{"id":7748,"date":"2023-08-05T16:03:43","date_gmt":"2023-08-05T16:03:43","guid":{"rendered":"https:\/\/isafespend.com\/personal-finance\/savings\/5-bad-pieces-of-financial-advice-that-you-are-better-off-ignoring\/"},"modified":"2023-08-05T16:03:46","modified_gmt":"2023-08-05T16:03:46","slug":"5-bad-pieces-of-financial-advice-that-you-are-better-off-ignoring","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=7748","title":{"rendered":"5 Bad Pieces of Financial Advice That You Are Better Off Ignoring"},"content":{"rendered":"
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When it comes to financial advice, it\u2019s important to be aware of the good advice and the bad. Unfortunately, bad financial advice is everywhere and it can lead to some costly mistakes. It\u2019s important to be able to recognize bad advice and to make sure you don\u2019t follow it. In this article, we\u2019ll be discussing five pieces of bad financial advice that you\u2019re better off ignoring. From taking on too much debt to not having good emergency savings, there are many pitfalls that you\u2019ll want to avoid. With this in mind, let\u2019s take a look at the five pieces of bad financial advice that you should ignore.<\/span><\/p>\n<\/div>\n<\/div>\n

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1. Student Loans<\/strong><\/span><\/p>\n

Many students are told that college is always worth it, even if it requires student loans. The reality of the situation is that not everyone is better off incurring debt for a degree they potentially will not use. <\/span><\/p>\n

It isn\u2019t that college is a bad idea \u2014 for many, it is absolutely the right thing to do. But it\u2019s not for everyone. Some people are better off pursuing apprenticeships to work in the trades, which are in very high demand. Or rather, if you are pursuing a degree in a lower-paid field, consider going to a less expensive college that still offers an excellent education, but at a reasonable investment. <\/span><\/p>\n

2. Low Amount to Strive for in an Emergency Fund. <\/span><\/p>\n

Many people have been told to set aside $1,000 in an emergency fund. Do we need emergency funds? Absolutely. And $1,000 is an acceptable place to start. But the reality of the situation is that in today\u2019s economy, most emergencies will cost well over $1,000, so we suggest an amount that would sustain you for 3-6 months. The best practice to build this up is to consistently add $50 or $100 (or more) each month to your emergency fund. <\/span><\/p>\n

3. Having Too Much Cash at the Bank. <\/span><\/p>\n

Emergency fund? Check! Savings for a big purchase in the future? Check! Saving for retirement in a savings account? Not so much. Banks often pay low-interest rates, and your hard-earned dollars could be working for you so much better in your 529, 401k, IRA, or other investment vehicles. <\/span><\/p>\n

4.\u00a0 You Only Live Once<\/span><\/p>\n

While it is true that every day is a gift, it is not uncommon for individuals to take this approach to finances as well. The issue is that some individuals will take a YOLO (you only live once) approach to all things and risk their future retirement because of that. Certainly, we think life should be enjoyed to the fullest. We just think that you need to make sure long-term savings are taken care of first!<\/span><\/p>\n

5. Your Risk Tolerance Should Be Based on Your Age<\/span><\/p>\n

Sure, it makes sense that individuals in their 20s and 30s have more time to overcome a market downturn than their peers who are in their 40s and 50s. But that doesn\u2019t mean all younger folks should invest aggressively, or that all individuals over 50 should invest conservatively. Many things need to be taken into consideration, such as: how long you plan to work, how much you will need in retirement, other sources of income, longevity, where you plan to live in retirement, etc. This piece of bad advice is right up there with every \u201cone size fits all\u201d piece of advice. It could be good advice for someone, but not for everyone!<\/span><\/p>\n<\/div>\n