Outdated Savings Advice To Throw Out the Window
Outdated Savings Advice To Throw Out the Window
Andrew LisaSun, March 22, 2026 at 12:06 PM UTC
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Nattakorn Maneerat / Getty Images
If your goal of saving more money is coming up short, it might be because you’re relying on dated advice that no longer applies in a changing world.
While some parts of the yesteryear money mindset are timeless, such as living within your means, others haven’t stood the test of time nearly as well. Boost your savings by ditching the below antiquated concepts on how to build wealth.
Also here are five brutal truths about building wealth.
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Cut Up Those Credit Cards
With the St. Louis Fed citing the average credit card APR at over 20%, you might be tempted to follow the old-school wisdom of shunning credit cards to avoid the toxic debt that prevents you from saving.
However, the responsible use of credit cards — avoiding interest charges by never carrying a balance and leveraging valuable rewards — can be one of the most effective savings strategies.
For example, the U.S. Bureau of Labor Statistics reported that the average household spends $78,535 annually. If they charged even half that to a flat-rate 2% cash-back card, such as Citi Double Cash or Wells Fargo Active Cash, they’d have around $785 at the end of the year — enough for many families to get through the winter holidays for free.
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Those $5 Lattes Are Killing You
Expensive coffee is the avatar for the deprivation-based savings advice that dominates the personal finance sphere. However, there’s a growing movement against cutting out food deliveries, streaming subscriptions and the other little things that bring you joy to save a few hundred bucks per year. Instead, influencers such as Brian Preston of the Money Guy Show advised chasing serious savings through big-ticket cost-cutting.
Preston called it the “lambos vs. latters” effect — making coffee at home isn’t going to help you save if you’re financing a car you can’t afford or drowning in a mortgage for more house than you need.
For example, myFICO reported that the average new car costs $ 7,735 per year, compared to $3,193 for the average used car. That’s $4,542 extra in your savings account — or about 908 $5 lattes — annually.
Add a Decade (or Better Yet, 2) to the 100 Rule
The term saving for retirement would be better described as investing for retirement because retirement savings compound through investments such as stocks and bonds — but in what ratios?
Historically, the standard advice was the so-called 100 Rule — 100 minus your age is the percentage of stocks you should own, with the rest saved in bonds.
For a 40-year-old, that’s only 60% allocated to stocks, which generates too little appreciation in the era of longer lifespans and extended retirements. Instead, Kiplinger said modern advisors are more likely to swap the formula to 110 or, even better, 120 minus your age to ensure that you don’t outlive your savings.
Editor’s note: This article is for informational purposes only and does not constitute financial advice. Investing involves risk, including the possible loss of principal. Always consider your individual circumstances and consult with a qualified financial advisor before making investment decisions.
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This article originally appeared on GOBankingRates.com: Outdated Savings Advice To Throw Out the Window
Source: “AOL Money”
