Everyone and their mother wants to offer you some sort of stellar financial advice, but trust me when I say that the advice they have to offer is nowhere near stellar. In fact, it probably is some of the worst financial advice you will ever receive in the history of your life. Most adults offer financial advice that they see as responsible and reasonable, but you’d be just as good to go taking financial advice from my almost 1-year-old-twins as you would from most regular people. Even people whose jobs are designed to pay them to offer you financial advice aren’t offering you very good advice, and that’s just too bad. Most people mean well, but they’re not all that smart. Let me rephrase that; they’re intelligent people, but financial advice is so personal and it’s so different for all people. The financial advice you might receive from a millionaire is going to be vastly different from the financial advice you receive from someone in debt, and you might not know who you want to take that advice from since everyone seems to have such a good life.
The truth is that you really don’t know where people stand in their finances, even if everything looks good. For example, I have an acquaintance who once told me over an evening of too much wine that she and her husband couldn’t afford toilet paper that day and needed to go to her parent’s house to borrow some. The following day, she had a brand new luxury car parked in her driveway (she put nothing down and had a payment that was enough to make you want to cry; especially considering her toilet paper conundrum). So while her shiny new car Facebook posts looked nice to others, we knew that she was struggling and she was putting herself into even further debt because she is one of those people who just has to have the best of everything and be ‘better’ than others. People, it’s just not worth it. Read on to find out some of the worst financial advice you will ever receive.
Buy New Cars Only
I was this person for a very long time. Our first daughter was born and I was on my 8th or 9th brand new car at the tender age of 25, and my husband and I realized our car payments were twice our mortgage payment and I was driving a luxury SUV that cost me $700 a month. When it was time to get rid of those cars, we traded them in for slightly used cars with good warranties and low miles and now I’m driving a luxury SUV with no payment since it was easy to use cash for that vehicle.
Put the Smallest Amount Down
Whether it is a house or a car, you should always put down as much as possible. Cash in your pocket is nice, but a low monthly payment is always nicer. You are probably going to blow that cash on something ridiculous, anyway, so why not make sure you have all the additional cash you need in your bank every month rather than shelling it out to someone else?
Finance It!
Furniture, cars, houses….whatever; just finance it. This is the worst advice ever. In fact, you shouldn’t finance anything. You should save until you can afford to pay cash and then buy something. You don’t need a new couch as much as you think you do or as much as you want it; so wait a month until you can afford it with cash and then buy it. Houses, okay. Cars, I get it. But wait until you have cash to buy everything else.
Buy the House the Bank Tells You that You can Afford
Someone recently commented on the price we paid for our new house and said they were surprised we bought one so inexpensively (and to be fair – we got a hell of a deal on our dream home in our dream community where we’ve always wanted to live and it’s a big house with plenty of space for our family of 6. It’s pretty much perfection personified). They said that with our income, they’re shocked with didn’t buy more. And that, in a sentence, is what’s wrong with this country. Just because we can buy more doesn’t mean we NEED to buy more. In fact, you shouldn’t even buy what the bank tells you that you can afford, because they are usually wrong. This house was perfect for us and it’s everything we’ve ever wanted, and it was cheap. I think that’s a win, don’t you?
Be a Co-Signer
Or don’t; because you don’t want to pay someone else’s debts, do you? If you want to co-sign a loan or something for someone, you’re probably not all that smart. You’re telling a financial institution that you will pay this balance if the person who is using it decides they can’t or won’t pay for it. So if you want to co-sign my loans and pay for my cars and trips and whatnot, call me. That’s awesome and I’m happy to let you give me your money so I can have a good time – no, really, call me.
Take Out More Than You Need
You are remodeling your house and getting married, so instead of refinancing your mortgage to get a little cash and remodel, you decide to take out the maximum amount the bank will allow and use it to remodel and pay for a killer wedding. Awesome! Not! Why would you want to pay for a wedding for the next 20 or 30 years? You wouldn’t. if you have to borrow money, take only what you need and not a penny more.
You Deserve It
It’s bad and it’s good. We all work hard and we deserve to indulge from time to time. But only if you can afford to do so, and not all people can do that. Just because you had a bad week does not mean you can break into your savings account and buy a boat, or charge to your credit card a shopping spree to make you feel better. Sorry.
Photo by Dan Kitwood/Getty Images
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