savings

How Useful Are Financial Rules of Thumb?

These guidelines are often touted as gospel truth. Do they point you in the right direction -- or lead you astray? Take our quiz to find out.

Making financial decisions often involves a lot of "on the one hand, on the other hand." But sometimes you just want a fast answer -- a simple guideline to point you in the right direction.

That's where rules of thumb come in: They aim to break down a complex financial choice into a quick one-liner. You know, "Never spend more than 36% of your income on housing," for example, or "pay off debt with the highest interest rate first."

They may be touted as gospel truth, but when it comes to money rules of thumb, some are more helpful than others. Many are time-tested words of wisdom that set you on the right path. Others are downright wrong and could wind up costing you, no matter how well-meaning the giver of advice. The misleading guidelines may be outdated, impractical or simply a misunderstanding. The trick is evaluating these oft-quoted principles to see if they make sense for your personal situation.

Just how useful are the financial rules of thumb? We've pulled together a QUIZ to see if you can sort the most truthful advice from the misleading.

Of course, the one solid rule of thumb you can count on is that there is no one-size-fits-all answer to most financial decisions. But if you can zero in on the best rules of thumb, you're one step closer to making good choices with your money.

TAKE OUR QUIZ: Financial Truth or Bunk?

Most Popular

Why Are Gas Prices Still Going Up?
spending

Why Are Gas Prices Still Going Up?

The cost of a gallon of gas is at an all-time high. What’s driving the surge and will gas prices go down anytime soon?
May 23, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
Which States' Taxes Are Going Down
Tax Breaks

Which States' Taxes Are Going Down

State lawmakers are cutting income, sales and property taxes to return budget surpluses to residents.
May 25, 2022

Recommended

Things You’ll Regret Keeping in a Safe Deposit Box
savings

Things You’ll Regret Keeping in a Safe Deposit Box

Locking up certain important documents and valuables in a bank vault could turn into a headache for you or your heirs.
May 18, 2022
The 25 Cheapest U.S. Cities to Live In
places to live

The 25 Cheapest U.S. Cities to Live In

Take a look at our list of American cities with the lowest costs of living. Is one of the cheapest cities in the U.S. right for you?
April 28, 2022
ABLE Accounts Give Disabled More Financial Freedom
Financial Planning

ABLE Accounts Give Disabled More Financial Freedom

People with disabilities, and their families, can save for a variety of expenses in these tax-advantaged accounts.
April 27, 2022
7 Money-Smart Ways to Spend Your Tax Refund
Tax Breaks

7 Money-Smart Ways to Spend Your Tax Refund

Nearly 60% of taxpayers expect a refund this year, and many will receive a larger amount.
April 22, 2022