At some point we are all going to get advice from those that think they know a thing or two about money. Some of it might be good, but unfortunately some of it might be bad and its sifting the good from the bad that can sometimes seem problematic.
I’ve compiled a small list of some of the worst advice about money you will ever hear. You probably have your own experience of bad financial advice you have been given in the past too. If you have, please share in the comments below.
All credit is bad
It’s easy to put a downer on all credit and make the decision to make every purchase that you make with cash, but credit can be a good thing so long as it is use correctly.
It can help to improve or build your credit score. Free services such as Experian CreditMatcher can give you your credit score and at the same time point you in the direction of those companies that will give you the best rates for loans and credit cards based on your credit score.
If you can’t afford it straight away, put it on credit
There are going to be times when, for whatever reason, you might need to replace something that is a necessity such as your cooker or washing machine, which if you can’t afford credit might be the only answer.
Unfortunately if you consider buying that new piece of clothing, something nice for the house or new phone a necessity,they aren’t, and certainly shouldn’t be a purchase that you get yourself into debt for.
Credit cards have their advantage, only when they are paid off in full.
Loyalty is king
Staying with the same company is probably only going to cost you money.
Every year you will probably receive a renewal notice, whether it be for insurance or utilities and more often than not your renewal price would have more than likely gone up and not down, even though you haven’t made a claim or are using your gas and electric less.
Spend a few minutes to do some price comparison research. If you find that you can get a better deal elsewhere see what your current provider can do. If they are adamant they can’t match it or better it, then let your feet do the talking and move to a company that is offering you a better deal.
The best place for your money is in the bank
If you want minimum returns on your investments then a bank certainly is the place to have your money stashed away.
Even though interest rates have gone up I don’t think that many of us savers have received anything from your banks to give notice that the interest rate has increased.
Look for alternatives. Stocks and shares ISAs, dividend stocks, overpay your mortgage (if you’re lucky enough to have a mortgage), look at precious metal investments such as gold and consider peer to peer lending.
Be aware that some of these suggestions come with an element of risk and you might actually lose your money.
Live for today because you could get run over by bus tomorrow
It might be true, you could get hit by a bus tomorrow, but what if you don’t and continue not to get run over by a bus. You will soon find that you’re older without a back up plan. Yes the state my look after you, but this is certainly no guarantee with the state of things as they are now.
You are probably going to live longer, so while going out on the town every weekend or spending at your favourite shop might seem a good idea, they are dispensable memories, easily filled by the next weekend out or making a new purchase.
You don’t have to be a hermit by any stretch of the imagination, but give yourself a budget and maybe consider putting money aside for memories that last
You don’t need a budget
If you’re serious about your finances then a budget is a must.
Though the idea of a budget can sound like a boring proposition, like Pringles, once you pop you just can’t stop.
Knowing how much goes out on your of your account on bills gives you an indication about how much you have available to spend on other things.
The MoneySavingExpert has a free budgeting tool, alternatively you could, if you are one of those people that is constantly attached to your phone, consider one of the many apps available for this very thing.
You only need one income stream
There aren’t many jobs out their that you can hand on heart say are for life, so relying on it for your only source of income might not be your best move.
There are many ways out there that you help increase your income, including:
- Selling on ebay
- Dog walking/pet sitting
- Starting a blog about a subject that interests you
- Monetise your knowledge. There are always people out there that want to lean something new, you might even consider becoming an instructor on something like Udemy
- Sell your photos
Insurance is a waste of time
There are obviously some insurances that you have to have i.e. car insurance, though this shouldn’t mean that you pay over the odds for it.
There are some though that might seem to be a waste of time, but can actually prove invaluable. Would you be able to cope financially if your pet need an x-ray or medication, vets bills can be astronomical often going into the hundreds but thousands of pounds . The cost of a good new boiler isn’t cheap either, so regular maintenance plans from utility could prove helpful.
If you of the view that you don’t need insurance that’s your decision, but at the very least, consider putting the monthly payments that you would have made into a separate account so that you have a contingency fund should anything unexpected happen.
You can be your own financial advisor
Sorting out your own finances is fine at a certain level but as your net worth increases it might be time to consider enlisting the help of someone that knows their stuff and has trained to help in wealth management.
Personal finance blogs are all very well, but there is only so much that I and many of my fellow UK Money Bloggers can tell you about management of your finances.
Don’t bother with a contact when lending to friends and family
I have my own views about lending to friends and family. I’m certainly not a fan of lending to friends and family.
If you are of the view that you don’t mind lending to friends and family, a contract can’t do any harm. It gives parties clarity when the money is to be paid back and by what method and the consequence of its terms not being met.
You might not want to go down the small claims root, they are friends and family after all. Unfortunately this doesn’t stop some people taking advantage and regrettably through no fault of your own, one day you might find that you need this money yourself.
If you don’t like your job, quit
Admittedly, I did this when I was living at home and had no commitments, but as you get older things change and having a fund just to enable you to do quit a job that you don’t like might not be the best thing career wise or financially.
Whilst it is all very well having a fund available for this very situation, what are you going to do if you are unable to find a job after the fund has dried up and what are you going to say in your next interview when they you’re undoubtedly going to be asked why you left your old employer.
If you don’t like your job, look at what makes you unhappy and address this with your boss. If this doesn’t change your situation maybe use the money that you would have used to just quit to retrain whilst you are in work. Investment in yourself will always be a worthwhile investment!
The best place to always bag a bargain is online
There’s no getting away from it. The internet has certainly made finding a bargain easy but we shouldn’t always presume that we are getting the best deal online.
Cashback websites can not only save you money online they can save you money on the high street too and if you are prepared to do your homework and maybe to a bit of negotiation you could find yourself with a better deal overall.
It might not necessarily be financial gain, but if you are able to get anything extra it is always worth a go.
Multi level marketing is a great way to make an extra income
If multi level marketing was such a fantastic way to make money, why are we all not doing it?
The very simple reason is that, multi level marketing, network marketing or whatever other name it gives itself only serves to help those that are at the top of the chain.
If you want to rely on a business model that relies on you recruiting others into your network and then them recruiting others into their own network and then spending your hours trying to motivate those to recruit more then by all means give it a go but it certainly isn’t and won’t be for me for the foreseeable future.
Have you every been given questionable money advice?
I can’t be the only one that has been given duff advice in the past.
I’d be interested to hear yours, so don’t forget to leave a comment below.