50 money rules up for re-evaluation

Personal finance advice boomed back when the internet did. But the world has changed dramatically since the Dot-com era — and even more so following the COVID-19 pandemic — making many old-school and new-school money rules seem out of touch, out of nuance, out of pocket, or simply outdated.

Here are 50 money rules that have come up for re-evaluation in some way, shape, or form recently, along with an explanation of why, to help put financial wellness in 2025 and beyond into perspective.

1. Bank three-to-six months of emergency savings

The goalposts on what constitutes an adequate emergency savings fund are moving, thanks to economic uncertainty, inflation, and longer stretches of unemployment.

Experts now recommend having 12 to 24 months (!) worth of expenses socked away for rainy days.

2. Cash is king

Having said that, many experts agree that, these days, Americans with some semblance of a financial portfolio tend to keep too much in liquid savings, especially given even high-yield savings accounts offer paltry returns.

Once you have an adequate emergency savings fund, consider auto-rolling funds into a low-risk investment account, like short-term bonds or index funds, instead.

>>MORE: Keep up with the new money rules by subscribing to Money As If, a free weekly personal finance newsletter.

3. Plan to retire on 80% of your current income

Yeah, that's probably not going to cut it either, thanks to Social Security uncertainty, the rising cost of health care, and the noble pursuit of an active retirement. Nowadays, some experts are floating a 100% goal for income replacement in your happy golden years.

4. Save 10% of your income for retirement

Another rule where the math isn't quite math-ing anymore, given question marks around Social Security, deflated salaries for young workers, and recommended retirement account withdrawal rates. You likely need to institute a higher savings goal to ensure you retire comfortably.

5. The 4% rule of retirement withdrawals

Conventional wisdom says to aim to withdraw 4% of your retirement savings in your first year of retirement, then adjust that amount for inflation each subsequent year.

But academic research suggests that's no longer the most prudent strategy due to inflation, evolving lifespans, and other economic factors. Instead, consider a personalized approach or an age-based strategy tied to the Internal Revenue Service's required minimum distributions, the study says.

6. Wait until age 70 to take Social Security

Waiting until age 70 entitles you to the highest benefit checks. Still, contrary to popular belief, it's not always in your best interest — especially now that our current political climate has made the future of Social Security itself unclear.

7. The 60/40 rule of investing

One of the most common ways to de-risk your financial portfolio involves investing 60% of assets in stocks and 40% in bonds. However, some experts argue that this strategy doesn't adequately account for inflation in our current economic climate.

8. The 100-minus-your age rule of investing

This alternate way to balance your portfolio suggests you subtract your age from 100 and allocate that amount to stocks. So, if you're 25, you should have 75% of your assets in stocks and 25% in bonds.

But like its 60/40 counterpart, experts suggest the rule fails to adequately address the market's conditions at the time of rebalancing.

>>MORE: Learn whether you can ever lose all of your retirement savings.

9. The 50/30/20 rule of spending …

This popular budgeting method allocates 50% of your income to needs, 30% to wants, and 20% to savings and debt repayment. The trouble is, in certain areas, the cost of living is simply too high to cover needs with only 50% of your income.

10. … or other rigid budgets

Alternate budgeting methods, like zero-sum or cash stuffing, are increasingly considered time-consuming and too restrictive.

11. You need a budget

In fact, you don't need a budget at all, argues Dana Miranda, personal finance journalist and Certified Educator in Personal Finance (CEPF), in her new book "You Don't Need a Budget," which takes on the toxic budget culture that has pervaded the personal finance industry since its inception.

12. You can retire on $1 million

Here's another old-school number that keeps getting revised upward, thanks to inflation, longer lifespans, lifestyle creep, and other factors. Recent studies show most Americans now believe they'll need closer to $1.5 million to retire comfortably.

13. Homebuying is a guaranteed investment

High mortgage rates, stubborn housing prices, and climate change are changing the calculus on an already overly simplified decision. Learn more about when (and where) renting is a better option.

14. Spend no more than 28% of your gross monthly income on housing costs

Again, this advice is good as a general rule of thumb — it's just not always realistic. A recent study found that 76% of Americans spend 32% or more of their income on housing.

15. Always put down a 20% down payment

Listen, as a former homeowner, I'd recommend buying a house with a 20% down payment. Otherwise, you're stuck with private mortgage insurance (PMI) and (probably) a sky-high monthly payment.

