Can The Best Financial Tips Fit On An Index Card? (2024)

FAQs

Can The Best Financial Tips Fit On An Index Card? ›

When University of Chicago professor Harold Pollack was interviewing journalist Helaine Olen about her book “Pound Foolish," he made the offhand remark that the financial advice most people actually need is common sense and simple enough that it would fit onto a 4-by-6 index card.

In April 2013, Pollack interviewed Olen about her book Pound Foolish, and metaphorically mentioned "that the best [financial] advice for most people would fit on an index card.” Pollack further said, "if you're paying someone for advice, almost by definition, you're probably getting the wrong advice because the correct ...

Key Takeaways

Managing debt is crucial for financial success. Avoid consumer debt, pay off education before making large purchases like a home, and recognize the difference between productive and wasteful consumer debt. A shared financial outlook and planning in marriage can contribute to financial stability.

What if someone challenged you to cut a hole in an index card big enough to squeeze your entire body through the hole? Believe it or not, it's possible and all you need is an index card, scissors, and a hefty dose of critical thinking and creativity.

The most common size for index card in North America and the UK is 3 by 5 inches (76.2 by 127.0 mm), hence the common name 3-by-5 card. Other sizes widely available include 4 by 6 inches (101.6 by 152.4 mm), 5 by 8 inches (127.0 by 203.2 mm) and ISO-size A7 (74 by 105 mm or 2.9 by 4.1 in).

Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals. Let's take a closer look at each category.

The 20/10 rule follows the logic that no more than 20% of your annual net income should be spent on consumer debt and no more than 10% of your monthly net income should be used to pay debt repayments.

Budget 20% for savings

In the 50/30/20 rule, the remaining 20% of your after-tax income should go toward your savings, which is used for heftier long-term goals. You can save for things you want or need, and you might use more than one savings account.

The amount of money needed to be considered financially stable is subjective and depends on a person's individual situation. But generally, having a net worth of $1 million or more can indicate that someone is financially stable or secure and has a good grasp of money management.

That said, the typical age of financial independence should be between 20-23 years old, according to a Bankrate survey. Break the numbers down by cost category, and differences of opinion can be pretty wide.

Which is not a key to saving money? ›

The key to saving money is to: focus, make saving a habit and a priority, and discipline. Your income is not a key to saving money. Compound interest is interest paid on interest previously earned.

Step 1: Establish Goals

All financial goals should be specific, measurable, and realistic. Determine the amount of money you need and the timeline for saving the money. There are three types of goals: short-range, mid-range, and long-range.

Index funds often perform better than actively managed funds over the long-term. Index funds are less expensive than actively managed funds. Index funds typically carry less risk than individual stocks.

In my observation of a variety of target date funds and managed accounts, the TIPS allocation tends to range from about 10-30% of the total bond allocation. There are outliers, but that can give you a starting point to work with your advisor on the best allocation for your situation.

Paper index cards are widely loved and used across the world and come in a variety of sizes. The most common size in the USA is 3" x 5" (3x5). The second most popular is 4" x 6" (4x6). Other sizes include 5x8 and of course both larger and smaller specialty cards.