One of the first things I usually hear is advice they were given by someone else. Sometimes the advice is great, but other times I can't help but cringe and then I have to try my best not to let my jaw hit the ground.
I really wish I made up the advice below, but sadly they are all true. Some I heard first hand, and some I heard from others asking me if the advice was something they should follow.
Below is the worst money advice I've ever heard:
1. You don't need to save money when you're young.
I'm all about living life and enjoying yourself. I also think money is meant to be enjoyed.
However, I think there is room to do that AND save money. Just because you're young doesn't mean you don't need to save.
I've heard people say you don't need to save money when you're young because retirement is far away so you should spend all your money now and enjoy yourself. I've also heard that you shouldn't save when you're young because you can rely on others.
Both of those reasons just make me cringe. You can't predict the future and who wants to rely on someone else for money just because they are young?
It won't kill you to save at least a little bit out of each pay check. Plus, the more you save now, the less it will hurt later.
2. Just use your student loans for everything!
I recently heard a story that I still can't believe. Sadly, I've heard it more than once and I actually know a few different people who do this.
This particular person takes out around $40,000 in student loans each year at interest rates of around 6% to 8%. They've done it for around 6 years now, so they have a significantly large amount of loans.
Thing is, they've never gone to an extremely expensive school. They take around $10,000 out for actual school purposes each year, and then they spend all the leftover money on vacations and multiple timeshares (they don't use any of it for living expenses, as they work full-time and use that income to live off of).
So, they spend around $30,000 a year from their student loans on having “fun.”
NOPE, I'm not even kidding!
My mouth dropped. I didn't even know what to say.
Sad thing is this person was telling other people to do the same.
3. Co-signing a loan doesn't mean anything.
I recently heard about a person who has co-signed on several different loans. They don't think it matters because they're not the first person on the loan. They also thought it was okay to co-sign because all you're doing is helping someone with their credit, and that nothing bad could come from it.
This advice honestly scared me. A lot of damage can come from this.
If you co-sign a loan for someone, you are liable for it if they fail to make payments on it or if they sadly pass away.
4. Buy anything and everything for your business because you can write it off.
Now that I have my own business, everyone keeps wanting to give me tax advice. The advice I find funniest is when someone tells me to start buying more stuff so I can write it all off on my taxes.
I just don't get this way of thinking.
Just because you get a tax write off doesn't make the item free. I understand buying stuff you need, but why would I buy stuff I have absolutely no use for?
5. Only people with money problems have credit cards.
I've had a credit card pretty much since the day I turned 18. I've always used them, have never carried a balance and I have never paid money towards interest.
A few years ago, I took my credit card out to pay for a purchase. One of the people I was with told me to put it away and that they would pay for it since I couldn't afford it.
I looked at them confused…
I said: “What do you mean I can't pay for it?”
This person started to tell me that only idiots carry credit cards and that I must be tens of thousands in credit card debt, and that they couldn't believe my debt had gotten that bad.
They told me to get rid of my credit cards immediately and that I was ruining my life with them. They also said there was no way to responsibly use credit cards.
I remember standing there laughing because I had no idea where all of this was coming from. I tried to convince them I was okay, but I'm positive they still don't believe me to this day.
Don't get me wrong. I DO understand there are people out there who should only stick to cash, but I also think there is a way to use credit cards responsibly and to your advantage.
What do you think of the above? Would you follow any of the advice above? What's the worst money advice you've ever heard?