So, everyone is out here telling people they “should do this” and “should do that”, and most people DEFINITELY do not like unsolicited advice, especially financial advice.
In my opinion, it is even worse when it is bad advice. As a reminder, personal finance is personal but here is a list of bad financial advice you should ignore.
1. You have to buy a home instead of renting
This is wrong for many reasons.
In some places it is cheaper to rent instead of purchasing a home. Some people will say you are “throwing away your money” but when you have NONE of the headaches of homeownership, is that really true? Owning and maintaining a home has a lot of additional costs and things you have to worry about.
One time I saw someone comment that “you cannot really make an apartment your own”, and maybe you cannot take down walls but let’s be real, there are more than enough TikToks and Pinterest pins out there to show you how to make changes that will still get you your security deposit back.
I think 40-50-60 years ago this may have been the case, but nowadays there are so many factors to take into account including income, lifestyle, short-term & long-term goals. Buying a home is 100% not one-size-fits-all.
We recently bought our forever home (a 24 acre farm) and we saved for 3 years. It was a very strategic decision, and I ran many mock budgets to decide what was best for us. I don’t regret buying a home, but it is 100% okay if that is not what is best for you (don’t let anyone shame you into buying a home you don’t want).
2. You should not invest until you are debt free
Say it with me COM-POUND IN-TER-EST.
Should you get rid of debt as quickly as possible? Yes. However, the power of compound interest should not be dismissed. You also need to look at your specific finances! If you are paying on a debt with a very very low interest rate, then there is potential for you to be making more money investing versus paying off debt as fast as you can (there is any entire investing module in Flourish FinanciALLI so you can decide what is best for you)
If your company offers a company match for your 401k, you should 100% be contributing at least to the match. Don’t miss out on that. It is free money. One of the smartest financial decisions I made was contributing to my company match right out of college.
3. You can’t pay off debt, save, and spend at the same time
Not allowing yourself Starbucks or a new book is not the answer.
Burnout is real and can end up being more costly than just budgeting for things that make you feel good. If you truly cannot afford something you should not buy it, however, if you are paying your bills, have a plan to pay off debt and save, you should also include “fun money” in your budget for whatever it is that you enjoy.
There might be some wants you have to wait a few months to save up for but it doesn’t mean you can’t have it. Of course, I am not recommending you just spend $500 you don’t have at Target. But I know if I could pay off six-figures of debt while still saving for a house, investing for retirement, and spending money on things I care about…you can too.
If you need help creating a realistic financial plan you can actually stick to, make sure to join my signature program, Flourish FinanciALLI.
Telling yourself you have to wait x amount of time before you can “live your life” is nonsense. Yes, the goal here is so to be financially secure so you can live the life you want, but these goals are harder to stick to if you also miserable now.
4. College is always worth the student debt
This is the lie they sell you.
Do you know how many people are out there walking about with $60k bachelor degrees or $80k masters degrees that are working for $15 an hour? Those same people could have also gone to a trade school for a fraction of the cost and came out a plumber or an electrician who can charge $150 diagnostic fee.
I am not saying that college is bad or that you should not go. But it is not for everyone and there are other options that might be better. My husband ended up with over $100k of student loans and didn’t even graduate. We ended up cash flowing trade school a few years ago and he is actually doing what he wants to do and loves it. There is nothing wrong with community college, trade school, or any other non-traditional route.
5. You have to carry a credit card balance to build credit
There are many types of credit and depending on what you are borrowing for, what score the lender uses will vary. If you need help understanding your credit score, how to increase it, and a ton of other credit topics…get my mini-course Master Your Credit for only $27.
You do not need to a balance on your credit card to build credit. I HATE that people spread this rumor. You should be paying off your credit card statement balance IN FULL every month or you will pay interest. I have never paid a cent of credit card interest and my credit score is pretty much perfect. Disclaimer: I did help pay off my husband’s credit card debt so I paid interest for his debt but none of my own.
Pay attention to the main factors that affect your credit score and you can build your credit without credit card debt (or any debt at all).
6. You have to be constantly hustling
This kind of goes back to where I said burnout is real.
Some people will tell you – you should always have a hustle, that if you have time to scroll the internet or sit and watch Netflix, that you have time to find a way to make money.
YOU DO NOT NEED TO CONSTANTLY BE HUSTLING. It is okay to enjoy time with friends and family without wondering where you are going to make your next few dollars. It is okay to take breaks daily, weekly, and monthly to remind yourself about the sweet parts of life and why you are on this journey in the first place.
Do not let hustle culture shame you into believing you are not working hard enough. Now, should you be working on increasing your income? Sure! That is the easiest way to build wealth and have more money for your goals. But you can do that with your full-time job by negotiating a raise or finding a new job. You don’t need 12839 jobs or start 9273 businesses (if you don’t want to).
Do you agree with these pieces of bad financial advice? What else would you add?