March 2016

Consumer Voices on Financial 

Rules to Live By 
1 CONSUMER VOICES ON FINANCIAL RULES TO LIVE BY

About CFPB Research, Tools, and Resources for Financial 

Educators

An essential part of the mission of the Consumer Financial Protection Bureau (CFPB or Bureau) 

is to empower consumers to take more control over their financial lives. Since the Bureau 

opened its doors in 2011, we have worked to improve the financial literacy of consumers in the 

United States and to ensure access to tools, information, and opportunities for skill-building 

that they need to manage their finances. 

The Bureau’s principal financial education mandate is set forth in the Dodd-Frank Wall Street 

Reform and Consumer Protection Act (Dodd-Frank Act). The Dodd-Frank Act created the 

Bureau and mandated the establishment of an Office of Financial Education to “be responsible 

for developing and implementing initiatives intended to educate and empower consumers to 

make better informed financial decisions.” 12 U.S.C. § 5493(d)(1). 

To better help consumers make well-informed financial decisions and achieve their own life 

goals, we at the CPPB have sought to increase understanding of three broad areas: consumer 

financial behavior, the financial education field, and effective practices in financial education. 

We conduct research in these areas to inform the CFPB's own financial education efforts and to 

share our insights with others who have a common interest in improving the financial wellbeing of consumers. 

The CPFB's goal for its financial education activities is to help consumers move towards 

financial well-being. In the CFPB's definition of financial well-being, consumers:

 have control over day-to-day, month-to-month finances

 have the capability to absorb a financial shock

 are on track to meet financial goals, and

 have the financial freedom to make choices that allow one to enjoy life

To learn more, visit the Resources for Financial Educators webpage at 

http://www.consumerfinance.gov/adult-financial-education

To get regular updates on CFPB research, tools, and resources for financial educators, sign up 

for the CFPB Financial Education Exchange (CFPB FinEx) by emailing CFPB_FinEx@cfpb.gov.
2 CONSUMER VOICES ON FINANCIAL RULES TO LIVE BY

Table of contents

About CFPB Research, Tools, and Resources ........................................................1

Table of contents.........................................................................................................2

1. Introduction...........................................................................................................3

2. About the focus group approach ........................................................................7

3. What we heard in the focus groups ....................................................................8

3.1 Rules of thumb for savings .......................................................................8

3.2 Rules of thumb for spending and budgeting......................................... 111

3.3 Rules of thumb for debt.......................................................................... 12

3.4 Other rules of thumb .............................................................................. 13

3.5 Sources for rules of thumb...................................................................... 13

3.6 How people make financial decisions and how rules of thumb fit in.... 14

3.7 Lack of universality................................................................................. 14

4. Challenges in Consumer Use of Rules of Thumb..........................................166

4.1 Situational financial hardship .............................................................. 166

4.2 Pulled off track by others.......................................................................177

4.3 Fear of missing out ................................................................................177

5. Conclusions and Implications...........................................................................18
3 CONSUMER VOICES ON FINANCIAL RULES TO LIVE BY

1. Introduction

Consumers face a daunting set of tasks and decisions in managing their financial lives. These 

choices range from daily low-stakes decisions such as whether to buy a cup of coffee, to 

infrequent high-stakes choices related to homeownership and car purchases. The wide array of 

financial decisions to be made -- around savings, bill paying, use of credit and debt, choice and 

use of financial products, retirement, housing, and more -- can be overwhelming to many 

consumers. The range of choices available in today's complex financial marketplace adds to the 

challenge.

