Discover the financial rules that may be holding you back and learn why breaking them could actually improve your money management. From saving strategies to investing myths, find smarter alternatives that fit your unique financial situation.

Financial Rules You Should Consider Breaking for Greater Success

Old-school financial guidance tends to encourage people to follow rigid rules regarding saving, spending, and investing. While these rules are useful, they don't always make sense in every circumstance. Indeed, unquestioningly trusting some money rules may do more harm than good at times. 

Whether it's that debt of any kind is always wrong or that you should always save a certain proportion of your income, some personal finance "facts" should be questioned. This article delves into the usual money rules you may want to defy—and why doing so may actually be good for your finances.

Always Save 20% of Your Income

The rule of always saving 20% of your earnings is a good principle, but it isn't a one-size-fits-all rule. If you have high-interest debt or are barely getting by, dogmatically adhering to this standard may put too much pressure on your finances. 

Rather, prioritize what is best for you—save what you can, and give top priority to debt reduction and essentials. As your income increases or your expenses decline, you can slowly raise your savings rate to create long-term financial stability.

Avoid All Debt at Any Cost  

The notion of staying out of all debt might sound like a sound money move, but not all debt is created equal. Some debt, such as mortgages or student loans, can be smart investments in your future that help you get richer or boost earning power. 

Rather than shying away from all debt, learn to separate good debt, which can be beneficial over the long haul, from bad debt, including high-interest credit card debt. Prudent management of debt instead of shunning it altogether can pave the way to improved financial prospects.

Buying a Home is Always Better Than Renting  

The assumption that purchasing a home is always preferable to renting is not true for everybody. Homeownership has unseen expenses such as property taxes, maintenance, and insurance, which might pile up on you. On top of this, home purchasing commits you to staying in a specific place, which might or might not meet your career goals or lifestyle. 

Rather than taking homeownership for granted as the ultimate option, reflect on your future financial status, employment stability, and personal priorities first before making a decision on renting or purchasing as the wiser option for you.

Stick to a Traditional 50/30/20 Budget 

The 50/30/20 budget model—isn't everyone's cup of tea. Some might be forced to allocate more to paying off debt, while others may want to save for something big, like a house or a wedding. 

Ditch the strict adherence to this framework and formulate a budget that's specific to your own situation, tweaking spending and saving categories according to your income, outlays, and long-term financial goals. Flexibility is what allows your budget to serve you.

Investing is Only for the Wealthy 

The notion that investing is reserved for the rich is a thing of the past. With low-cost index funds, fractional shares, and employer-matched retirement accounts, anyone can begin investing with even minimal sums. Waiting until you earn a big income may result in lost time for compounding growth. 

Rather, aim to begin early with what you have, regularly contributing to investments that match your financial objectives. With time, even small investments accumulate into great wealth.

You Should Never Use Credit Cards 

Completely avoiding credit cards might sound like a sound financial principle, but responsibly used, they can be a good thing. Credit cards establish a solid credit history, provide rewards such as cashback or travel miles, and protect against fraud. The trick is to use them responsibly—paying the full balance every month to prevent interest charges. 

Rather than fearing credit cards, consider them to be a tool of finance that, when properly managed, will enhance your financial well-being.

A College Degree is the Only Path to Success

The notion that attending college is the single path to wealth is antiquated. Although college can be a key that unlocks opportunities, numerous lucrative careers do not involve a standard four-year degree. Skilled trades, certifications, and entrepreneurship are also viable avenues to economic security and achievement. 

Rather than presuming college will be best, examine your career aspirations, salary, and education expenses before deciding.

Looking At A Pay Advance App Is Not Bad

Bending traditional financial rules doesn't equate to being irresponsible—it equates to making decisions that fit your individual financial circumstances and objectives. While typical money advice can be a useful starting point, mindlessly adhering to strict guidelines may not always be in your best interest. 

Whether it's tweaking your savings rate, rethinking homeownership, or using credit cards strategically, financial success lies in flexibility and educated decision-making. By challenging traditional thinking and adapting financial planning to your circumstances, you can develop a plan that actually serves your long-term financial health.

Equally, using a wage advance app is also not bad, but is actually beneficial, which you can use in times of emergency—just like Australia’s very own, Wagetap. Get your pay early up to $2,000 and split the bill into four payments with the bill split option. Check Wagetap out on the App Store or Google Play.

For additional help in improving your spending habits, you can always download Wagetap. It is a leading wage advance and bill split app that allows you to access your pay early. Emergencies can always happen and Wagetap can help you handle life's unexpected expenses.