10 Pieces of Financial Advice that are Outdated


Invest, save, pay off debt, don’t have a car payment, pay with cash, don’t incur interest; there is so much advice in the financial sector that it’s often overwhelming to try and figure out when and where you want to start saving and amassing your personal fortune. The issue is that everyone you encounter has a new piece of advice and the talent and skill to make their advice sound like the best advice in the world. But did you know that most of the people issuing financial advice aren’t even taking their own advice? And did you realize that a great deal of financial advice is outdated and no longer relevant? Well, we didn’t either. But that doesn’t stop us from learning something new (every single day) and helping you move in with the new and out with the old – even in your financial life. Now that you know some of the advice you’re taking is not so good advice, let us help you understand which bit is outdated and old so you know what to stop listening to.

If the Bank Says you can Afford it, Buy It

Well sure, why not, right? If the bank says you can afford to buy a $150,000 home on a $20,000 a year salary with only one parent working and two kids at home, why not just go for it? Oh, and while you’re at it, find a government program that won’t make you put money down and just finance the whole thing! Or….don’t. Put down a significant down payment, buy what you can afford according to your checkbook and then make your way through life comfortably.

Don’t Waste Money on a Down Payment

When my husband and I recently purchased our new home, we placed a significant down payment on the home – more than the standard amount preferred by banks when purchasing a new home. We knew it was a good investment, and the right decision. That’s why, when someone said to us, “We didn’t put anything down and we have all kinds of cash in our pockets. You guys are stupid to put money down,” we just laughed. The same goes for cars; it’s always a good idea to put money down and lower payments. Seriously.

Credit Cards are Bad News

Credit cards are bad news for those who cannot use the properly, but they’re great news when used correctly. When you use your cards to pay for everything in your life and then pay them off in full each month, you can earn a significant amount of cash back and/or rewards points you can use to book vacations and whatnot. And you help your credit score.

The Engagement Ring Price Tag

Who said two months salary is what you have to spend on a engagement ring? That wouldn’t be fair to some people who make a lot of money but might not want to spend tens of thousands of dollars on a ring. You buy what you can afford and what the woman of your dreams will love. It’s not rocket science, you know.

Don’t Forget to Keep Up with the Joneses

Or Kardashians or whomever; or not. Guess what my friends? No one cares what you drive, where you live and what you do for a living but you. If you care about what other people drive, live, wear or do or whatever, you’re the one with problems. Your life should be a life you love, no matter how different it is from others. If you’re so unhappy with your own life that you look enviously on to the lives of others, it’s time to make some positive changes in your own life (and that does not mean buying things you cannot afford so you ‘look’ better). Just be better.

You Have Plenty of Time to Save for Retirement

No, you don’t. Start now. Actually, start yesterday. Save for retirement from the first time you have a job and you will be a lot more comfortable. But don’t wait. You don’t have time.

Credit Card Balances Improve Scores

No, they don’t. Card balances – even below 30% – are still balances that mean debt. Debt means you have a lower chance of getting a better rate, you’ll spend more money and you’re paying interest on things you bought long ago. Think of it this way; you spend $20 on a pizza for dinner using your credit card and leave a balance on the card for years and years. That $20 pizza is going to cost you hundreds over the life of that balance.

Cancel Old Credit Cards

Here’s the deal; you need some cards that you’ve had for a long period of time on your credit. The older accounts are the ones that show the best history and the best form of your responsibility. Keep them. Don’t go cancelling old things all the time.

Apply for Cards to Save Money

There is something to be said about a huge discount when you make a purchase and get the new card application percentage off. But let’s get something straight; save it for something good and worth it. A $50 Old Navy purchase is not worth signing up for a card, taking a credit rating hit and potentially going into debt to save 15%. You’re only saving $7.50. If you really want to make a difference, save up for something really worth it and then make the application. It doesn’t hurt to apply – but it does hurt to apply all the time for small discounts. For example, why not apply for a Home Depot credit card and save 15% on your purchase when you decide to remodel your entire house and you buy all new floors, appliances and hardware all at once? If you’re spending $30,000 at one time, you might as well apply for that card and save $4,500 on your purchase. That’s worth it.

Get a Student Loan

Don’t; don’t get a student loan. People have this really cavalier habit of mentioning that saving for college is not necessary since you can just ‘get a loan and defer it to graduation,’ but that’s so expensive. Do whatever you can not to get a loan. Take fewer classes, get a side job, get scholarships; save now. Do something, but try really hard not to apply for loans.

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