(Smart Money) — Never borrow against a 401(k) . Avoid credit cards. Make a bigger down payment on your home or apartment to avoid paying extra mortgage interest. These are among the tried-and-true financial rules consumers have been told to live by for years. But now – with interest rates still low and credit staging a comeback – might be a good time to break them. This solid financial advice isn’t suddenly all wrong, but many of these axioms no longer result in higher savings or less debt. That’s because the economic recovery has opened up more exceptions and loopholes to standard advice, says David Peterson, president of Peak Capital Investment Services, a financial planning firm. Advisers, for example, typically discouraged clients from taking a loan from their 401(k) – but this is now the cheapest way to borrow money, with the average rate at 4.25%, lower than most personal loans, to pay back debt they racked up during the recession. But as some parts of the economy have improved — equities are once again outperforming fixed income, banks are slowly returning to lending, and consumers are spending more — the rules for making and saving money are changing, at least temporarily. Here are four traditional money rules you can break—at least for now.