But that doesn't mean you need to have that much money on hand to buy a home. It's not a financing requirement, and while it can make a home offer less appealing in a hyper-competitive market, sellers don't only care about down payments.

16. Pay your mortgage off early

There are quite a few rules designed to help you do this, including the 10/15 rule, the 2% rule, and biweekly payments, and most mortgages don't come with prepayment penalties.

Still, the urgency (and onus) is less necessary if you have a low mortgage rate and you'd be tying up a ton of money in home equity.

17. Renovations add value to your home

Given today's elevated home prices, you might need to renovate your abode to up its market value. And, even if you do, the rate of return varies wildly, depending on what you change. Some modifications can actually lower the value of your home.

18. Cut out lattes and avocado toast so you can afford a house

The idea that your vices are costing you is nothing new, though this version, aimed at millennials, has really taken off in recent years.

The thing is, several news outlets crunched the numbers on this and, as you might have guessed, people would need to skip over 15.6K lattes and 5.2K servings of avocado toast to maybe, just maybe, buy a home in anywhere from 30 to 60 years.

In other words, let's start blaming sky-high housing prices, deeply depleted inventories, climate-related risks, stubborn mortgage rates, and wage stagnation for our homebuying troubles instead.

19. The key to financial success is deprivation

Saving has long been the cornerstone of most financial wellness plans. But coupon-clipping, buying in bulk, and continually cutting your budget will only get you so far and potentially make you miserable.

A personal finance expert, Ramit Sethi, says: "Money should be fun. The point of money is not to accuse each other. The point of money is not even to save it. The point of money is to use it to live a rich life."

20. Financial Independence, Retire Early (FIRE)

The FIRE movement encourages people to use extreme saving and early investment strategies to retire by age 40. It originated in the '90s and had a real moment in the late 2010s.

But now that many adopters have achieved their goals, some are exhibiting regrets due to savings burnout, lack of fulfillment post-retirement, an inability to shake the anti-spending mentality, and other factors.

21. All debt is bad

Actually, some debt is good — namely, debt you can pay off that has a worthwhile return on investment. Think of a mortgage, auto loan, or even some student loans.

Plus, even "bad" debt, usually tied to credit cards or other high-interest financing, can be used as a tool in emergencies.

22. Pay down debt, then save

Plenty of financial gurus will tell you to prioritize debt, but, in reality, it all depends on how much your balances currently cost you. And, in most scenarios, debt repayment shouldn't come at the expense of your emergency savings fund.

23. Pay down debt, then invest

Experts have moved toward suggesting a balance between paying debts and investing, especially if your investments are likely to earn more than you’re paying in interest.

24. Use the rule of 72 to ballpark investment returns

Research shows this common rule — which determines how long it'll take to double any given investment — is most accurate for rates of return of 5% to 10%. You might be better off using online investment calculators or adjusting the formula for investments outside that range.

25. All portfolios need a hedge against inflation

In theory, it's a good idea, but remember that not all hedges are created equal. In fact, some alternate "investments" — like meme coins — are straight-up gambles. Learn more about the pros and cons of common alternative investments.

26. Buy the dip

I get why this phrase is making the rounds these days. I'm less clear on how it exists directly alongside "never try to time to market.”

27. U.S. Treasury bonds are always a good investment

Foreign investors beg to differ.

28. Opt for whole life insurance

To be fair, this rule's been defunct for a while, but, ICYMI, term life insurance is much cheaper — and sufficient when you're primarily in the market for income protection.

29. You need 10x your income in life insurance coverage

That's still (sort of) the average rule of thumb, but you might need more or less, depending on your debts, assets, and financial obligations. Plus, people without dependents don't need life insurance at all.

30. Everyone should go to college

Skyrocketing college tuition is pricing people out of higher education and making it harder to recoup (and justify) the investment. Beyond that, research suggests that the economic outcomes for young adults without a degree are improving.

As a result, college is becoming more of a personal choice and less of a pre-requisite, depending on the field you're pursuing.

31. Parents should prioritize saving for their kid’s education

Beyond growing questions about college as a necessity, research finds that parents who set up 529 plans often do so at the expense of their retirement savings.

32. Pay student loans back ASAP

If you have high-interest private loans, sure, but people with federal student loans might forfeit the opportunity for student loan forgiveness. Plus, extra loan payments shouldn't come at the expense of your emergency or retirement savings.

