Everyone manages their finances differently and what works for one person might not work for another. There’s no one-size-fits-all solution to mastering your money, but there are a few rules of thumb that can guide you through life.

It may go without saying, but your outgoings shouldn’t exceed your income. Spending more than you have can lead to unnecessary borrowing and debt.

Sometimes that’s easier said than done.

Life has a habit of throwing curveballs; just when you think your finances are on track, an unexpected event can throw everything out of balance. Creating a budget is an important foundation for keeping your spending within your means. This will make it clear what you have coming in (income) and what’s going out (spending) on a regular basis.

Your budget shouldn’t be rigid: life changes and so does your income and spending. Review yours regularly and whenever a big change happens, such as starting a new job or having a baby.

If you regularly find yourself spending more than your income, it could be time to cut back on unnecessary spending, explore other ways to reduce essential outgoings, or find a way to increase your income.

If overspending has to lead to debt, seek help to tackle it. Check where you can receive free debt advice.

When planning to pay off debt, doing it in the ‘right' order means you’ll do it in the most efficient way.

We often opt to clear debts with the lowest balance first as this can give us a good feeling. But tackling the most expensive first means you can reduce the cost and pay it off faster.

For instance, with a high-interest credit card balance, the more you can pay off every month the sooner your overall debt will decrease and more will go towards paying off the principal (the amount you actually borrowed) rather than interest charges.

Once you’ve cleared your most expensive debt you can move on to tackling the next one. You’ll still need to make the minimum payment requirements for any other debts you have while you do this.

The rule of paying off the most expensive debts first comes with some exceptions, however. You should always tackle the following first:

Usually, the interest charged on your debts will be higher than the interest earned on your savings, so it makes sense to pay off your debts first. In some cases, the difference between the interest you pay and earn can be very high, for example, with a credit card rate of 25% and a savings rate of only 1%.

It could be the case that the interest you earn on your savings is taxed too, making the difference even more pronounced. There may be some exceptions to paying off your debts before saving, for example, if a penalty would be incurred for doing so, or if you have a very cheap or even interest-free debt.

This is a popular rule for budgeting that helps you keep on top of spending and save for your future. Allocate your income (after tax) as follows:

A simple way to differentiate between wants and needs is to ask yourself whether going without something would affect your quality of life. Subscription TV is nice to have but it wouldn’t change your life if you cancel your contract, however not paying your electric bill is never advisable.

With loan repayments, such as a mortgage or a car loan, the minimum necessary monthly payments would be in the needs category. However, the 20% allocation for savings or debt could allow you to make extra payments to pay off the debt earlier before saving.

An emergency fund does what it says on the tin - it's a pot of money you can draw upon in an emergency, acting as a cushion when unforeseen events happen. But how much should you have?

It’s generally thought that a sensible emergency fund is an amount that covers three to six months of your basic living expenses. The amount that works for you can depend on other factors though like your income, lifestyle and obligations and you might find it more reassuring to have more in the bank to cover unexpected scenarios.

The money you save should be easily accessible and not locked into a financial product that doesn’t allow for instant access.

An unexpected pay rise, bonus or another windfall can easily be spent, either all at once or here and there through everyday spending leaving you with nothing to show for it at the end.

Treat yourself, but plan how to put the majority of it to better use - something that will move you closer to achieving your financial dreams and goals, for instance, paying off debt or saving for retirement.