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The Worst Money Advice I’ve Ever Heard

Last Updated: July 15, 2019 BY Michelle Schroeder-Gardner - 108 Comments

Disclosure: This post may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please read my disclosure for more info.

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As a personal finance blogger, I get asked many personal finance questions. Before I respond, I usually ask what they think they should do.

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.

WRONG!

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?

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108 Comments
Filed Under: Budget, Debt, Life Tagged With: Budget, Debt

About Michelle Schroeder-Gardner

Michelle is the founder of Making Sense of Cents, a blog about personal finance and traveling. She discusses how her business has evolved in her side income series. She paid off $40,000 in student loans by the age of 24 mainly due to her freelancing side hustles. Click here to learn more about starting a blog!

Comments

  1. Julie Wood says

    August 12, 2014 at 9:45 pm

    Taking out this much student loans and having that much debt and using it for pleasure is so stupid. It such a bad idea because it can ruin you credit and Student loans are only for school. Not saving money when you are young and not saving money at any age is so bad. People should learn that if they work hard and save that their savings can help them out when they need it!! Like getting laid off from work, getting sick and not being able to work. My savings in the bank help me have so much peace and I am not afraid that I will not have money to pay the bills.

    Reply
  2. M.Clark says

    September 7, 2014 at 8:31 pm

    I agree, what you have listen above is very bad advice. I think if you have common sense you should be able to tell that if the advice you are being given is bad or not. Thank you for sharing this post.

    Reply
  3. Rebekah Martin says

    December 31, 2014 at 8:26 am

    I worked full time and went to school full time when I was in college. I’m absolutely KICKING myself for not saving any money. I mean, it’s absolutely ridiculous that I didn’t. I probably wouldn’t have the money problems I have now if I’d actually saved money. Thankfully, all of my student loans actually went to school, but still. Sheesh! No wonder we’re on the verge of a student loan bubble burst!

    Reply
    • Michelle S. says

      December 31, 2014 at 11:42 am

      I feel the same way. Why didn’t I save?!

      Reply
  4. Christopher says

    February 13, 2016 at 12:03 pm

    The cosigning comment is never good advice. Had a relative with a gambling issue overseas. The private lender sent out loan sharks to use any means to collect and it was a dangerous situation. They would also show up at my cousin’s work area since they consigned the loan.

    Reply
  5. Danielle says

    February 15, 2016 at 10:33 pm

    Wow, yea my jaw dropped at the student loans, and again at the co-signer part! Now I’m no financial advisor by any means, I’m terrible with money, but I have high interest loans, but I used those to actual help me through college, nothing really else was left to do anything with. I wish I didn’t have to do that, but its life. My mother had to survive almost on student loans, as it were she was single no job with 2 kids, she reared in our heads that you need an education but it still wasn’t fun times, and she told me if she had to do it again, as she is paying the annoying student loan bill she would not do it over again.
    As for the co-signer I wouldn’t co sign for my kids, let alone for 3 separate people. Now once again, my mother’s boss stepped in and helped my mother with her first new car purchase, and she only worked there for 3 months! Talk about nice! But i still wouldn’t do it unless I know the amount is something I could handle without stress. I can’t believe the advice people try to give out nowadays none of this advice makes any sense to me, and I’m horrible with money!

    Reply
  6. Jacqueline Knight says

    March 12, 2018 at 2:29 pm

    I was almost rolling on the floor laughing when I read this!🤣
    You did it again Michelle! Great post 😝👏 I am 24 years old, I wish everyone 16& up would read this!

    Reply
    • Michelle Schroeder-Gardner says

      March 12, 2018 at 2:34 pm

      hahaha thanks!

      Reply
  7. Heather says

    March 12, 2018 at 2:45 pm

    Love the credit card one. I never pay interest and I get $50-100 cash back every month. I’ve earned free flights one of which was a $10,000 first class ticket.

    Reply
    • Michelle Schroeder-Gardner says

      March 12, 2018 at 2:48 pm

      Great job!

      Reply
  8. Nancy Perkins says

    March 12, 2018 at 3:31 pm

    I have made my share of money mistakes, believe me. With that said, I have NEVER consigned a loan for ANYONE and refuse to do so.

    Reply
    • Michelle Schroeder-Gardner says

      March 12, 2018 at 3:43 pm

      Cosigning can be so bad!

      Reply
  9. Darren Howarter says

    March 12, 2018 at 3:52 pm

    Hello Michelle,

    Great advice all around. We happen to use credit cards for EVERYTHING! We pay them off in full every month so we can build airline miles and travel for free. We have done this for 28 years. We have had countless flights and we have ZERO DEBT!

    Worst advice I ever heard was to buy a house with the longest mortgage you could get. Then pay the smallest amount that you can every month. Never pay the house off. Just enjoy the house and know that you will pay the rest of your life. You will end up paying 100’s of 1000’s of dollars in interest if not more than a million dollars. Unreal.

    Reply
    • Michelle Schroeder-Gardner says

      March 12, 2018 at 6:16 pm

      Yes, we use credit cards for everything too!

      Reply
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