scary financial advice to run away from

Scary Financial Advice To Run Away From

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After welcoming October, Halloween is just around the corner. We can already see a lot of scary stuff all around us, but black cats, witches and ghosts decorating front yards have nothing on an empty wallet or red digits on a budget. That is straight up evil!

I thought it would be fun to ask some prominent folks of the #debtfreecommunity and #firecommunity of Instagram what would be some really scary financial advice we should all run away from as fast as we can. This is what I gathered from them:

1. Shang, the money coach behind Save My Cents said we should “run away from people who recommend you invest in something that earns them money. The entire financial services industry is full of this.”

Find Shang on Instagram at @savemycents

2. Ellie Mondelli gave my question a lot of thought and she thinks it’s scary when someone advises people to follow a set plan. “Everything should be questioned, and everything should be changed to fit your life and your goals. Something that might be good advice for me may not apply to someone else, and what may be good advice for someone else, could be terrible advice for me. I just don’t like a one size fits all approach.” Ellie says that a good example of this is that she loves Dave Ramsey, but she hasn’t followed his advice exactly as he suggests, still she manages to live off the lower of two incomes while saving up for her first investment property (after paying off her own mortgage and all debts!!! I am just a big fan over here!) Lastly, Ellie said something I agree with 100%, she loves the ways of the FIRE community because they are very open about constructing your own path to wealth.

Find Ellie on Instagram at @elliemondelli

3. Kate, who is sharing her debt pay off journey at Smarts n’ Cents, agrees with Ellie Mondelli saying that some spooky financial advice to stay away from would be “that there is a one-size-fit-all approach to finance. For example, folks say you must stick to a percentage of spending on rent/mortgage, food, etc. Or you have to only use cash. Do what works for you and what you know you can sustain”

Find Kate on instagram @SmartnCents

4. Carmen at Make Real Cents said a piece of scary advice she hears often is “Throw every penny of extra cash you have towards debt”. She doesn’t think that is necessarily a good idea because someone should “take a holistic view of this advice and asses all areas of your finances before throwing all of your money/savings at debt. Ensure you have an initial Emergency Fund in place that is comparable with where you are at in life. For example, an initial EF of $1K may be OK for an individual, but not for a family. Maybe your company offers a 401K match on retirement, you may want to consider taking advantage of the match, especially if your projected debt payoff date is greater than 3-4 years, then consider putting whatever cash you have left after the match, towards debt”

Find Carmen on Instagram at @makerealcents

5. Ryan Conrad, better known as Conrad_Inspire or the Financial Meme King (they are pretty hilarious!), said some pretty creepy financial advice to run from would be to invest while in debt because “Investing can go up or down. Paying off debt is a guarantee. There are few exceptions of people who pay 3% of debt and make 10% interest and even those people should likely pay off debt first”. Ryan’s wife, Alma, is a beautiful Mexican, so I know he makes good choices!

Find Ryan on instagram at @Conrad_Inspire

6. Corey (who I like to call Brad) from Fire.In.Beantown had a couple of thoughts on scary financial advice he’s heard. First, Corey says we should all run away from the negativity. “There are hundreds of news articles a day published about why you can’t do something. About why you’ll never get ahead, about how the system is stacked against you, about how millennials will never be able to “___” because of “___”. Educate yourself, manage your money, live below your means, and get to work. Regardless of what the headlines say, you will be a millionaire in 30 years if you do that”

Corey also said to “not take advice from people you do not want to be like. Those that say “You will always have a car payment” or “You will always have a mortgage” or “This economy…” The people that told me those things are still where they were 15 years ago. You become like the people you are close with. Expand your network to include people you want to be like, not people that are going to drag you down. Find a mentor, find someone that is doing it way better than you and listen”

Find Corey on Instagram at @Fire.In.Beantown

7.  The one and only Savings Diva gave me not one, but five pieces of creepy mortgage-related advice to avoid: Getting a longer term mortgage just to have a smaller monthly payment, putting less than 20% down, buying a home before having six months or more of expenses saved up, getting an adjustable rate mortgage, and/or choosing a bank/lender who could sell your loan to a mortgage servicing company.

Find her on Instagram at @thesavingsdiva

8. Amanda, another pillar of the debt free community of Instagram and the blogger behind Debt Free in Sunny Ca, thinks that consolidating your debt is pretty scary advice because “it only treats the symptoms and not the issue. It gives the false illusion that you have more money than you do. Each time I’ve consolidated, guess what i did? Took out more loans and went further into debt”

Find Amanda on instagram at @DebtFreeinSunnyCa

9. Jen from Saving With Spunk wishes she had not listened to some spooky financial advice when she was trying to pay off her debt. She was told to not invest, but looking back, they were paying off debt fast enough, and their interest rates were low enough that she wishes they had invested on some Roth IRAs during that period. “The rules of personal finance aren’t black and white. If you don’t feel right stopping your 401K match or missing a year on your Roth, you don’t have to. Do what feels right to you” Jen adds.

Find Jen on Instagram @SavingwithSpunk

10. Scott, the Accredited Financial Counselor behind SimpliFinances, gave me 3 pieces of scary financial advice anyone should be frightened by:

  • Anyone that tells you they can outperform the market, knows who the next Amazon is or has the most sophisticated software for stock picking – RUN!
  • Anyone that says they can fix your credit for you – SCREAM Stranger Danger!
  • Advice from friends and family. Just because your buddy made money on bitcoin doesn’t mean you will.

Find Scott on Instagram @SimpliFinances

11. The folks at Pennies to Wealth said that some spooky advice to run away from is to only keep $1,000 in your emergency fund. “That arbitrary number is not going to work for everyone, but it’s suggested as if it is a hard and fast rule. We always tell people to determine their own situation and figure out how much they actually need to save in order to feel protected while they put the rest of their money towards debt. Because having an insufficient emergency fund means you will probably resort to debt again if a true emergency occurs”

Find DJ & Dannie on Instagram @PenniestoWealth

Do you know of any other creepy financial advice we should be aware of? Let me know in the comments below!

Pint It!

Comments

  1. Tee

    I think I’ve heard each piece of advice you’ve listed. I once parted ways with a financial advisor because he believed a lot of the one size fits all theories.

    1. mbaradell

      I think it is important to listen to different points of view, but form our own opinions and make our own decisions. Thank you for stopping by!

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