The Conservatism Principle actually is a guideline used in financial accounting when recording transactions on the company’s books. But after learning about this principle, I could see how this can and should be used in personal money management as well.
Too many people spend money they haven’t earned, to buy things they don’t need, to impress people they don’t even like.
The Golden Rule of Finance is one that makes a tremendous amount of sense to many, but only a few truly know how to apply it. The above mentioned quote by Will Rogers hits the nail right on the head as it is a great explanation why people cannot live up to the Golden Rule. Here is how it goes: