Family heirlooms, traditions, customs, and knowledge get passed down through generations. You might use your grandmother’s chocolate chip cookie recipe and plan to share it with your own child one day. Or you might come from a long line of farmers and started learning the trade before you even started school.
While some physical objects and information should continue to be passed down, some are now obsolete. So while you should keep passing down those high-quality cast-iron pans, many of the money lessons people used to follow simply can’t be relied upon in modern times.
Let me highlight several money rules from your elders that you should ignore. I’ll explain why each outdated rule used to work, why it no longer applies, and the current guidelines you should be using instead. After all, keeping up-to-date on your monetary recommendations is an essential part of any person’s financial planning process.
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These Old-School Financial Tips May Not Work for You
As the employment landscape, stock market, and overall economic environment evolve, so should your financial practices.
“The economy has changed faster than the advice we pass down, and clinging to old rules is the real risk,” says Fei Chen, investment strategist and CEO at Intellectia. “Young people need tools that match today’s economy, not yesterday’s.”
These are some of the stubborn financial tips that no longer apply—and the more current recommendations you should follow instead.
1. Put Your Money in a Savings Account to Help it Grow
Back in the 1980s, rates on boring ol’ savings accounts soared as high as 8%—not too far removed from the average annual return you could expect from the stock market!
Were that still true today, parking a chunk of your money into these low-risk, liquid accounts would be a smart financial move. But today’s rates for traditional savings accounts aren’t nearly as high. As of Dec. 15, 2025 (the most recently available data from the FDIC), the national average savings and interest checking account rate was a mere 0.40%. That’s barely better than stuffing your cash under a mattress.
Considering the stark difference in rates, the advice to grow your money in savings accounts no longer applies.
If you’re looking to keep your money liquid and safe while still gaining a modest but decent rate on it, you could look toward a high-yield savings account (HYSA),
For those who seek liquid, low-risk savings account alternatives, instead consider putting some of your money in a high-yield savings account, money market account, or certificate of deposit (CD). You still won’t earn 8%, but you’re still likely to earn around four to five times what you would in a traditional savings account without sacrificing much in the way of liquidity or security.
Of course, if you want true growth, you’ll want to turn to the stock market or alternative investments.
2. Credit Cards Are a Debt Trap
I would argue that “credit cards are a debt trap” has always been an exaggeration.
Used foolishly, yes, credit cards and their high annual percentage rates (APRs) will put you at risk of a “debt spiral” in which the costs of merely paying off the interest become too much to bear, compounding your debt until something breaks.
But used properly (that is, carrying extremely low balances or, better still, paying them off each month), credit cards are a way to get more out of your finances. Among the reasons?
–Many credit card companies offer cash back or other rewards. As long as you’re only buying what you would anyways, you’re being financially rewarded for no extra work.
–Credit cards can help you build a credit history. This makes you more likely to be approved for mortgages, car loans, and other debt—and at better rates to boot.
–They’re more secure than cash. If someone swipes your card and makes unauthorized purchases, it’s relatively easy to have that debt wiped away. But if your cash is stolen, it’s likely gone for good.
–They have less liability than debit cards. If you report a stolen credit card before any fraudulent charges are made, you have no liability. If you don’t report it until after fraud occurs, your maximum liability would be $50—and many credit card companies won’t even charge you that. But with debit cards, if you report fraudulent charges within two days of those charges, you’ll have a maximum liability of $50; if it’s between two and 60 days, you might be responsible for as much as $500; and anything over 60 days might leave you liable for all unauthorized charges.
–You can’t beat the convenience. Credit cards are simply easier to use.
To be fair, credit cards weren’t always as secure as they are today. Embedded EMC smart chips, which were a massive step up in protection, didn’t become standard in the U.S. until the mid-2010s. So it would make sense that older adults would be more hesitant about their use over cash.
But today, credit cards are more secure and highly beneficial. Just make sure to pay off your credit card balance every month so you don’t fall into a debt spiral.
