Everyone seems to have their own opinions and mindset in regards to money. What works for some, could very well be horrible advice for others.
Especially when you graduate into the real world, you are overflowed with financial tips and tricks from everyone. Although the polite thing is always to listen, the truth of the matter is that even well-meaning advise could be absolutely horrible for you and your financial future.
Here are 7 of the most common pieces of financial advice that you should ignore.
Don’t Use (Or Own) a Credit Card
Okay, this piece of advice should only apply to you if you’re a heavy spender and get a little carried away. But credit cards are absolutely necessary in the United States as a tool to build up credit. On top of that, many credit cards offer financial rewards.
I have had a credit card since I was 18 and make all my purchases with it. However, I never purchase more than I can pay off in that month. To this day, I have never paid a cent in interest! Thanks to always using my credit cards, I have earned thousands in points and cashback and have been able to pay for vacations and even holiday gifts.
You Don’t Need An Emergency Fund When You Have Credit
Credit cards are useful in many scenarios, but you never know what’s lying around the corner. A credit card won’t pay for your mortgage or student loans in the event of a crisis. You should always have a significant amount of money saved up and not just rely on credit cards to get you through.
Even if you can only put a small amount away monthly, it’s a great starting point. And it’s better to be overprepared than under.
Property Is The Best Investment You Can Make
It’s common for people to tell you putting your money into a house is a great, stable investment. And although that is true for many, if you are getting yourself into a mortgage, high utilities, and loads of debt; you are setting yourself up for failure.
Yes, property is a good investment in the long-term but it could very well drown you in the short term if you don’t plan out all your finances accordingly.
Negotiating Unexpected Bills Is Pointless
You can always negotiate! No matter how big or small the unexpected bill is, you can give the company a call and ask them to 1. explain the costs and 2. lower the bill.
Over the years, I have been able to get loads of money off vacations, bills, insurance, etc. simply because I was willing to give them a call. I know you might not want to spend half an hour on hold or are uncomfortable negotiating, but you can definitely do it. Simply have some patience and maybe even plan out what you’ll say.
High Risk Means High Reward
It is a common misconception that the more money you put into something, the more you will get out of it. Although that might be true in the world of gambling, the truth of the matter is the higher the risk also means the possibility of a big loss is much more relevant. I’m not saying you should avoid high risk, but in most of the cases I’ve seen, the reward does not merit the loss. Think carefully about your financial future before you make huge and drastic risks.
Follow a Militant Spending Plan To Get Out Of Debt
Deprivation is never a good thing. What happens to dieters who have cravings but suppress the urge? They give up, go to their comfort foods, and overeat. The same is true of depriving yourself of things.
If you are trying to curb purchases, you have to be realistic. Begin with the end in mind and take small steps, allowing yourself to be rewarded over time.
Your Wedding Day Is An Investment
I’m sorry if I’m upsetting you, but your wedding day is a party! You should never spend a whole years salary on a one-day event. You’re starting a new and exciting phase of your life with unnecessary debt.
Even if you do want a big wedding, never spend more than you have.
When it comes to your financial wellbeing, always try to make educated decisions and keep the end goal in mind. The end goal for most isn’t a life of debt and stress. Always think things through, consult professional, and do your own research. You’re the only one who will live with the consequences, so don’t listen to the advice of others.