10 money rules we don’t follow anymore / 88
Personal finance advice has a way of sounding very definitive.
💳 Don’t take on debt.
🏠 Put 20% down on a house.
🚫 Never touch your emergency fund.
Those rules can be helpful when you’re learning about money because they give you structure. But the more you learn — and the more life you live — the more you realize that money is rarely that black and white.
In this blog post, we’re revisiting financial rules we used to believe and sharing why our thinking has changed — not because the old advice was always wrong, but because good personal finance isn’t about following the “rules” to a T.
Episode highlights
[00:00] Why we're revisiting the money rules we used to follow, and why it's okay for your financial philosophy to evolve
[02:00] Why we no longer believe all debt is bad, and how low-interest debt can sometimes make financial sense
[04:30] Our approach to using credit cards responsibly, and why avoiding them isn't always the best advice
[6:00] Why waiting to invest until you're completely debt-free can cost you valuable time in the market
[09:00] The difference between intentional lifestyle upgrades and keeping up with everyone else
[12:00] Why we don't believe buying a home should be everyone's default financial goal (but it’s okay if it’s your goal) — and why renting can be a great choice for many
[16:00] The truth about putting 20% down on a house and why many buyers take a different path
[19:30] Why your emergency fund is meant to be used, and how to let go of the guilt when life happens
[24:00] How our views on the FIRE movement have changed and why balance matters more than financial perfection
[29:30] Why the "financially optimized" choice isn't always the right choice — and how talking openly about money can make all the difference
Money rule #1: All debt is bad
It’s easy to absorb the message that debt is bad and getting rid of it should always be the priority. High-interest debt can absolutely make it harder to build financial stability, but treating all debt as equally harmful leaves out important context.
The interest rate matters. The type of debt matters. And what you would otherwise do with that money matters.
Low-interest debt, for example, may not call for the same urgency as high-interest credit card debt. If aggressively paying it off means stopping your investments or draining your savings, there may be a tradeoff worth considering.
Rather than asking whether debt is universally good or bad, ask what the debt is for, what it costs you, whether the payments are manageable, and what you’d give up to pay it off faster.
Money rule #2: Credit cards should be avoided
Credit cards aren’t automatically bad either. For someone who struggles with overspending or carrying a balance, avoiding them may genuinely be the best choice. But when used responsibly, credit cards can help build credit, offer certain protections, and provide rewards on spending you were already going to do.
The important distinction is between using a credit card and using a credit card to spend money you don’t have.
If you can pay your balance in full and on time without spending beyond your means, a credit card may fit perfectly well into your financial life. If you can’t, opting out is valid too.
Money rule #3: Pay off all your debt before you invest
Becoming completely debt-free before investing sounds logical: finish one goal, then move on to the next. But investing early gives you an advantage you can’t recreate later: time.
The longer your money is invested, the more opportunity it has to compound. Waiting years to start investing while paying down relatively low-interest debt can mean giving up some of that time in the market.
That doesn’t mean investing should always take priority over debt. High-interest debt is a different situation. But debt payoff and investing don’t necessarily need to happen one after the other. Depending on your circumstances, you may decide to work toward both at the same time.
Money rule #4: Lifestyle inflation is always bad
Lifestyle inflation usually gets framed as something to avoid at all costs: you make more, spend more, and suddenly your raise is gone.
But spending more as your income grows isn’t automatically irresponsible. Sometimes improving your financial situation is supposed to improve your life.
The key is intentionality. There’s a difference between spending more on things you genuinely value and upgrading your lifestyle because you feel pressure to keep up with everyone around you.
If you’re still making progress toward your financial goals, it’s okay for some of your increased income to make your life better today. You’re allowed to enjoy your money, too.
Money rule #5: Everyone should want to buy a home
Homeownership is often treated as the natural next step after renting — and even as a marker of financial success. But buying a home doesn’t need to be everyone’s goal.
Homeownership can offer stability, more control over your space, and the opportunity to build equity. It also comes with costs and responsibilities beyond the mortgage payment.
Renting, meanwhile, can offer flexibility and fewer maintenance responsibilities, and in some markets it may simply make more financial sense.
The real question isn’t whether buying is better than renting. It’s whether owning a home supports the life you want. If homeownership is one of your goals, great. If it isn’t, you don’t need to put it on your financial checklist just because everyone else does.
Money rule #6: You need to put 20% down on a house
If you do want to buy a home, you’ve probably heard another familiar rule: you need a 20% down payment.
Putting 20% down has advantages. It can reduce how much you borrow and potentially lower some of the costs associated with your mortgage. But it isn’t a universal requirement, and many buyers purchase homes with smaller down payments.
There are tradeoffs either way. Saving 20% may take years, while putting less down can mean borrowing more and having higher monthly costs. What matters is understanding those tradeoffs and choosing an approach that fits your overall financial situation — not hitting an arbitrary percentage because you were told that’s the “right” way to buy a home.
Money rule #7: Using your emergency fund means you failed
You work hard to build an emergency fund, and then an emergency actually happens. Suddenly, spending the money can feel like undoing all your progress.
But using your emergency fund for an emergency means it did its job.
That money isn’t a trophy you’re supposed to protect forever. It exists to absorb the financial impact when life doesn’t go according to plan.
If you need to use it, you can rebuild it when you’re able. You don’t need to add guilt to an already stressful situation. Having money available when something goes wrong is exactly why you built the fund in the first place.
Money rule #8: FIRE is the ultimate financial goal
FIRE — Financial Independence, Retire Early — has helped a lot of people rethink their spending, investing, and relationship with work. There’s plenty we still appreciate about the idea, especially the goal of creating more financial freedom.
What has changed is our relationship with the more extreme versions of it.
If pursuing financial independence means postponing everything enjoyable or optimizing every expense so you can retire as early as possible, it’s worth considering what you’re sacrificing along the way.
Financial independence doesn’t have to mean retiring at 35. It could mean having enough savings to leave a bad job, change careers, take time off, or simply feel more secure. You can prepare for your future without treating your present life like something you need to get through first.
Money rule #9: The most financially optimized choice is always the best choice
This might be the bigger lesson behind all of these rules: every financial decision doesn’t need to be perfectly optimized.
There may be a choice that looks best mathematically, but money exists within the context of an actual human life. Your stress, relationships, priorities, flexibility, and sense of security matter too.
Maybe you pay off low-interest debt early because being debt-free gives you peace of mind. Maybe you rent because you value flexibility. Maybe you spend more on something that genuinely improves your everyday life.
Money rule #10: Don’t talk about money
We hope the days of not talking about money are coming to an end. And we obviously don’t subscribe to this rule, as we literally have a podcast about money! We also understand it can be scary to open up about money when there’s so much judgment out there. But if you can push through that discomfort, we think it’s usually worth it.
Here’s why: Talking openly about money can benefit us and others who are in a tough spot. Not only can having money conversations help us learn and share valuable information, but talking about money can help you and others feel less alone.
TL;DR
Not all debt is the same; interest rates, opportunity costs, and your overall financial situation matter.
You don’t necessarily need to become completely debt-free before investing.
Renting, putting less than 20% down, and using your emergency fund can all be reasonable financial choices.
Financial independence can be a goal without sacrificing everything you enjoy today.
The most mathematically optimized decision isn’t always the best decision for your life.
The Finance Girlies content is for educational purposes only and is not personalized financial, tax, or legal advice.
