Financial rules of thumb take a lot of the guesswork out of money issues, but one size may not fit all.
THERE IS AN EXCEPTION TO EVERY RULE — even some of our favorite personal finance maxims. Here are seven rules we think are made to be bent or broken.
RULE 1: Shop early for the best deals. Shopping early is key if you want the most choice, whether it’s a winter parka in a certain size or a family friendly cabin on a cruise. It’s also wise to plan your shopping early for gifts tied to holidays, such as Christmas or Valentine’s Day, or for travel around popular holiday weekends.
WHEN TO BREAK IT: You can save by waiting to buy seasonal goods, whose prices tank late in the season. “Everyone wants to buy patio furniture and grills around Memorial Day, but they’re cheapest around Labor Day,” says Benjamin Glaser, of DealNews.com.
Timing travel is trickier. You can book most flights 11 months before departure, but airlines will adjust their prices closer to three months before departure to jibe with demand, according to Hopper, an app that predicts flight prices. In general, Hopper finds the best deals between 25 and 150 days prior to takeoff. For hotels and cruises, look either far in advance or at the last minute for steals if you’re not picky about room type.
RULE 2: Don’t spend more than half your budget on living expenses. One often quoted formula suggests spending no more than 50% of your take-home pay on necessities (including housing, transportation and food), dedicating 20% to savings and debt and maxing out at 30% for lifestyle expenses (including cable, gym membership and dining out).
This story is from the October 2017 edition of Kiplinger's Personal Finance.
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This story is from the October 2017 edition of Kiplinger's Personal Finance.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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