So I had a crazy thought, and that lead to me doing a thing. I asked around
What was the worst advice you’ve ever gotten about money/budgeting/finances?
The responses were amazing.
So many people gave stories about the bad advice they had been given. Some of it was hysterical, while others were sad.
A lot of it had you wondering how anyone could have believed it in the first place due to it sounding so far fetched.
Most of the bad advice seemed to come from financial professionals. Someone who you’d trust to know what they were doing. Tax preparers, car dealers, realtors, bankers and other folks with years of background knowledge or even schooling on the financial matters.
I compiled the Best/Worst pieces of advice to share with you here.
2. You need a credit score to buy a house.
3. Kids will make you go into debt.
4. Student loans are an investment and good debt.
5. Put everything on your credit cards each month to get rewards and money.
6. Buying a new car with 0% interest is better than paying cash for a used one.
Plus getting a warranty is always best.
This one pretty much echoed what most of the people sharing their stories kept saying. There is no such thing as “good debt.” and #5 is the slippery slope that took me into consumer debt. Victoria Secret, Toys R Us, Kohls, Home Depot and a few others took me in with their card holder only deals.
I hear this one around my own house with my family members too. My husband telling me we’ll always have a truck payment…. Uhm, no.. Not on my agenda. Hopefully he’s more understanding to my dreams of becoming debt free by 30. Especially now that we’ve gone through such a trial filled year.
Nevermind the fact that cars only depreciate in value. While a few unicorns of the bunch may become classics in 20+ years, most will never be so lucky. Cars lose 10% of their value just by driving off of the lot. Then they lose another 20% in their first year.
Add in interest rates, the high priced mark ups and within 2 years of owning, you’ll be so far negative that you couldn’t sell your car for what’s left on the loan without taking out another loan to cover the difference.
Cars are a horrible investment. *End rant.
Take out a DEBT to pay off a DEBT. Ouch this advice hurts my head. Won’t lie, while we were struggling this year we thought about taking out a zero interest loan to roll all of our debts into, but I always failed to pull that trigger because the math never added up. Who knows what the future holds, and if you don’t pay back that loan within the special timeframe given, you’re left with so much extra interest charges that you’re no better off.
Ah! No! Just imagine how much better life can be when you don’t have bill to worry about.
Oh, but this next one..
This one is a pretty common told piece of bad advice. Most people believe that credit scores are needed to get a home loan. But there are other ways, including (but not limited to) Manual Underwriting.
Stores know exactly what they’re doing. They aren’t losing money by offering these luxuries to you. This is a hook. line. and sinker.
#Classic #OldestTrickInTheBook
More than likely your credit card debt is less than the amount you have in savings, . Why not just pay off the credit card in full, and enjoy a fresh start at a cash only lifestyle? It’s such a better option than allowing your hard earned money line someone else’s pockets in the form of interest.
The truth is that no debt is good debt. It is never a good thing to owe money to someone else. I can’t think of a single instance where it is a good thing…
As a society, people have fallen trapped to the idea of impressing others with their possesions and wealth. Using money as a status symbol,
This is one of the reasons I so badly wish to become debt free, and why I started this blog to help not only myself achieve this goal, but you readers as well.
Together we can achieve our dreams, budget our way out of debt and live the lifestyle we so badly dream of each night.
In the comments, share your worst piece of financial advice that you’ve ever gotten. Did you take the advice? Were you able to learn from the experience?
Like this post? Pin it!
I never understood the kids bring you debt thing. I have 4 kids and have learned that their expensive are mostly through food and clothing. There are so many ways to be frugal with kids and still provide them with everything they need. These are all great tips.
Oh gosh – not really financial advice per se, but when I was buying my first (new) car just before turning 25, I was very concerned about the gas mileage and wanted something with good mileage. My father told me that this was a silly consideration, because gas (which back then had dipped back below $1/gallon, where it had been a decade before when I’d gotten my license) was NEVER going to be much more expensive than it was at the time! I still had that car when gas went above $4/gallon, and was happy for having taken this into consideration once upon a time!
The car payment one for sure. You only have a car payment if you keep buying cars
I hear “you’ll always have a car payment” line from people ALL THE TIME. It’s crazy that there are so many people who think that.
My husband thought that way until a few months ago 😰
Ugh student loans are the WORST debt. I’ll never pay mine off. They feel like a dark rain cloud hanging over my head.
I don’t remember what it is like to not be in debt being a student , even on a placement year . I suppose cars do deappericate but some people just need them haha. Totally feel the pain getting out a loan to pay off old debt.
So many of these pieces of advice make my head hurt and make me want to bang my head against the wall! Student loans are good debt? Just charge it and enjoy life? Ugh!!
I am learning more and more about debt and credit, so thanks for writing this! I have heard a few of these, mostly the “good debt” line. DEFINITELY not true, lol!
I really enjoyed reading this and the myth on “good debt”. Such an opener!
Oh my gosh, I’ve heard a few of these too. Luckily, my husband and I are pretty good with our money. We only have one car payment right now, and all of our student loans are paid off. Kids are expensive, but that doesn’t ever mean that should be a barrier to having them! I’d take any debt necessary to have my two crazy boys!
I have to say the worst piece of financial advice when I was in college and a credit card vendor was lecturing me on the advantage of using a credit card and paying the minimum. Nope, never did it. Always paid my balance in full and followed my financial rule – never spend more than your budget.
Some debt is good debt is a line I have never understood.
I worked at a bank for years and it wasn’t until I was working at a college and had mastercard sales goals that a lot of the things the banks were telling me to tell customers just hit me wrong. It’s all so they can make more money.
I go back and forth on the student debt. Because it really helped my husband and I hit our long term goals. But it also sucks big time. I’d love to know more about the facebook group your part of!!
It’s good to hear someone talk about the worst types of advice instead of giving away tips and tricks for a healthy financial life! Many thanks!