Related: Is It Better to Pay With Cash or a Credit Card? The Answer: It Depends
3. A College Degree Ensures Financial Stability
It is generally true that your salary will increase alongside your education level. Per 2024 data from the Bureau of Labor Statistics, the annual median salary by education level is as follows:
–No diploma: $38,376
–High school diploma: $48,360
–Some college (no degree): $53,040
–Associate degree: $57,148
–Bachelor’s degree: $80,263
–Master’s degree: $95,680
–Doctoral degree: $118,456
–Professional degree: $122,876
But it takes more than just hard work to get a college degree nowadays. It often requires student loans, too. And in a 2023 Pew Research Center survey, only 22% of people said the cost of getting a four-year college degree today is worth it, even if the person has to take out loans.
Some of that sentiment comes from the fact that student loans have ballooned in size, making them more difficult to pay off—some adults carry that debt with them into their 40s and even 50s. Some of it has come more recently as advances in artificial intelligence have cut into the job market for some career paths requiring more advanced degrees.
Meanwhile, there are many high-paying jobs that don’t require a degree and also are more insulated from advances in AI.
Again, a college degree will get you farther in some professions, and it remains a prerequisite for others. Not to mention, a college education provides more benefits than just making you employable. But it’s no guarantee of financial success, and it’s hardly the right path for everybody nowadays.
Related: 10 High-Paying Jobs You Can Get With ‘Vanity Degrees’
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4. You Should Stick With One Company Throughout Your Career
Once upon a time, if you were loyal to your job, you would be rewarded for that loyalty with pay raises and promotions.
Is that still true today? Occasionally, but it’s hardly the norm. Younger generations have found that loyalty is rewarded with career stagnation, and that sticking with one company limits their salary growth potential.
The average salary increase gained from switching jobs is 14.8%, according to a Zippia analysis, which compares favorably to just 5.8% wage growth for those staying put.
The belief used to be that if you were loyal to your job, you would be rewarded for that loyalty with pay raises. However, younger generations have found that loyalty isn’t always rewarded with monetary increases and sticking with one company often limits their salary growth potential.
Zippia analysis shows that the average salary increase when switching jobs is 14.8%. Comparatively, wage growth staying put is 5.8%. Compound those effects over time, and a job-hopper could expect hundreds of thousands of dollars in additional lifetime earnings compared to a loyal “company man.”
This isn’t to say you should automatically leave your dream job because of some invisible ticking clock. If your workplace is good at recognizing and compensating its best performers, and—importantly—if you’re happy, you should stay.
But don’t be afraid to jump ship if your employer doesn’t understand the worth of loyal and hard workers.
Related: Career Compensation Is More Than Salary: 10 Other Financial Perks to Consider
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5. Never Carry a Mortgage Into Retirement
Older generations, more than the new, have a fixed mentality that all debt is bad and should be avoided at all costs. Following this logic, they believe you should always pay off your mortgage before you retire.
To be clear: This can be extremely beneficial to some people. Homeowners stuck with high interest rates can save a significant amount of money by paying off their mortgages early, not to mention it can improve your cash-flow situation during retirement and provide breathing room in your budget.
Older generations often have the mentality that all debt is bad and should be avoided at all costs. Given this logic, they say you should always pay off your mortgage before you retire.
For many people, this is a good move. Homeowners with high interest rates can save a significant amount of money by paying off their mortgages sooner. A paid-off mortgage can immediately help your cash flow and give your retirement budget a lot more breathing room.
But it’s not universally good advice.
For instance, if you’re about to retire and you have other debt at a higher interest rate than your mortgage, you should prioritize that debt over your mortgage. You also shouldn’t necessarily move all your financial resources into paying off the mortgage if you’re behind on investing for retirement. And if you claim the mortgage interest deduction, sticking to your regular payoff schedule might make more sense from a tax perspective.
