You probably grew up with parents (or grandparents) who cautioned that money doesn’t grow on trees, or a fool and his money are soon parted. But did you ever stop to think about what those adages mean to your financial life? Blogger Jennifer Nelson applies these wise words to financial health.

Many of those clichés actually have the potential to provide sound financial advice. Here’s our take on a few old timer’s financial rules of thumb—ask your parents which is their favorite to live by.

  1. Pay Yourself First

“Millennials are a generation of instant gratification,” says Rhett Wood, an investment advisor representative at Retirement Solutions in Oklahoma City. “I know this because I am a Millennial.” Because 20-somethings have a need for instant gratification, they often find it hard to save. “If more people started the habit of paying themselves first, saving money would be much easier,” says Wood. In fact, the earlier you begin, the easier it is to save for your future retirement.

Paying yourself first means setting aside a fixed amount every month that is yours to keep. The rest of your income can be used for your needs and wants. “We recommend our clients save at least 10 percent of everything they make,” Wood says. In 10 years, you’ll have saved an entire year’s salary, not to mention the interest growth that savings will earn.

Yes, it’s hard coming out of college with debt and not necessarily starting your career with high earnings. But if you live by the “pay yourself first” rule of thumb, you’ll not only get out of debt more quickly, you’ll also have money for emergencies, can fund your retirement, and will amass more wealth over your lifetime than someone who pays themselves after everyone else gets their share.

  1. Convince Banks You Don’t Need the Loan

It’s true: Banks care a lot about a person’s credit and income. “The better your credit history and the higher your income, the easier it’s going to be to get a bank loan,” says Priyanka Prakash, a finance specialist at Fit Small Business, an educational site for small business owners and entrepreneurs. But there are many more ways to borrow money today than there were in our parents’ and grandparents’ time.

“Online alternative lenders are becoming a larger source of funding for individuals and businesses,” says Prakash. And at these institutions, you may not need to prove you don’t need the money. For example, SoFi offers home loans online, Lending Club helps people refinance credit card debt at lower rates, and lenders like OnDeck provide business loans. “Many of these companies are willing to work with lower credit borrowers, but this, of course, means they may charge higher rates than a bank would charge,” Prakash says.

She encourages borrowers to do their research and make sure they understand how much they’re borrowing, when they have to pay it back, and all interest and fees they’ll be charged. But know that alternative lenders may be available, and for a fee, won’t make you prove that you don’t need their money.

  1. Save for a Rainy Day

Most people aren’t prepared for a financial storm, so saving for one is sound advice. “My parents were born in the 20s, and they saw a lot of ups and downs in the economy over their lifetimes,” says May McCarthy, author of The Path to Wealth: Seven Spiritual Steps to Financial Abundance. “My mother could somehow manage to make one can of tuna with mayonnaise and crackers turn into 10 sandwiches for the kids’ lunches.” While you may not have to live that frugally, when an unexpected expense pops up, you need to have some money saved so you’re able to weather the storm.

For these emergency situations, McCarthy advises people to save six months of monthly expenses at a minimum. In fact, if you don’t have a financial blizzard and have more than six months in reserve, it’s fine to occasionally use your rainy day fund for a splurge like a fancy meal or a weekend getaway. Think of the second interpretation of the rule of thumb—to save for a special occasion. McCarthy recommends calling the fund something positive like a new home fund, or a vacation fund. (It’s my belief that you will actually attract a rainy day or emergency if you call these savings vehicles rainy day or emergency funds. How about the I’m rich fund instead?)

  1. Don’t Put All Your Eggs in One Basket

Your grandmother was right: Just as you wouldn’t put all your chips on the black sevens slot on the roulette wheel, you wouldn’t invest all your money in, say, gold or automotive stocks. Different asset classes, such as stocks, bonds, cash, real estate, precious metals, and commodities, carry different sets of risks and rewards—and behave differently under various circumstances.

Never mistakenly believe a single type of asset is the key to wealth: If you were to put all your money in a single stock and it didn’t perform well, you’ve lost all your money. “My father was a fan of having a variety of diversified types of investments for the same reason; if one type of investment lost money, the other investments most likely would not and you would still have value in your portfolio,” says McCarthy. She advises people to have a variety of investments (bonds, stocks, real estate, etc.) and multiple channels of income when possible. 

  1. Never Spend Money You Don’t Have

“The more credit cards we have in our wallet, the easier it is to spend money before we have it,” says Wood. And while some debt (like mortgages and college loans) are almost unavoidable, you should make it a habit not to buy things before you have the money to pay for them. “If you aren’t able to pay those bills at the end of every month, you’re spending money you don’t have,” says Wood. Set a budget and stick to it. Make sure you aren’t spending more than you’re bringing in.

These sayings have been passed down through the years because they still ring true. Utilize these financial rules of thumb to motivate yourself to get on track with your own finances and you’ll realize their value.

Jennifer Nelson is a Florida-based journalist who writes about lifestyle and financial health topics for outlets like Forbes,, and AARP.

Any third-party resources or websites referenced above are not under Society of Grownups control. Society of Grownups cannot guarantee and are not responsible for the accuracy of the resources, websites, or any products or services available through such resources or websites.

While Society of Grownups hopes the information is useful, it’s only intended to provide general education. It’s not legal, tax, or investment advice, and may not apply or be useful to your specific financial situation. If you need recommendations geared to your personal financial situation, schedule time with a financial planner.

Let's take action, Grownup.

Check out our courses to start taking action on your goals any time.

Take a course

Let's stay in touch, Grownup.