How Can I Avoid Bad Money Advice

How can I avoid bad money advice? Bad money advice is everywhere, from your family and friends to headlines on the news. I'm going to share examples of questionable money advice that can cause you to make decisions that aren't necessarily in your best interest. And so you can see that advice and learn how to think about it critically so you could apply it to your life or not. Let's start with investing. Definitely invest in a stock that's trending. There's always that one person at a party who's bragging incessantly about all their cryptocurrency. You don't have to listen to that because investing is highly personal. What works for somebody else does not necessarily work for you. It depends on how much money you have to invest, your time horizon, and especially how much risk you can stomach. So don't buy a stock just because it's trendy. It might not be a good fit for your portfolio. Here's one I hear all the time. Credit cards are evil. Actually, a NerdWallet study found that one in 10 Americans believe that's the truth, but credit cards aren't a person. They're not inherently good or evil. It depends on how you use them. If you can use your credit card responsibly by paying your bill in full, on time, every month, you can enjoy the benefits of a credit card without having to deal with any sort of consequences. Here's one that probably hits close to home. You have to buy a house by a certain age. That age might depend on who you're talking to. Your grandma might say 22 because that's what she did, or your friends might say 30 because that's what they did. But what's really the most important thing is what age you feel ready. And you might never feel ready because buying a home is one of the biggest financial decisions you could possibly make in your life. So you wanna make that decision with as much information as possible. You might live in a city that has a high cost of living and renting might be more cost-effective for you, or you might want the flexibility to relocate to a new city for another job. And if that's the case, then renting is totally fine for now and you can aspire to home ownership in the future. I didn't buy my first house until I was 35. So I spent a long time saving as aggressively as I could for the down payment and the closing costs and even repair costs that inevitably pop up. And I promise you they will. So if you want to buy a home one day, but you're not ready, then use this time to your advantage. Save up, put a little away every month. And that way, by the time you're ready emotionally to buy a house, you're also ready financially. Here's my favorite one. It's bad to splurge. There's so much shame-inducing advice out there when it comes to spending money on non-essential or luxury items. But there's a line from the movie Parasite that I really love. And it says, money is an iron. It smooths all the creases. And money exists in your life, not just to pay for essential things like a roof over your head and groceries, but it's also there to bring fun and joy and convenience as well. And so as your financial situation gets more stable, maybe you get a promotion and a raise at work, it's totally okay to allocate some of that money toward purchases that can bring you that happiness and that can smooth out all those creases in your life. You know, things like kitchen gadgets that make cooking dinner more fun and allow you to expand what types of recipes you try. I own two Roombas because I have three pets and a multi-story house, and my floors were constantly covered in pet hair, and now they're not, and I don't have to be the one to vacuum them anymore. And so that type of purchase for me was expensive, but it makes me happy every day. And then there are also those purchases that bring a lot of convenience into your life. Maybe you hire a professional house cleaner or a yard service so you don't have to mow your lawn every weekend. These types of things can bring you additional time that you can invest in other things, whether that's your work or your family or hobbies, anything that's meaningful to you. And so if you do have splurges in mind, there's a way to do it responsibly. Just plan for them. There's a lot of bad money advice out there, and it can be really hard and confusing for you to cut through all the bad advice so you can get to the good stuff. What helps is whenever something sounds really absolute or it doesn't really apply to your life situation, that's probably a sign that something about that advice just is never going to fit you that well. And that's totally fine. So what you can do is first work to identify your money values so you know what's important to you, what goals you have. And that way, as you go through life and you hear these bits of advice, you can apply things that will move your life and your goals forward, and you can ignore anything that leads to unnecessary feelings of guilt and shame because that's never productive. So arm yourself with money education. Whenever you have a money question, just Google it. And that way, you will begin to build your knowledge about money, you'll be backed by your strong money values, and whenever you hear questionable advice, you'll know that you should take it with a grain of salt. I'm Sarah Rathner, and you're watching Awkward Money Questions, where we provide smart and comforting answers to your most uncomfortable money questions. If you have an awkward money question, leave a comment below. And don't forget to subscribe.