Financial educators face a dilemma in helping consumers navigate these complicated financial 

choices. Often, financial education offers detailed information on how to make the most 

appropriate and optimal financial choices for each consumer’s unique situation. The research 

on the ability of such financial education to improve knowledge, and do so in a way that it is 

retained and applied by consumers, is mixed at best.1

In response, financial educators have been exploring approaches that attempt to make the 

decision-making process easier for consumers, in situations where this is appropriate. For 

example, approaches that reduce the cognitive demand on consumers – such as reminders, 

 1 Fernandes, Daniel, John G. Lynch, Jr., and Richard G. Netemeyer. “Financial Literacy, Financial Education, and 

Downstream Financial Behaviors.” Management Science. 60(8) (2014): 1861–1883
4 CONSUMER VOICES ON FINANCIAL RULES TO LIVE BY

simplifying choices, and reducing the “hassle factor” of making good decisions – have been used 

successfully by financial educators.2 

One example of this approach is emphasizing financial rules of thumb. In many domains, 

people may use rules of thumb in making complex decisions. Research on decision-making has 

explained how people use simple, easy-to-implement shortcuts (also called heuristics)3 in 

managing day-to-day as well as infrequent decisions. Rules of thumb can be defined as specific, 

actionable guidelines consumers can apply to their decisions. These rules may be consciously or 

unconsciously held, but their simplicity can make them easy to apply and recall when needed. 

For financial educators and others who help people with decision-making, there is evidence that 

providing financial rules of thumb to consumers can work better than more detailed and 

complex financial education in some situations. One study found training in simple, practical 

rules of thumb resulted in significantly improved financial practices among microentrepreneurs relative to traditional financial literacy training.4 Other evidence is more mixed; 

for example, a recent study showed that training in traditional financial education and in 

financial rules of thumb did not differ markedly in outcomes around financial knowledge and 

self-efficacy.5 

One possible drawback is that rules of thumb may be prone to errors relative to more involved, 

information-laden decision processes. There may be a tradeoff between the ease of using rules of 

 

2 See, for example: Karlan, Dean, Margaret McConnell, Sendhil Mullainathan, and Jonathan Zinman. “Getting to the 

Top of Mind: How Reminders Increase Saving,” forthcoming in Management Science and Hernandez, Mindy. 

“Applying Behavioral Research to Asset Building Initiatives.” Corporation for Enterprise Development (2011).

3 A heuristic can be defined as a useful principle having wide application but not intended to be strictly accurate or 

reliable in every situation. It may be used to speed up the process of finding a satisfactory solution, or as a mental 

shortcut to ease the cognitive load of making a decision. See Gigerenzer, G. & Gaissmaier, W. (2011). "Heuristic 

Decision Making." Annual Review of Psychology. 62:451-92.

4 A. Drexler, G. Fischer, and A. Schoar, “Keeping It Simple: Financial Literacy and Rules of Thumb.” Centre for 

Economic Policy Research, CEPR Paper 7994.

5 Skimmyhorn, William L., Brian Mitchell, Evan R. Davies, and David Mun. 2015. “Assessing Financial Education 

Methods: Principles vs. Rules-of-Thumb Approaches.”
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thumb and the quality of the decisions made, especially as the decision complexity increases.6 

However, an argument can be made that most real-world decisions are made with limited 

information, and empirical evidence has shown that in certain circumstances, rules of thumb 

can produce accurate judgments at low cost.7 

To further explore the potential of rules of thumb for financial education, we conducted focus 

groups with consumers to learn more about financial rules of thumb. 8 We wanted to explore 

what they know about and how they use rules of thumb, and how useful rules of thumb are in 

guiding positive financial behaviors. 

In brief, we found that consumers in the focus groups interpreted the term “rules of thumb” to 

include a broad array of financial goals and aspirations, common financial advice, and specific 

rules of thumb. Many of these do not meet the academic definition of “rules of thumb” of being 

specific, actionable guidelines. We report on the full array of ideas shared by consumers, as 

consumers were given latitude on what they considered “rules of thumb” in their own lives.

We also found that there is a gap between rules of thumb and actual behavior, suggesting that 

popular financial wisdom may be seen as something to aspire to rather than to act upon. 

Moreover, finances are complicated and individualized, and the “right” decision can vary by 

person and circumstance, making highly generalized, one-size-fits all rules difficult to define 

and apply appropriately.

