with you or do not exceed that amount on your debit or credit card...it takes discipline.

3.  Your financial life rests on the gap between your income and expenses
Income is your number one asset and it has to cover everything both now and in the future. That gap between your expenses and what you earn is crucial especially if it is a surplus. It is with this surplus amount of money you can plan.

Planning for your holidays, that lump sum to repay the Personal Contract Plan (PCP) for your car, your child’s 3rd level (total cost exceeds €42,000 per child) that attic conversion, that once in a lifetime Christmas trip to see Santa, not to mention that home deposit... the list goes on.

All those items of expenditure are paid from the gap between your income and your current living costs. So start saving.

Christmas presents
Christmas presents are paid for by the gap between your income and current living costs

4.  Every euro should have a purpose
If you don’t have that purpose for your money, then it’s up for grabs and God knows where you will end up spending it.

It is important therefore to check that list – not just your grocery list – and ensure your money is going to the right place.

5.  Bet big when the odds are in your favour
Well, that’s what they say in betting circles. I am not a gambler but there are certain factors I do take on board when it comes to betting big especially on the stock market…

  1. The stock market is easily the best return of any asset class over any period of time.
  2. We are in the 26th Bull market (rising) – there are 25 Bear markets so the next one is a Bear…
  3. The current Bull is the 2nd longest of all time and in its 9th year (since March 2009  - the longest was 1987 to 2000 - 13 years halted by the dotcom bubble burst.)
  4. To become a Bear market (falling) the Bull has to fall by over 20%.
  5. With interest rates so low and no immediate likelihood of a rise in the next 15 months, it could be assumed the stock market will continue to rise and at worst, stay where it is. Unless…
  6. If you do want to preserve and grow your wealth, remember Warren Buffet’s wise words – the stock market is a mechanism for transferring wealth from the impatient to the patient.

For more information click on John Lowe's profile above or on his website.