If you’re wondering whether you should carry your mortgage into retirement, you should ask a financial advisor—not your grandparents.
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6. Use the 60/40 Rule for Your Retirement Portfolio
The 60/40 rule is an investment guide for your retirement portfolio that says you should allocate 60% of your assets in stocks, and 40% in bonds and other fixed-income investments. This was considered a “balanced” portfolio when the rule was created … in the 1950s.
This retirement rule is terribly outdated.
Not only is a 60/40 split considered way too conservative for younger people just starting to invest for retirement—because of much longer life expectancies, it might even be too conservative for some investors who are near or in retirement!
Additionally, sticking to only stocks and bonds might not offer enough portfolio diversification. For some, alternative investments—such as real estate or commodities, or even cryptocurrency or fine wine—might be more appropriate in small allocations.
As far as the broader stock/bond guidance goes, some suggest a 70/30 mix is healthier, but many others prefer a rolling split that could be as aggressive as 100/0 when you begin investing, and as conservative as 0/100 once you’re well into retirement.
Given that your portfolio needs to reflect your time horizon, goals, and risk tolerance, that blend is up to you—and if you’re not sure, you should talk to a financial advisor.
Related: How to Rebalance Your Portfolio: A Quick Guide
7. Use the 4% Rule for Retirement Withdrawals
The 4% rule is a highly popular variation of the dollar-plus-inflation retirement withdrawal strategy.
This rule states that you should withdraw 4% of your savings in your first year of retirement. Then, in each subsequent year, you take the previous dollar amount and adjust it for inflation or deflation.
The 4% rule assumes your retirement portfolio is 50% to 75% invested in stocks, and 50% to 25% invested in bonds and cash. If not, the rule doesn’t work.
But over time, many people started to believe that the 4% rule was outdated, including creator William Bengen himself. Within the past few years, Bengen suggested the maximum safe withdrawal rate could be as high as 4.5% and even more recently bumped it up to 4.7% during the first year of retirement.
Previously, Morningstar had also recommended the 4% rule, but they too have changed their tune. Morningstar points out that spending patterns aren’t static in retirement:
“Based on studies of actual spending during retirement, retirees often decrease their inflation-adjusted spending over time, a pattern that can also lead to considerably higher safe withdrawal rates. Incorporating actual spending patterns over retirees’ lifecycles leads to a safe starting withdrawal percentage of 4.8%, assuming a 30-year horizon and a 90% probability of success.”
Your withdrawal strategy doesn’t need to be the 4% rule—that’s just one of several popular and effective retirement withdrawal strategies. But whatever your strategy, you should adopt it only after you consider your personal financial situation, current market conditions, inflation, and other factors. Moreover, your chosen strategy doesn’t need to be set in stone—it can be flexible.
Because withdrawal strategies can be fairly complex and require a holistic view of your retirement savings, resources, and plans, you should consider discussing your retirement withdrawal strategy with a financial professional.
Related: Don’t Make These 7 Mistakes When Choosing a Financial Advisor
Want to talk more about your financial goals or concerns? Our services include comprehensive financial planning, investment management, estate planning, taxes, and more! Schedule a call with Riley to discuss what you need, and what we can do for you.
Related: 7 Best Vanguard Dividend Funds for 2026 [Low-Cost Income]
What’s better than a smart, sound dividend income strategy? How about a smart, sound dividend income strategy with very little money coming out of your pocket?
If that sounds good to you, you need look no farther than low-cost pioneer Vanguard, which offers up a number of payout-oriented products. Find out what you need to know in our list of seven top-notch Vanguard dividend funds.
Related: When Should You Take Social Security?
Social Security is a pillar of many older Americans’ retirement income. Typically, around 90% of people age 65 and older are collecting Social Security benefits at any given time.
But while most of us will end up on Social Security, when we choose to start collecting benefits will differ from person to person. Our guide to Social Security timing may help you decide.
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