These findings suggest that common financial rules of thumb are fairly widely known among 

many consumers. These rules are helpful in shaping consumers’ financial goals, and appear to 

work in some domains and have some role in financial decision making. To make rules of thumb 

 

6 A. Shah, and D. Oppenheimer, “Heuristics Made Easy: An Effort-Reduction Framework.” Psychological Bulletin 137 

(2008): 207–222; J. Payne, J. Bettman, and E. Johnson, The Adaptive Decision Maker (New York: Cambridge 

University Press, 2008).

7 G. Gigerenzer, and W. Gaissmaier, “Heuristic Decision Making.” Annual Review of Psychology 62 (2011): 451–482.

8 Abt Associates conducted this research under contract with the CPFB.
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a more effective tool, these findings suggest that financial educators can help consumers develop 

and adjust their own rules – rules they themselves can live by.
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2. About the focus group 

approach

Focus groups are a valuable way to understand the common opinions, beliefs, and values that 

consumers hold, as well as how wide their experiences may range. Focus groups are not 

intended to give us statistically significant data that can be generalized to all consumers. 

However, they can give us valuable qualitative information about what consumers think and feel 

in general.

In summer 2014, we listened to 308 consumers who participated in 32 focus groups we held in 

four cities—Boston, St. Louis, Atlanta, and Seattle. We also conducted one focus group in Boston 

with credit counselors who work directly with consumers who are making financial decisions. 

The consumers were selected to represent a variety of experiences with financial decisions. 

Though the consumers we talked to represented a demographically diverse group, they were not 

statistically representative of the overall population. These focus groups give us insight into the 

views of certain types of consumers but should not be seen as representing the thoughts or 

experiences of all consumers. 

In summary, the information we have gathered through these focus groups is intended to inform 

financial education efforts, and not to give us a full picture of consumers’ use of financial rules of 

thumb. The findings below should be read with that focus in mind.
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3. What we heard in the focus 

groups

During the focus groups, we asked participants about their thoughts on financial rules of thumb. 

They articulated a wide range of general principles, aspirations, and actionable guidelines. Most 

of these guidelines tended to be high-level principles of which participants were aware but not 

necessarily applying in their own lives, for various reasons discussed below. 

Our focus groups also elicited a range of accounting and financial habits that are internalized 

and automatic. Some of these conform to standard financial advice while others do not. Most of 

the discussions focused on saving, debt, and spending. 

Additionally, we asked consumers in the focus groups about the sources of their rules of thumb 

and if they were able to implement them in their daily lives. We also explored whether they 

thought their rules of thumb could be applied universally or were more situational. We discuss 

each of these topics below. 

3.1 Rules of thumb for savings

The most common rules of thumb mentioned by consumers in the focus groups related to 

savings. Different rules applied to different types of savings. 

3.1.1 General savings

The most common phrase participants used to describe a savings habit was “pay yourself first.” 

By this, people meant some variation of “put something in savings from every paycheck.” When 

pressed to name the single most important rule of thumb they could follow, participating 

consumers resoundingly chose this rule.
9 CONSUMER VOICES ON FINANCIAL RULES TO LIVE BY

Often, consumers’ everyday habits stood in contrast to their own aspirational goals. For 

example, although focus group consumers felt that the “pay yourself first” rule of thumb was the 

single most important financial advice to follow, many said that they did not in fact do this on a 

regular basis. 

While there was a general consensus among consumers in the focus groups that everyone should 

save something, there was much less agreement about how much people should save. 

Consumers in the focus groups offered rules of thumb on saving from $5 a day up to 50 percent 

of one’s income. For almost every savings rule suggested in focus groups, some participants 

voiced objections that the rule was unrealistically high.

A savings goal of 10 percent of one’s income was the rule most participants were aware of.9 This 

message seems to have been presented by a wide range of influencers in consumers’ lives.

