Everyone loves a good rule of thumb. Knowing that the number of cricket chirps in 15 seconds plus 37 is the approximate temperature _[1] is great . I usually do the old 100 plus my age comparison when I get my blood pressure checked as well. These ballpark estimates are easy to remember and give a close enough approximation for many things in life. Unfortunately, there are often way too many variables for a rule of thumb to be of any real value for personal finances.

There are some financial rules that are valuable, but they tend to be the ones that are math based. An example would be “Double your hourly rate and add three zeros to get approximate yearly salary.” Of course, even such a rule makes the assumption that you work 40 hours per week. These “rules of thumb” are what I generally file under Quick Calculations. They are more mathematical approximations

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The Rule of 72 is well known: Divide 72 by a rate of return to get the number of years for your money to double. Example: at 4.5% return it will take 72/4.5= 16 years to double your money

Here are a few more quick calculations:

Cost Before Taxes
Multiply an item’s cost by 1.4 to figure out what you need to earn before taxes to afford it
Example: A $250 Nintendo Wii will require 250*1.4= $350 in pre-tax earnings

Hourly Rate to Yearly Salary
Double your hourly rate and add three zeros to get approximate yearly salary
Example: at $20/hour, you make about 20*2 = 40 –> $40,000 per year

Yearly Salary to Hourly Rate
Opposite of above: Remove three zeros from your yearly salary and cut in half to get an approximate hourly rate
Example: at $60,000 per year you make about 60,000 –> 60/2 = $30/hour

Current Spending Versus Nest Egg Worth
Add a zero to the cost
Example: Using $2,000 for a new computer today would have been worth 2,000 –> $20,000 in a retirement account 30 years from now.

Calculations assume a 40 hour work week, 8% investment return, and 28% tax bracket.