When I was pregnant with Evan, my first child, I was adamant that I’d parent a certain way. And I’m not gonna lie – I low-key judged people who made certain decisions that I didn’t agree with. 

McDonald’s for your kids?! I would never!

Formula instead of breastfeeding? Have you zero concern for what’s best for your child?!

You willingly stopped attending social events and intentionally chose to stay home and go to bed at 9 PM on a Saturday night after having kids? No baby will ever tame this extroverted girl!

Ha, the joke was on me because as I entered motherhood, I ate my words.

My kids love sharing a 20-pack of nuggets from good ole McDonald’s. Both of my kids were fans of Similac, and I’m the queen of keeping my Friday and Saturday nights clear so my husband and I can rewatch the entire series of The Walking Dead because…why not?!

Thankfully, I’ve come to learn this very real life lesson: we don’t have to live by the rules we set before we knew better.

There is room for growth, change, and a good old fashioned mid-stairway pivot, (shout out to everyone who loves Friends).

This goes for parenting, relationships, and MOST CERTAINLY MONEY.

Over the years I’ve changed my views when it comes to “common money rules.” In fact, there are 3 rules in particular that past-Allison would swear by. And here I stand, well…sit, today and share that these rules no longer apply to my present moment. They don’t serve me and I have willingly left them behind in the past.

My hope is that this article allows you to rethink any money rules that no longer fit in your life. You don’t have to force past money rules to work in your present life. This isn’t a round peg in a square hole situation. You don’t have to let your ego or pride get in the way because you once said you’d never let your kids eat McDonalds but here they are, chowing down on nuggets and a basket of fries. You can, and should, let go of what’s not working.

Alas, here are 3 common money “rules” that I have completely removed from my playbook (for now…because I’m always allowed to pivot. And so are you).

Money Rule #1: Avoid credit cards at all costs.

When I first started budgeting and paying off debt, I consumed content where I could find it. This led me to the very popular, yet incredibly toxic, advice given by Dave Ramsey. He was the loudest voice in the room when it came to money management. Naturally, that voice caught my attention. 

Now, I will say that yes, he has helped many people. 

However, when I took a step back, I realized how much of his delivery was rooted in shame and judgment. This isn’t an anti-Dave Ramsey episode, however I do believe that his advice and delivery can be very misleading…and we aren’t even touching on how he treats his employees. 

For instance, one of the first things I learned from his teaching was that credit cards should be avoided at all costs. They promote debt and high credit scores which he claims is an “I love debt” number (spoiler alert: it’s not). I’ll even go so far as to admit that I canceled my only credit card after reading his book, thus sabotaging my slowly growing credit score. 

Yet as I’ve learned more about money and money tools, I believe that while credit cards can lead to debt (hello, a 24% interest rate is just insane), they can also be used as a positive money tool when used responsibly. 

The keyword here is “responsibly.”

Before we dive into how to use a credit card responsibly, let’s address the elephant in the room: your credit score.

Here’s the truth – your credit score matters. If someone tells you otherwise then they are coming from a place of privilege and wealth. Sure, your credit score won’t matter if you have enough cash in the bank to buy a home, a car, your annual trip to the Greek islands, and everything else outright. But that’s not me and I’m guessing if you’re listening to a budgeting podcast then that’s probably not you either. Which, by the way, is totally okay! 

Whether we like it or not, our credit score determines so much when it comes to our finances. We have the obvious: it helps lenders determine the type of interest rate you will receive for mortgage loans, car loans, and personal loans. If you’re taking out loans, your interest rate matters more than you might think. A higher interest rate on homes can add up to tens of thousands of dollars over time. 

But that’s not all!

Did you know that your credit score can also be used by landlords to determine who they should rent to? The lower your credit score, the riskier tennant you are. 

Moral of the story? If you are a renter, a homeowner, or want to possibly ever borrow money in the future, your credit score matters. 

The secret to credit cards comes down to one thing: use them responsibly

For anyone who has ever signed up for a credit card in college to score a free t-shirt and the next night ended up buying a round of shots for your group of friends, we know this is easier said than done. 

We live in a world where credit cards are pretty easy to get and VERY easy to max out. Whether you’re spending money unintentionally or you use your credit card to cover any unexpected expenses that pop up, the interest rate will try to take you down.

Using a credit card responsibly looks like paying off your balance in full every single month. This way, you are never being hit with that crazy-high interest rate. 

When, and only when, you have developed discipline with your credit card, I think it’s perfectly okay to use a credit card to your benefit. 

Credit cards come with many perks, some of which many users aren’t even aware of. I know that several of my credit cards provide rental car insurance, so I don’t have to buy any extra insurance from the rental car company. 

Credit cards also protect you against fraud. A few years ago my debit card number was stolen and used to buy expensive shoes in New York City. It was a pain to cancel that card and get the purchase reimbursed. If this type of situation happens with a credit card, you won’t end up waiting around to be reimbursed like I had to.

My all-time favorite credit card perk lies in the rewards. I’ve talked in detail about how our family uses credit card points to travel hack. If that’s something you’re interested in learning more about then go back and listen to episodes 25 and 62. In episode 62 I break down exactly how we travel hacked our family’s first international vacation. 

Needless to say, I no longer live by the money rule that says we should avoid credit cards at all costs. I have learned that when used responsibly, credit cards can help me build my credit score, offer protection, and allow me to enjoy a few extra perks in the process.