Some consumers in the focus groups discussed how their parents tried to instill savings habits in 

them by encouraging them to save as much as half of their paychecks as teenagers. However, few 

were able to continue saving as much of their incomes once they reached adulthood, even if they 

agreed that it was a good rule.

In fact, while many participants articulated ambitious savings goals, many also acknowledged 

that it was difficult for them to live up to these goals. The focus group discussions revealed that 

as much as consumers are aware of rules of thumb for saving, they are only aspirational for 

many consumers. Many focus group participants stated that they just did not have the money to 

practice their savings aspirations.

Although some consumers in our focus groups spoke strongly and clearly about how they meet 

their savings goals, many others expressed feelings of inadequacy about their savings, whether it 

was in relation to their own rule of thumb or one circulated in professional financial advice.

 

9 It was unclear if this referred to a percentage of their take-home pay or of their gross pay.
10 CONSUMER VOICES ON FINANCIAL RULES TO LIVE BY

3.1.2 Saving for the unexpected

Some consumers in the focus groups earmarked their savings for emergencies or unexpected 

events in their lives. They classified these types of savings as either “emergency savings” or 

“rainy day funds.” 

Much as participants had a wide range of rules of thumb for the percentage of income people 

should be saving, they also had a wide range of options regarding how much people should keep 

in a rainy day fund. Consumers offered guidelines based on fixed amounts (e.g.: $1,000) to 

several months’ worth of living expenses (generally ranging from 3 – 12 months). 

Several consumers in the focus groups specifically mentioned “the envelope system” of 

physically storing savings in envelopes. The physical evidence of watching their savings 

accumulate provided them with both a clear sense of satisfaction and a greater sense of control 

against spending funds that were co-mingled with other funds in a general transaction account. 

As with general savings, most consumers in the focus groups were far from achieving the rule of 

thumb they had anchored in their minds for an emergency fund. The longer the recommended 

period of time they thought an emergency fund should cover, the more consumers felt they fell 

short. 

Some consumers in the focus groups were skeptical that people who don’t “make a lot of money” 

could amass a meaningful emergency fund. The recommendation of having three to six months 

of expenses in savings seemed far-fetched to some. 

Even focus group consumers who were conscientious savers struggled with the recommended 

guidelines they had set for themselves for emergency savings. 

3.1.3 Saving for retirement

Rules of thumb for retirement generated the most agreement. The refrain “take the free money!” 

came up dozens of times as focus group consumers extolled the benefits of employers’ 401(k) 

and 403(b) matching contributions. Yet, even within that general consensus, there was some 

confusion and disagreement about how and when to put rules for saving for retirement into 

practice. 
11 CONSUMER VOICES ON FINANCIAL RULES TO LIVE BY

When discussing employer-sponsored retirement plans, focus group consumers suggested 

contributing enough to receive the maximum employer match. However, a few argued that 

making a retirement contribution that received the maximum employer match was not always 

practical, especially for workers just starting out who may have large student loan debt 

obligations or who have competing priorities. 

Other focus group consumers noted the tradeoff that they face between saving for their own 

retirement versus saving for children’s education.

Some consumers in the focus groups noted the mistakes they thought they had made in the past 

regarding saving for retirement. Generally, these focus group consumers regretted not saving for 

retirement when they were younger and now are trying to make up for it. 

3.2 Rules of thumb for spending and 

budgeting

Like rules of thumb for saving, many rules of thumb for spending described by consumers were 

broad principles, not linked to concrete steps to take in day-to-day life. 

Most of the focus group conversation regarding rules for spending centered on the importance 

of living within one's means and spending money on needs rather than wants. The consumers 

we talked to recalled phrases, such as, “live within your means,” “separate your wants and 

needs,” “don’t spend more than you make,” “don’t spend more than what you have,” “don’t 

spend money you don’t have,” and “put priorities before desires.” A small subset of consumers 

said you should “live below your means.”

