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Wealth
Savings & Retirement

Four Personal Finance Rules That Need a Revamp

Using old money guidelines can give a distorted picture of your financial standing.

The median national asking rent hit a record $2,032 in July according to online brokerage Redfin.

The median national asking rent hit a record $2,032 in July according to online brokerage Redfin.

Photographer: Gabby Jones/Bloomberg

Some of the best-known rules of thumb in personal finance have outlived their usefulness. 

While it’s helpful to have a starting point for a housing budget or savings target, or for splitting an investment portfolio between asset classes, many popular guidelines date back to a time when the growth in real estate prices and wages was more closely aligned, student debt hadn’t breached the trillion-dollar mark, and stocks and bonds didn’t fall at the same time.