5 Personal Finance Rules (With A Viking Twist!)

  •  In this article we cover “rules of thumb” for 5 major categories of finance.
  • Housing
  • Cars
  • Food
  • Investing
  • “Stuff”
On the quest to conquer your financial freedom like a strong Money Viking, it is helpful to use general rules of thumb or benchmarks. These are broad calculations and rules financial experts and those achieving financial independence recommend in order to:
  1. Live in a position of financial strength
  2. Grow wealth over time
  3. Secure a comfortable retirement
  4. Potentially reach early retirement
Therefore, in our opinion, here are 5 personal finance rules that we live by. These are a hybrid of common rules that come from many great minds in the world of personal finance and our own personal take. The real challenge and test here will be to try and beat them to save/invest even more. Generally speaking, these rules are meant to address the two main factors in building wealth: decreasing liabilities and increasing assets.  


Ah yes, housing. You know, if we all had housing addressed (a paid off house) then we really wouldn’t need to make that much. But land and structures are expensive things. And, modern life certainly beats living in stick huts. Life can get pretty brutal by living among the elements. Therefore, we need to purchase housing. If you are just starting out in your career and are young, it’s best to find the cheapest accommodations you can find. If this means room mates, do it! Perhaps you can squeeze into a small space. I rented the smallest apartment available and at one point within walking distance of my job. At this age, this allows you to not go into further debt and start saving those initial seedling amounts for future investments. It also allows for the saving of a down payment, etc. Things typically get a bit more complicated in your 30’s and 40’s. By this time you might have a young family. You will be focused on more space, good schools and a safe neighborhood. All those things come with a cost. But how much?   RULE: Spend no more than 30% of gross (total before taxes) income on housing. Up to 40% if you have no debt. From the Federal Housing Association guidelines.  

Here are some examples:

$60,000 Income, $5,000 gross monthly income, Mortgage should be between $1,450-2,050 (the high end if not much other debts)   $80,000 Income, $6,667 gross monthly income, Mortgage should be between $1,933-$2,391 (if not much other debts)   $100,000 Income, $8,333 gross monthly income, Mortgage between $2,417-$3,417 (if not much other debts) In some parts of the country this is manageable and in others it can be very difficult given the high cost of housing. The main point is to at least stay within these targets, but as always try to beat them.

Housing hack

A very successful strategy I have seen deployed over the years is to buy a duplex or rental property with several units. In other words, rent out the others to pay for your housing. However this comes with its pros and cons, but from a financial perspective it can be very helpful. Related: See our previous article on ideas to LIVE MORTGAGE FREE.  


Oh cars, the great destructors of wealth. Our love affair with car ownership is a net worth destroyer. I realize that most of us need one. Because there are just not always great public transportation options for many people. My life in a large US city with a lot of mileage around would be much more challenging without a car. But we have to be very careful about how much we spend. Because an automobile is a huge depreciating tool in terms of our finances.   RULE: One rule of thumb is to buy a middle of the road, gently used, safe model and drive it for at least 10 years.   I am not even pegging any incomes to this rule of thumb because in general cars are a drag on all incomes. And typically, when people start making more money, they go for the fancy luxury auto with the very high cost of ownership. I am talking about the 2-3 year old Honda Accord, Toyota Camry, Subaru Outback, Honda Odyssey etc., Ford, Chevy, you get the idea. And drive it as long as safely possible. Another tip is to try Jerry’s method and rock out with the ROLLING YOUR OWN SOLAR & DRIVING AN ELECTRIC VEHICLE. If you grab one of these electric vehicles, charge it with free solar power, you will save gallons of gas money as well.  