Focus group consumers also discussed the pressures of trying to keep up with peers on spending 

and comparing themselves to others. While the majority of focus group consumers agreed that 

you should “live within your means,” a few thought that people were entitled to “live a little” 

sometimes. Most who voiced the desire to “live a little” also acknowledged they had to be careful 

with their money and budget. 

The topic of budgeting often came up when discussing rules of thumb for spending. Consumers 

in the focus groups expressed mixed feelings about budgeting. Some were very proud of the 
12 CONSUMER VOICES ON FINANCIAL RULES TO LIVE BY

work they put into their budgeting, whether it was using a spreadsheet they created or an online 

tool. Other focus group consumers were less interested in keeping a formal budget. 

Some focus group consumers explained that they apply the “left over” method to determine how 

much they have to save or spend. With this approach, they factor in all their bills for the month 

and then allocate whatever money is “left over” for savings or disposable spending. 

3.3 Rules of thumb for debt

Consumers in our focus groups articulated relatively few rules of thumb regarding debt aside 

from a generalized desire to be debt-free. For those with debts, there was little agreement on 

guidelines about appropriate levels of debt and how to manage it. A majority of focus group 

consumers categorized debt between “good” debt and “bad” debt.

While there was not full agreement about what kind of debt fell into each category, focus group 

consumers tended to define good debt as debt someone incurs with the hopes that the item or 

action will put the person in a better position in the future. By contrast, they generally described 

bad debt as a debt someone incurs when they have no other means of paying for an item. 

Generally, focus group consumers identified mortgages and student loans as a “good” debt and 

credit card debt as “bad” debt. However, there were many who expressed mixed feelings about 

debt, the amount of debt to incur, and when to incur debt.

3.3.1 Mortgage debt

Mortgage debt was the primary kind of debt focus group consumers were willing to acquire and 

comfortable with incurring. They explained this reasoning by stating that “a house is supposed 

to gain value.” However, this confidence was not universally held.

3.3.2 Student debt

Focus group consumers also had mixed feelings about student loan debt. Some thought that the 

education would enhance their career possibilities and pay for itself in the long-run, while others 

expressed a negative sentiment towards student loans.
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3.3.3 Credit card debt

Focus group consumers generally expressed that incurring debt on credit cards is “bad” but 

sometimes unavoidable. The general rule of thumb for credit cards shared by focus group 

consumers was to “stay away from them.” The focus group consumers based their opinions on 

the use of credit cards based on their past experience. They noted that if you did incur credit 

card debt, you should pay the balance as soon as possible and “pay down the highest interest 

before you pay off the lower interest balance.” Alternatively, some participants espoused paying 

off the smallest debt first.

3.4 Other rules of thumb

Consumers in the focus groups who introduced rules of thumb for housing costs usually had a 

general awareness of a recommended maximum amount to spend on housing but were not 

certain what the correct amount was. Most focus group consumers who discussed rules of 

thumb expressed the rule of thumb for housing costs as a percent of their income, with common 

responses of approximately 25 to 35 percent. 

The consumers in our focus groups did not discuss rules of thumb on investing at great length. 

When the topic of investing came up, generally, consumers thought that those who invest should 

be attentive to the amount of risk that they were taking. 

3.5 Sources for rules of thumb

Focus group consumers shared that they learned about financial rules of thumb through various 

mixtures of parental influence, trial and error, and what they have heard in the financial media. 

Most consumers in the focus groups described learning both broad financial guidelines as well 

as specific money management techniques from their parents. In some cases, focus group 

consumers learned positive rules of thumb from their parents and families, while other 

consumers tried to develop different approaches to avoid making what they described as the 

same mistakes that their parents made. 
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Many focus group consumers also shared that they had developed rules of thumb themselves, 

based on financial experiences and mistakes from their own lives. 

In addition, many focus group consumers also said they had learned new rules of thumb from 

popular financial media personalities, as well as general media sources like newspaper columns 

and books.

