How to handle money: the four guidelines you must follow to become richer

"Everyone can start using these four money rules right now, and they could leave you better off in every way, from investing and pensions to daily money management," says Terry Tanaka

Although there is no easy way to know how to handle your finances, adopting a few basic money management practices can help you avoid debt, save enough for retirement, and accumulate wealth for your future aspirations.

These are my top four money management guidelines for investing, budgeting, and pension planning.

1. The Rule of 72 states that you should invest twice as much as you currently have

Despite the temptation, there is no use in attempting to time the market in order to generate sizable stock market gains.

The best and worst days are frequently very close together, so attempting to time your trades based on forecasts is extremely dangerous and could result in a quick loss of capital.

Pound cost averaging, which involves investing consistently each month to benefit from lows and enjoy highs, is the best approach.

To double your wealth, however, you should look at the Rule of 72, which helps you determine how much you would need to invest. Here's how it operates.

Calculate your investments' estimated rate of return. After that, divide 72 by this number. 728 = 9 if you anticipate an 8 percent return on your investment. It would take nine years to double your money at that rate of return, according to the rule of 72.

You can arrive there more quickly if your return is higher.

If you invested £10,000 at age 30, and your average return was 8%, you should have about £20,000 before you turn 40.

This rule also applies to cash savings, though it may take longer to reach your objectives as interest rates decline.

Originally proposed by mathematician Luca Pacioli in the 1400s, this rule is still widely used today to help understand the idea of wealth accumulation.

Of course, there will be ups and downs in investing, which is why it's critical that your strategy includes investing a fixed amount each month and continuing to do so even in the face of market turbulence, as was the case recently when Donald Trump's tariffs went into effect. Check out our live blog for the most recent information on the recent market turbulence.

2. The 50/30/20 budgeting rule

If you're concerned about running out of money every month, try following this rule. This budgeting principle, which divides your monthly income into different categories for saving and spending, is called the 50/30/20 rule.

This is the process.

You should budget half of your income for necessities like groceries, bills, and transportation expenses. Twenty percent is used for debt repayment, investments, and savings. Thirty percent of the money is spent on wants, which includes things like eating out, clothing, and other activities. You can change the rule, so if you want to save more, you might choose to fund investments or savings with 30% of your monthly income. It's up to you.

The 50/30/20 was first proposed by Elizabeth Warren, a US senator and professor.

3. The 4 percent pension rule allows for a comfortable retirement

When you retire, nobody wants to run out of money, and the 4 percent pension rule can help make sure you don't.

The plan is for you to take out just 4% of your pension in your first year of retirement, and then raise it annually at the same rate as inflation. The goal is to extend the life of your pension fund for a minimum of thirty years.

As you take out just enough to survive, your money can continue to grow if you have a sizeable amount still invested.

In the 1990s, a US financial planner named Willian Bengen came up with this concept.

However, as with any rule, make sure it suits you. You might withdraw more or less depending on your situation. 3 percent, according to Morningstar's analysis, is sufficient. However, you might choose to take out additional funds to cover unforeseen expenses or because you're experiencing health issues, for instance.

Fidelity's research, based on historical data, indicates that if you had a £100,000 pension fund in 2015, withdrew 4% of it, and then only withdrew at the rate of inflation, you would still have 189,000 left over after ten years, which is almost twice the initial amount.

In our article, "The 4 percent pension rule to retire comfortably," you can learn more about the 4 percent philosophy.

4. According to the half your age rule, how much should I put into a pension? If you haven't retired yet, you might be wondering how much money to put into a pension

For that, there is a rule as well.

Contributing half of your age to a pension is the basic idea here in order to build a comfortable retirement fund. If you are forty years of age or older, try to set aside twenty percent of your monthly income for a pension.

This might seem like a lot, but it should include any tax breaks and your employer's contribution.

Reaching your pension objectives is made easier the younger you begin receiving benefits.

This "average pension pot by age" guide will show you how much you have saved for your pension compared to your peers.