Food is an important category of spending to pay special attention to. But not why you may think. In my opinion, food is a balancing act because it is such a great natural pleasure of life and the right food keeps us strong, healthy and productive. These things are wealth producers. In other words, I am not a big fan of the whole buy the cheapest junk food you can find at the grocery store using coupons. Don’t get me wrong, I love coupons, but some target you towards junk. Typically all the junk on shelves is in the middle of the store. This stuff is poison for us and it’s cheap because it can sit on a shelf for eternity. Americans spend on average 14% of their income on food. Let’s run some estimates: Make $50,000 income, average $7,000/year on food, or $583/month   Make $70,000 income, average $9,800/year on food, or $816/month   Make $90,000 income, average $12,600/year on food, or $1,050/month   My family spends under the average each year for food. Here is our rule of thumb and it is not based on numbers but more on a philosophy and habits:   RULE: First of all we like the Michel Pollan rule of thumb for food: Eat real food (not processed junk), not too much, and mainly plants. We do eat meat, but try and emphasize vegetables as much as possible.  
  • Cook at home as much as possible. Buy as many real healthy foods as possible at the store.
  • Opt for fast casual (healthy-ish) take out. This lowers the cost. Use up leftovers to maximize costs and save time. Use discounts and coupons if possible.
  • Try to save the restaurant meals for special occasions. High price, high tips, usually involve expensive drinks.


  Most of us will really never make enough to save enough for financial freedom. Even an above average salary can be eaten up pretty quickly just trying to make the current bills. So is there hope? Yes! It is called investing in passive income machines. In other words, we need to find ways to have our money (capital) invested in income producing vehicles. The ideal would be to live off the interest and income that is produced from these various investments. Therefore invest in high quality assets like stocks, bonds, index funds, Real Estate Investment Trusts, etc.   RULE: Save & invest at least 8-15% of your salary, consistently every paycheck. Do not touch the money so that it has the advantage of time and compounding.   I realize this is the standard advice given by most financial planners. If you are on a path to financial independence early retirement (FIRE) then you really need to step up the savings and investing game. Folks in the FIRE community make dramatic lifestyle choices compared to the average American in order to save 20%, 30%, 40%, 50% or more of their income. Saving this much so quickly allows the investment returns to really start growing on top of each other. As an example,   Someone who makes $70,000 saves a very respectable 10% saving rate at $7,000/year. Assuming a 7% annual return, at 20 years that person would have a healthy $300,000 in their investment account.   If the same person is able to reach a 20% savings rate, that would equate to $14,000/year in investing. That results in a $600,000 nest egg after 20 years.   RELATED: VANGUARD 101  


  Yes, we have a whole category called “stuff”. This is all that other stuff we buy and fill our physical lives with, some of which we need, and other stuff we do not. This includes but is not limited to:  
  • clothes
  • furniture
  • toys & games
  • Kitchen supplies
  • housewares
  • decorations
  • etc.
  RULE: Buy used when possible. Try not to buy too much.  Try not to put it on credit. Do not pay to store it. Try and think before you buy.   If you watch the Marie Kondo show “Tidying up” you will see that we all have way too much stuff. See related: Applying The Konmari Method To Our Finances I try and use the above mentioned rules of thumb. If I can buy it used that drastically reduces the costs. I try to only buy what we really need. I despise putting “stuff” on credit and paying interest. If you do put it on credit, make sure it is paid off quickly. Paying interest on stuff is a huge waste of money, especially because we can usually wait to have stuff. And finally, think about the purchase instead of doing an impulse buy.


As you may have noticed, not all our rules of thumb have percentages or exact dollars attached. That is because each families situation is unique. These “rules” are somewhat based on philosophies and best value practices that work for us.     

2 thoughts on “5 Personal Finance Rules (With A Viking Twist!)

  1. Great points! It’s housing that can really getcha. We all see these fancy homes people live in on TV and think we need one too. Then we buy a house that is much larger than we need and then we have to fill it up with stuff. I’ve made that mistake and am trying to get out from under it now… it sucks! Wish I would have read this 13 years ago 😉

    1. Hey, it is never too late and we all make little errors. I am fascinated by the small home movement, but have not made that one happen. Plus a bit unpractical with a family. But, I certainly do not need a huge McMansion. A nice solid 1,900-2,300 sq. ft for a family and done! Thank you for your comment! I love The Dividend Pig site, lots of great intel for the dividend strategy!

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