New Delhi, April 9 -- When it comes to money, Indians love rules of thumb. From age-old wisdom about gold being the ultimate store of wealth to modern investment shortcuts like the '100-minus-age' rule for equity allocation, heuristics help simplify complex financial decisions. These mental shortcuts are useful but not foolproof-sometimes, they can lead to costly mistakes. The key is knowing when to use them and when to be cautious.

Heuristics in everyday financial decisions

We can think of our monthly income as a meal of plate where 50% is covered with essentials like rice, proteins and veggies; 30% is for something that you enjoy but is not necessary, like desserts, drinks, etc.; and the remaining 20% for leftovers to be used next day...