Personal financial advice is as common as arguments on Twitter, but it is fair to say that not all that advice is good advice, which means it can be difficult to know what to trust and what to ignore. This is not a great position to be in when it comes to your money, which is why I’ve put together a list of some of the worst financial advice, that you probably should ignore if you want to keep your money safe.
Ignore this: Having a budget isn’t right for everyone
This statement is something you might believe and it is could be preventing you from getting on top of your finances and making smarter choices. It IS fair to say that one budget won’t work for everyone. But everyone really could benefit from knowing exactly what they have coming in and going out each month financially.
Plus, identifying areas where you could save money is important. That is exactly what budgeting is all about.
Don’t agree with this: Credit cards are always bad news
This one sounds sensible at first glance, but when you examine it more closely it does not really stand up. Sure, getting into a lot of debt is bad news in anyone’s book, but if you use your credit card sensibly, it can actually improve your financial situation.
For example, using your credit card for purchases will give you a greater level of protection should something go wrong. It will also enable you to build a credit history and boost your credit score too if you pay bills on time.
Many credit cards also come with benefits, such as cashback, which can actually help you to save money. Provided that you pay the balance off in full at the end of the month and avoid spending more than you can afford to pay back, credit cards can actually be a useful tool.
Of course, if you have a problem with accumulating debt and do not feel you can safely own a credit card, then you probably should avoid having one unless absolutely necessary. It is not a one-size-fits-all thing!
Also incorrect: You should invest everything
Investing your money is a great way to see it grow year after year, but should you really invest all of your spare cash? Probably not.
Why? Because then you will not have access to money when you need it. For example, you may need to buy a new car from Edmunds because yours has been written off or you may need to pay a contractor to fix the roof. Or it could be any number of other things that may come up and require a quick cash injection.
If all of your money is tied up in stocks and shares, this scenario could make life difficult. So, although adding stocks and shares to your portfolio is a smart move, be sure to build up an emergency fund that you can access when needed too.
Avoid this financial advice to help make staying on track with your financial goals easier. What are some other examples of bad money advice?