3.6 How people make financial decisions 

and how rules of thumb fit in

It was unclear how many focus group consumers had changed their behavior by learning about 

and adopting a new rule of thumb. The focus group discussions suggest that many participants 

generally make financial decisions in a reactive manner, responding to financial situations 

presented to them rather than proactively using rules of thumb to do things like set up their 

budgets or make new financial decisions. The findings from the focus groups suggest that 

participants were most likely to make changes to their behavior in response to a significant 

financial life event. 

However, some focus group consumers appeared to exhibit more of a proactive stance when 

discussing saving for retirement, their children’s education, or a buying a house. The findings 

suggest that consumers seem to be able to act on rules of thumb more when planning for their 

future and less often for day-to-day decisions. 

In some cases, consumers in the focus groups had difficulty articulating why specifically they 

make the kind of financial decisions they do. Focus group discussions pointed to the fact that at 

least some of people’s financial behaviors are so deeply engrained so as to be almost automatic. 

Some focus group consumers were forthright that the “rules” guiding their behavior were tied to 

emotional cues to do what “feels right,” rather than specific quantifiable financial guidelines.

3.7 Lack of universality

The consumers in our focus groups, while generally agreeing with many of the broad rules of 

thumb, expressed some doubt about the applicability of many of the rules to most consumers. 
15 CONSUMER VOICES ON FINANCIAL RULES TO LIVE BY

When asked directly, few of the focus group consumers said that there were universal financial 

rules of thumb that would apply equally well to all individuals. Those who did modified the rules 

of thumb such that they were endorsing general principles rather than specific behaviors. Some 

consumers agreed with certain principles, for example, that saving is important, but would not 

attach a number, an amount, or a percentage to the principle. 

For example, many focus group consumers emphasized that the levels of savings suggested by 

rules of thumb are not necessarily appropriate or possible by everyone, depending on their 

circumstances. One participant described how she tried to follow a rule of thumb to save 20 

percent of her income but repeatedly fell short of that benchmark. Instead, she finds it more 

reassuring to have a lower savings goal she is sure she can meet every month. The positive 

reinforcement of reaching her goal keeps her more motivated than the abstract rule of thumb 

she heard was supposed to be the “correct” amount to save.

The focus group findings suggest that rules of thumb should be tailored to the needs of specific 

segments of the population or, in some cases, customized to individuals’ specific circumstances, 

in order for them to be actionable for individuals in their day-to-day financial choices.
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4. Challenges in consumer use 

of rules of thumb 

We identified several types of challenges among focus group participants in sticking to rules of 

thumb, and delved into consumer perceptions and motivations behind these challenges.

4.1 Situational financial hardship

Some consumers we talked to faced financial hardships that made rules of thumb difficult to 

implement. Some of these focus group consumers strongly believe in a certain financial 

decision-making rule of thumb and want to implement the rule in their own lives. However, 

they believe their current situation prevents them from doing so.

Many of these focus group consumers discussed difficult life circumstances such as an 

unanticipated unemployment spell or the extended illness of a child. They felt that these 

hardships prevent them from saving 10 percent of their income, for example, because they had 

no disposable income to save. Some focus group consumers also reported that they do not follow 

their own rule because they are not in the life stage when the rule is applicable.

Some focus group consumers adjusted the rule to work for them. For example, individuals who 

were not able to save 10 percent might have compromised by saving 5 percent. Other focus 

group consumers who felt they cannot follow the rule simply gave up. Instead of seeing a 

potential middle ground, these individuals chose to save nothing.
17 CONSUMER VOICES ON FINANCIAL RULES TO LIVE BY

4.2 Pulled off track by others

In households with more than one financial decision-maker, some focus group consumers 

expressed that they felt frustrated by instances where their partners’ financial behaviors and 

values do not align well with their own. Many of these focus group consumers said they believed 

that they have figured out effective financial rules of thumb but that their partners do not follow 

the same rules. The misalignment can cause conflict within the household, and these consumers 

reported needing to adjust their rules to account for the influence of their partners.