33. Don’t job-hop

This advice made sense when companies offered pension plans to long-term employees. But those days are long gone. Only 15% of private sector workers have access to a defined benefit plan, finds the U.S. Bureau of Labor Statistics.

Plus, while there are murmurs of diminishing returns, job-hopping has historically led to significant salary increases.

34. Avoid resume gaps at all costs

Gaps between jobs have become more acceptable in the wake of the COVID-19 pandemic — which caused the loss of 22.4 million U.S. jobs — and increased awareness around work/life balance.

35. That ‘Open to Work’ LinkedIn banner is a liability

Not so much, says The Job Hopper. Recruiters actively use this feature to find willing applicants, so if you're on the job hunt, go ahead and update that profile.

>>MORE: 50 ways to survive a recession (whenever it may be)

36. Couples must share money …

A money "rule" that gained popularity as survey upon survey linked financial discord to divorce. However, transparency around money and pooling your money with your partner are two different things, and there are plenty of reasons to keep at least some accounts separate, making this more of a personal decision.

37. … files taxes jointly …

Married couples filing jointly generally face a lower liability as they can take advantage of more tax breaks and family-based deductions. But, again, there are times when filing separately might be your best course of action — the most common being when one of you has high medical expenses or an income-based student loan payment.

38. … and split costs even-Stevens

While perhaps preferable to more antiquated rules that reinforce toxic gender norms, this strategy is probably not the best fit for partners making wildly different salaries.

39. Spend three months’ worth of income on an engagement ring

Most people spend much less. Per The Knot, the average cost of an engagement ring in 2024 was $5,200, a figure that's been steadily dropping since 2021.

40. Keep childcare costs to 7% of your household income

It's not that this rule is necessarily bad advice, so much as it's near-impossible to follow in many areas or situations. A recent Bankrate analysis found full-time center-based care for one infant costs at least 10% of family income in 48 states and the District of Columbia.

41. Always maximize tax-deferred contributions

In the best of times, sure, take your employer up on its 401(k) match and try to meet the maximum annual contribution limit for individual retirement accounts (IRAs). In the worst of times, you might have to pause contributions to juice short-term cash flow.

42. Avoid taking 401(k) loans

Yes, there are drawbacks to pulling money out of a retirement account — namely, tax penalties and depleted savings. However, hardship loans or withdrawals are a thing, and many Americans have resorted to them recently due to financial stress.

43. Never use a credit card for large purchases

There are downsides to charging big bucks on a credit card. You could hurt your credit score if you bump up against its credit limit and pay high interest on those dollars.

But (a) emergencies happen, and (b) that’s what zero-interest credit cards — which offer a 0% annual percentage rate (APR) on purchases for a set time, usually 12 to 21 months — are for, no?

44. Carry a balance on a credit card to build credit

This one's not a rule so much as a straight-up money myth. You don't need to carry a balance, which would necessitate paying interest, to build or improve your credit score. Just having the card helps.

Beyond that, paying on time in full establishes a good payment history without costing extra. Learn more about how credit scores work.

45. Close unused credit cards

That could hurt your credit score by affecting your credit utilization rate (how much debt you carry vs. how much credit you have). Plus, you could lose benefits.

46. You need a perfect credit score

Truth be told, a credit score of 760 or higher is enough to qualify you for the most favorable loan terms and conditions.

47. Leasing a car is a waste of money …

People harp on leasing because of how fast cars depreciate, but there are upsides to this option. Most notably, it's likely to net you a lower monthly car payment. And it affords people who like changing cars every few years a certain amount of flexibility.

48. … so is buying used

It depends on the market. Thanks to the ongoing tariffs, experts are currently predicting big price hikes for used vehicles. However, before the trade war, used car prices were consistently declining, making them a more attractive purchase.

49. Talking about money is gauche

Most (62%) Americans don't talk about money, even though doing so can lead to better financial outcomes, like higher salaries, more retirement savings, and improved overall wealth.

50. Failing to follow the ‘good’ money rules is a sign of weakness

You might have noticed that many of the money rules on this list contradict or conflict with one another. You also might clock that some seem downright impossible. (I know, I can't imagine saving more than 10% of my current income for retirement either.)

Take that as a sign not to blame or beat yourself up the next time you commit a purported financial faux pas. Sure, it helps to know the best practices, but they're often easier said than done — and not mandatory.