The financial legacy my father taught me
Throughout my career as an entrepreneur, I’ve made mistakes—it’s inevitable when building something from scratch. However, if there’s one aspect where I’ve always had clarity, it’s in the financial organization of my projects. This advantage has helped me become the businessman I am today.
From childhood, I was fortunate to learn the value of money from someone who understood it better than anyone: my father. As a banker for over 30 years, he taught me that financial success isn’t about accumulating money or having a lot of it—it’s about managing it intelligently. He instilled in me the importance of saving, planning, and patience, principles that have been fundamental in every business I’ve built. Thank you, father.
Today, after decades of experience, I continue applying these lessons in my life and in my companies, so I want to share them with you. I won’t confuse you with complicated formulas or unattainable strategies. These are simple rules that have withstood the test of time and can transform your relationship with money.
Here are my 8 rules for saving money, a set of principles that have strengthened my finances and given me the freedom to build with security, grow with vision, and help others along the way.
Rule 1: The 50/30/20 – The Perfect Balance
Origin: This rule was popularized by Elizabeth Warren (yes, the U.S. Senator) and her daughter Amelia Warren Tyagi in their 2006 book “All Your Worth.” However, its roots trace back to ancient principles of household management that have existed for centuries.
When I implemented this rule in my life, it made sense.
My experience: By dividing my income into 50% for needs, 30% for wants, and 20% for savings, I discovered figures that actually work. I no longer constantly questioned whether I could afford something extra. I had clear limits that, paradoxically, gave me more freedom.
Although this rule originally talks about 20% for savings, I invite you to raise that goal to 30%, especially when you’re young. Financial education and understanding the value of saving should start early because it’s the time when you have the fewest obligations, so you can allocate a bit more percentage for savings. My father always told me that it was at that moment, in my adolescence, that I should save as much as possible because later I would have obligations that would make the budget a bit tighter. And of course, when you’re young, you don’t think about mortgage payments, credit cards, or supporting a family, so it makes sense.
Today, I maintain that goal of 30%, and yes, sometimes there are unexpected expenses that can make it difficult to meet that percentage, but it’s the ideal saving target.
I once gave up a trip I fully intended to go on just to keep my 30% savings intact. Six months later, with the pandemic, that fund I had protected allowed us to help others.
Rule 2: Couple’s Budget
The key to financial success as a couple isn’t in the total money earned, it’s in knowing how to manage it together.
When I got married, I knew we needed to establish a budget because the idea is to build together, to have a clear financial plan that would give us stability, freedom, and transparency. This is how what I now call the Couple’s Budget Rule was born, a system that avoids unnecessary arguments about money and, above all, prevents financial infidelity.
How it works: The 3+1 Accounts Method
Instead of handling money individually and facing uncomfortable surprises at the end of the month, we created a model based on four bank accounts:
- Master Account (Family): All income from both partners goes here, and common household expenses are paid from this account (mortgage, utilities, groceries, education, insurance, etc.). It represents 50% of the total income, aligning with the 50/30/20 Rule. From the Master Account, transfers are made to the rest of the accounts.
- Personal Account for each spouse: Each person receives an automatic monthly transfer for personal expenses or wants. This money is completely free to use, without questioning. If you want to spend it on specialty coffee or gadgets, it’s your decision! It represents 30% of the total income (15% for each person).
- Investment/Savings Account: 20% of the total income goes directly to an investment or savings account to guarantee the family’s financial future. This is where the true building of wealth lies.
Why it works:
- It prevents financial infidelity. There are no hidden expenses or surprises.
- It reduces arguments about money. Each person has their personal budget without needing to justify how they use it.
- It facilitates planning. Household finances are organized, ensuring stability and growth.
- It strengthens the relationship. Trust is built, expectations are aligned, and misunderstandings are avoided.
Money is one of the main causes of conflict in couples. But when there’s a clear, transparent, and fair system, finances stop being a source of stress and become a tool for building together.
Extra advice: Review your budget every six months and adjust if necessary. Flexibility is key to adapting to new circumstances without sacrificing financial stability.
If I had to give just one financial piece of advice for couples today, it would be this.
Rule 3: The Rule of 72
Origin: This mathematical formula has deep roots in financial history. Although many erroneously attribute it to Albert Einstein, it actually appears in Italian mathematics texts dating back to the 15th century. Luca Pacioli, the father of modern accounting, mentioned it in his work “Summa de Arithmetica” from 1494.
My experience: When I understood that by dividing 72 by the annual interest rate, I could calculate the years needed to double my investment, my perspective changed. I no longer sought immediate gains; I began to appreciate the power of time as an investment.
