The Index Card: Why Personal Finance Doesn't Have to Be Complicated

by Helaine Olen

RULE #1: Strive to Save 10 to 20 Percent of Your Income RULE #2: Pay Your Credit Card Balance in Full Every Month (and How to Deal with Other Forms of Debt) RULE #3: Max Out Your 401(k) and Other Tax-Advantaged Savings Accounts RULE #4: Never Buy or Sell Individual Stocks RULE #5: Buy Inexpensive, Well-Diversified Indexed Mutual Funds and Exchange-Traded Funds RULE #6: Make Your Financial Advisor Commit to the Fiduciary Standard RULE #7: Buy a Home When You Are Financially Ready RULE #8: Insurance—Make Sure You’re Protected RULE #9: Do What You Can to Support the Social Safety Net

Your time is valuable. Your happiness and economic security depend on your marriage, your family, your success at work and in your relationships. Investments in those areas are almost certain to pay off.

So what is adequate liability insurance? It’s at least twice the amount—and maybe more—of your net worth.

When it comes to life insurance, stick with term. When it comes to property insurance, the higher the deductible the better.

Adequate liability coverage is at least twice your net worth.