Focus group consumers also discussed ways in which children can make following rules of 

thumb difficult. We heard many consumers say they felt their children often asked for 

expensive, brand-name items that they could not afford to purchase. Some focus group 

consumers explained how they co-signed loans for their children, bought multiple cars for them, 

or simply gave them large sums of cash to spend at the mall. These focus group consumers 

discussed the difficulty of saying no and not providing what their children wanted. 

4.3 Fear of missing out

Some focus group consumers shared that they felt they were being pulled by opposing forces in 

their culture. These consumers told us that they understood the importance of saving, reducing 

debt, and controlling their spending. On the other hand, they noted that they felt the need to 

“keep up with the Joneses.” Many of these consumers said they faced substantial pressure to 

“live in the moment.” These consumers expressed worries that they felt they would miss out if 

they followed common financial rules of thumb. 
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5. Conclusions and 

Implications

The focus group findings suggest that many consumers are aware of and interested in rules of 

thumb to help them make financial choices. However, many of these consumers also face 

difficulties in acting on these rules. 

Most consumers in our focus groups expressed that pre-specified rules of thumb are not 

appropriate or applicable for everyone. Additionally, when rules of thumb are applicable, they 

still need to be tailored to an individual’s circumstances and life stage. Focus group consumers 

explained that what a person saves, spends, and invests has to be based on circumstances in life. 

In reality, what people seem to have is a blend of aspirations and general guidelines that 

motivate some but demotivate others.

In summary, the focus group findings suggest the following conclusions about rules of thumb 

and financial decision-making:

 Many consumers know about common financial rules of thumb. 

 Many are frustrated by what they see as unrealistic goals stated in common rules, as they 

struggle with competing priorities across many different dimensions of their financial 

lives. 

 There is a sense that financial rules cannot be applied equally to all people in all 

circumstances. But many commonly held rules are too broad or ill-defined to offer clear 

guidance to anyone.

 Consumers are most likely to change their financial behaviors when they are confronted 

by major changes in their lives or financial trigger events. 
19 CONSUMER VOICES ON FINANCIAL RULES TO LIVE BY

 Where they apply rules at all, consumers seem to rely on them to guide savings and other 

planning-related financial decisions more than for day-to-day financial tasks. 

 People learn rules of thumb from families and other trusted relationships, personal 

experience, and the financial media. 

On their face, financial rules of thumb hold promise, as they can be memorable, easy to learn, 

and easy to communicate. But, in the area of financial decisions, finding broadly applicable rules 

of thumb that people actually follow may be challenging.

These findings suggest some considerations and implications for financial educators and others

working with consumers on financial decisions, such as:

 Financial rules of thumb need to be realistic and achievable to be utilized. 

 Financial rules of thumb may need to be flexible and customized to take into account the 

many dimensions of one’s financial life.

 A promising strategy for financial educators is to work with consumers in developing 

their own financial rules of thumb customized to their personal situation – what we call 

“financial rules to live by.”

 Moments of crisis such as unemployment, unexpected medical bills, or emergency home 

repairs may be the most promising times to encourage consumers to adopt new financial 

rules of thumb into their lives.

In conclusion, our findings suggest that helping consumers to customize rules of thumb for their 

own situation – or “financial rules to live by” – holds promise as a financial education strategy. 

Coupled with complementary types of financial education and other types of decision-making 

supports, financial rules to live by can be an important tool for financial educators in helping 

consumers take more control of their financial lives.

The CFPB has developed resources to help consumers and financial educators develop and use 

financial rules to live by; see the financial educators digest and the consumer worksheets on

financial rules to by for savings, credit reports, and spending. These and all of CFPB’s tools and 

resources can be found on the Resources for Financial Educators webpage at 

www.consumerfinance.gov/adult-financial-education.