It’s interesting how this ancient rule remains relevant today. I applied it to my first investments in technology, and it gave me the patience necessary to let money work for me, instead of working for money.
Rule 4: The 1% Rule for Impulse Purchases
Origin: This rule doesn’t have a single identifiable creator, but it emerges from behavioral economics studies of the last 30 years. Researchers like Daniel Kahneman (Nobel Prize in Economics) have demonstrated how our brain has two systems of thinking, and how a simple pause can activate the more rational system.
My experience: Implementing this rule was a lifesaver for my personal and business finances. If something cost more than 1% of my annual income, I forced myself to wait 3 days before buying it.
You’d be surprised how many “urgent needs” vanish after 72 hours of reflection. From office equipment to “indispensable” software, this rule has saved me thousands of dollars in impulse purchases that would have ended up as unnecessary expenses.
Rule 5: The 401(k) Match
Origin: Employer-contributed retirement plans formally emerged in U.S. legislation in 1978, but the concept of shared savings for old age dates back to medieval guilds, where members contributed to common funds to help older artisans.
This plan is an investment account offered by some companies to help their employees save for retirement. One of the easiest ways to contribute more is to automate the process. Some 401(k) plans allow you to specify automatic and periodic increases to your contributions. This system benefits employees and creates a culture of foresight and long-term commitment that significantly reduces staff turnover.
Rule 6: The 3X-6X Emergency Fund
Origin: This principle has been promoted by generations of financial advisors, from Benjamin Graham (Warren Buffett’s mentor) to modern financial educators like Suze Orman and Dave Ramsey. However, its conceptual roots are found in ancient agricultural practices of storing grain for times of scarcity.
My experience: Building a fund that covered 6 months of expenses seemed impossible at first. I started with a more modest goal: one month. Then two. After three years, I had reached my goal of six months. The idea is to have savings equivalent to between 3 to 6 months of your salary.
The 2008 economic crisis hit Puerto Rico hard, and many businesses closed. My emergency fund gave us the peace of mind to make strategic decisions instead of reacting out of panic. We were able to keep our entire team while many companies were forced to cut staff.
Rule 7: The Automation Rule
Origin: This modern concept emerged with the digital banking revolution of the 90s, but the philosophy behind it comes from an ancient proverb: “Pay yourself first.” It was popularized by authors like David Bach in “The Automatic Millionaire” and Ramit Sethi in “I Will Teach You to Be Rich.”
My experience: Automation transforms finances. By setting up automatic transfers, money disappeared from my checking account before I could spend it.
Eventually, I stopped noticing those transfers. My lifestyle naturally adapted to living with “less,” while my wealth grew. The most effective discipline turned out to be the one that didn’t require daily willpower.
Rule 8: Item In, Item Out
Origin: This principle has roots in Japanese minimalism and was popularized in the West by authors like Marie Kondo and Joshua Becker. However, the idea of maintaining balance in personal possessions exists in many philosophical traditions, from Roman Stoicism to Zen Buddhism.
My experience: This seemingly simple rule has had an impact on my physical space and my finances. By forcing myself to get rid of something every time I acquire something new, I’ve developed a natural filter against consumerism.
This practice generates a domino effect: more orderly spaces lead to a clearer mind, which results in better financial decisions. And the act of regularly donating has connected me with a sense of abundance and gratitude that no purchase can provide.
The Legacy We Build
These eight rules aren’t just financial tips; they’re life philosophies that have passed from generation to generation, adapting and evolving over time. They weren’t created by a single financial genius but polished through centuries of collective wisdom.
What makes these rules so powerful isn’t their complexity, but their simplicity. They don’t require advanced financial knowledge or large initial sums. They only need consistency and patience.
Whenever I share these rules with entrepreneurs who are just starting out, I remind them that true wealth isn’t built with spectacular moves or risky investments. It’s built with solid decisions, repeated day after day, year after year.
My greatest satisfaction hasn’t been seeing my wealth grow, but knowing that I’m building a legacy of financial intelligence that transcends the material. A legacy that allows my family, my team, and my community to thrive even in times of uncertainty.
Are you ready to begin your own financial legacy? Start with one of these rules, perhaps the one you consider easiest, and observe how small, consistent changes can transform your context.
Remember: financial freedom isn’t a destination; it’s a journey. And every conscious decision is a step in the right direction.
To close this blog, I have a gift for you, something that will help you plan and clearly manage your budget—a spreadsheet that will help you track, understand the value of things, and see, based on figures, what changes you need to make to adapt the rules in your favor.
I invite you to download this Excel budget document so you can adapt it and have control over your income and expenses.
Let me know what you think.
Carlos Cobián
