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The Golden Rules of Personal Finance

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Consumers are often overwhelmed by the quantity and variety of financial advice, coming from all corners of their lives. Well-meaning family members, personal finance media personalities, friends and colleagues, all happy to discuss what THEY think is best.

With hundreds of advisors on the NerdWallet Ask an Advisor platform, we saw an opportunity to aggregate the wisdom of financial professionals into simple, easily understandable “Rules of Thumb” to help consumers make important everyday financial decisions like “How much student debt should I take on?” “How much do I really need to save for retirement?”

Consumers have the benefit of not just one advisor’s point of view, but the collective knowledge of 100 financial professionals who make their living helping people manage their finances.

Below are the “Golden Rules” for some of life’s most common financial questions:

#1 – How much student debt should I take on?

70% of financial advisors say student debt should not exceed 8% debt payment/income ratio

#2 – How much should I be putting away into my 401(k)?

60% of Financial Advisors Urge Putting Away at Least 10% of your salary in your 401K

#3 – How much should I be spending on housing costs?

100% of Financial Advisors Say Keep Housing Costs Under 30% of Income

#4 – How much should I be spending on transportation costs?

100% of Financial Advisors Say Don’t Spend More than 15% of Your Monthly Income on Transport

#5 – How much should I spend on an engagement ring?

48% of Financial Advisors Say – As little as you can get away with!

#6 – What’s the most important reason to get a prenup?

60% of Financial Advisors Say Most Important Reason For Prenup Is Having the Money Conversation

#7 – How much should I plan on spending per child annually?

Plan on Spending at Least $10K/year per child, say 91% of Financial Advisors

#8 – What works better for debt reduction, Dave Ramsey’s “Snowball Method” or tackling the highest interest rate debt first?

Forget Dave Ramsey – 80% of Financial Advisors Dismiss the Debt Snowball Method

#9 – How much more should I expect to make before considering a new job?

73% of advisors agree – Don’t switch jobs purely for the money

NOTE: All Rules that have income guidelines are as a percentage of after-tax income.

Have more questions you want answered? Let us know in the comments.

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