Money Rule #2: Don’t invest until you’re debt free.

Another common money rule that I used to live by: don’t invest until you’re debt free. I completely understand why this is a money rule that people promote.

When I was working to write my book, Money Made Easy, I knew that the only way I’d follow through on my contractual obligations was to make sure I had zero distractions. As someone with ADHD, I tend to become distracted rather easily. I’ve even been known to watch the squirrels outside my office window, creating dialogue between them for a solid 5 minutes until I snapped out of it and had a “Allison what on earth are you even doing?!” moment. 

This is a no-judgment zone, right?

When you’re trying to reach a goal, like paying off those darn student loans, you’ll make faster progress when you can send every extra penny to debt. Investing for your future can be a financial distraction, if you will.

Distractions, whether they come in the form of squirrels or debt payoff goals, can lengthen the amount of time it takes to reach a goal.

However, if you wait until you’re debt free to start investing, you’re missing out on one of the seven wonders of the world: compound interest. Okay, okay…this isn’t a wonder of the world, but it totally should be. 

Compound interest is a concept in finance that refers to the interest earned on an initial amount of money, which then earns interest on top of that amount. Essentially, it’s interest on interest. 

Here’s an example to help illustrate:

Let’s say you deposit $100 into a savings account that earns an annual interest rate of 5%. After one year, you will earn $5 in interest. The next year, you’ll earn interest not just on the initial $100, but also on the $5 you earned in the first year. So you would earn 5% of $105 ($5.25) in interest in the second year.

This process of earning interest on top of interest continues for as long as you keep the money in the account, leading to exponential growth of your savings.

The key here is TIME. 

The longer the time period, the more the interest accumulates, leading to a higher overall return on the initial investment. This is because compound interest is calculated not just on the initial amount (the “principal”), but also on the interest earned in previous periods.

This means that if you’re prioritizing paying off your car loan with a 4% interest rate, you’re missing out on TIME that your money could instead be sitting in the stock market.

Am I suggesting that you stop paying off debt altogether?

Absolutely not!

But I am suggesting that you find a balance between paying off debt and investing. For instance, if you have any high-interest debt such as credit card debt, then I 100% believe that you should knock that out first. High-interest debt eats away at your money so fast – so get it rid of it ASAP.

But if you’re sitting here with some student loans, a mortgage, and a car loan that all have interest rates under 7%, then it might be time to send some of your extra money to investing. 

The truth is that you can’t take out loans for your retirement. And I don’t know about you, but I don’t want my kids to feel obligated to take care of me when I can’t.

All of the debt that my husband, Matt, and I had in the past had a relatively low interest rate. We focused for 4½ years on paying off our consumer debt as fast as we could. I know I can’t go back in time, but I do wish that we had started investing even when we were in debt. Even just $50-$100 each month adds up significantly over time thanks to compound interest.

If possible, find a balance when it comes to paying off debt and investing for your future.

Money Rule #3: Renting is throwing your money away.

A few weeks ago I went to a conference with two of my friends. One of my friends sent me pictures of her house in the middle of a serious home repair. The pipes in her house were busted and slowly filling her basement with water. The old home needed new pipes right away.

We were sitting at our Airbnb when she received a text from her husband. It was a picture of her kitchen. Where the sink used to be was a hole 4 feet deep. The construction crew was attempting to locate the water pipe that was causing the issue. 

At that moment she turned to me and said “I’m so glad we’re renting.”

Had she owned this home, the fix would set her back over $20,000. This story perfectly sums up the money rule that I no longer fall for: Renting is throwing your money away.

I’m a homeowner, and I can tell you that our family spends a LOT of money on our home each year. Yes, we pay our mortgage, but between taxes, unexpected repairs, landscaping, and HOA dues that keep going up – we spend a significant amount of “invisible” money each year on our home. 

There are many reasons why renting is a smart financial decision for some people.

First and foremost, renting offers a level of flexibility that you just can’t get with homeownership. If you need to move quickly for work or personal reasons, renting allows you to do that without the hassle and costs associated with selling a home.

Another big advantage of renting is the lower upfront costs. When you rent, you typically need to pay only a security deposit and first month’s rent. But when you buy a home, you often need to come up with a down payment of 20% or more, which can be a big barrier for many people.

Plus, you don’t have to worry about property taxes, insurance, maintenance and repairs, or any of the other expenses that come with homeownership.

But perhaps one of the biggest perks of renting is the lack of responsibility for maintenance and repairs. If the toilet breaks or the AC stops working, it’s the landlord’s problem to fix, not yours. Enter a collective sigh of relief here.

And finally, renting allows you to have a little more freedom and lack of commitment. You can try out different areas and housing options without having to commit to a long-term mortgage. And who knows, you may end up finding your dream home that way!

While renting isn’t for everyone, there are definitely some compelling reasons why it can be a smart financial decision. Renting does not mean you are simply throwing your money away.

Money Rules I No Longer Live By: The Bottom Line

Ultimately, I hope this helps you realize that there will come a time when your thoughts about finances and money will change. Instead of being stuck in your past beliefs, open yourself up to grow and change when it comes to how you view money.

We don’t have to live by the rules we set before we have experienced more that this big world has to offer. I personally find that so welcoming and freeing, don’t you?