I Wish People Would Stop Spreading This Awful Financial Advice

Between running this personal finance blog, and the fact that I’ve always been fairly open about money, people love talking about money with me. So, over the years, I have heard countless pieces of bad financial advice. Plus, people just love giving others advice. Yes, I’ve heard great financial advice, but some of it has…

Michelle Schroeder-Gardner

Last Updated: May 26, 2023

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People just love giving others advice. And, many times, it is pretty bad financial advice. Here are the 11 worst pieces of financial advice I have heard.Between running this personal finance blog, and the fact that I’ve always been fairly open about money, people love talking about money with me. So, over the years, I have heard countless pieces of bad financial advice.

Plus, people just love giving others advice. Yes, I’ve heard great financial advice, but some of it has really been awful financial advice, that I knew was bad even as a kid.

Some of the financial advice I’ve heard has had me shaking my head in disbelief, and others have left me wondering how that person has made it so far in life.

Money is a funny subject like that, though. And, until we start talking about it more openly and spend as much time learning about finances as some of us do reading the latest gossip, watching sports, or something else, then we still have a long way to go.

It’s been almost four years since I first published The Worst Money Advice I’ve Ever Heard. Today, I want to continue on that – talk about some that I mentioned four years ago (some of those still make my jaw drop on the ground and make want me to bang my head on the wall) as well as bring up some more that I haven’t discussed.

Related content:

Below is the most awful financial advice I’ve ever heard:


Take out more in student loans for vacations.

This is always the first one I tell because of how bad the financial advice is. Seriously, it’s the worst I have probably ever heard in my whole life. Sadly, I’ve heard it more than once, and I actually know of a few different people who have done this.

The person that gave this advice was borrowing around $40,000 in student loans each year at interest rates of around 6% to 8%. They did it for around six years, which means they have a significantly large amount of loans.

The thing is, they’ve never gone to an extremely expensive school. They would take around $10,000 out for actual school purposes each year, and then they spent all of the leftover money on vacations and multiple timeshares (they don’t use any of it for living expenses, as they work full-time and used that income to live off of). Their other top piece of advice was to buy lots of timeshares.

So, they would 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.

The really sad thing is that this person was trying to convince others to follow this really awful piece of financial advice.


Buying a home is always better than renting.

Many believe renting a home means that you must be bad with money and that you cannot afford to buy a home.

However, renting does not always mean that you are making a bad decision.

There are many reasons for why a person may want to rent instead of buy. The reasons may include (and there are many more reasons than just what’s listed below):

  • You may not know the area you are moving to, and you want to see what is the best fit for you before purchasing a home.
  • You’re not sure if you want to stay in the area for long.
  • You’re waiting to save up for a down payment.

Just like how renting isn’t for everyone, buying isn’t either.


Co-signing a loan doesn’t have any consequences.

I once heard about a person who has co-signed on several different loans. They didn’t think it mattered because they’re not the “main” 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 financial advice honestly scared me because a lot of damage can come from this. And, because it’s often family that does this for one another, it can cause unnecessary tension with your loved ones.

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.


You should always lend money to family.

To go along with the above, I recently heard someone say, “They’re not a true family member if they won’t lend you money.”

I could not believe it. To me, mixing money and family/friends is a tough situation to tackle, and you must proceed very carefully.

I have personally seen relationships go completely bad because of money, and it’s not a fun situation to be in.


Pay interest on your credit card to improve your credit score.

I’ve heard this one quite a few times. Many people believe that the only way to improve your credit score is to carry a credit card balance and pay interest fees.

That can be horrible financial advice because interest fees on a credit card can be expensive, sometimes more than 20%!

If you want to use a credit card to improve your credit score, I recommend paying off your balance in full each month, before any interest charges are made, and using less than a 30% utilization rate.

There are other ways to improve your credit score too. Here are my general tips for increasing your credit score:

  • Make sure to pay your bills and accounts on time. Late payments can hurt you.
  • Regularly check your credit report.
  • Keep your balances and utilization rate low.
  • Ask for your credit limits to be raised.
  • Pay before your credit card balance is reported.
  • Keep your credit card accounts open if it makes sense, such as to lengthen your credit history. However, if you think you’ll go into debt with them open or if the annual fees aren’t worth it, you may want to think about closing them instead.

Please read The Complete Credit Score Guide – Improving Your Credit Score Has Never Been Easier!


I deduct that off my taxes, so it’s legal and you can do it too.

I hear this one all the time, and it’s so bad. Some people assume that since the IRS hasn’t caught them deducting an incorrect expense on their tax return yet, that it’s completely legal. Wrong, it’s actually a federal crime.

Just because you do it, doesn’t mean that you should be telling others that they can knowingly claim false or incorrect expenses.

Eventually, that person may be caught, or you may be caught before them! Whatever the case may be, being legal is always the best way to go.


Emergency funds are only for those who are bad at their jobs.

Some believe that emergency funds are only for those who are at risk of being laid off or fired. This bad financial advice couldn’t be further from the truth though!

Having an emergency fund is actually great financial advice, and it can serve so many purposes. It can help with more than just a layoff or losing your job for any other reason. Emergency funds can help cover any type of unexpected expenses, such as emergency home repairs, health issues, and more.

Plus, no matter how great you are at your job or how stable you believe it is, there is always a chance that something may happen.

Related article: Everything You Need To Know About Emergency Funds


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.

Saving when you’re young is actually one of the smartest things you can do, and because of compound interest, it’s especially good to start investing when you’re young.

I’ve heard people say you don’t need to save money when you’re young because retirement is far away, meaning 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 paycheck. Plus, the more you save now, the less it will hurt later.


The monthly payment is all that matters when making a purchase.

Salespeople often like to push monthly payments on customers, and sadly, many people believe that the monthly payment is all that matters.

Once, I was in a coffee shop and overheard a conversation that someone was having about a home they were planning on buying. The main person wasn’t sure if they should buy the home because of the price. The other person said they should buy the home because as long as the monthly payment was “good,” then that was all that mattered.

I wanted to chime in, but I’m assuming that would have been awkward.

The monthly payment is not all that matters.

It can be easy to be blinded by the cost of something when it is spread out over a period of time. However, you should think about the whole purchase and whether it is worth it or not. Plus, with a house there are many other factors that can add to the cost, such as property taxes, home insurance, maintenance costs, and so on.

Before you make your next purchase, add up the total cost, and make sure you can afford the whole purchase, not just the monthly payment!

I recommend you check out Personal Capital (a free service) if you are interested in gaining control of your financial situation. Personal Capital is very similar to Mint.com, but much better as it allows you to gain control of your investment and retirement accounts, whereas Mint.com does not. You can connect accounts such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more, and it’s FREE.


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.

Several 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 asked, “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 of dollars 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 because they would ruin my life. 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.

Related: 6 Credit Card Myths You Need To Know The Truth About


You never need receipts for tax purposes.

I actually heard this “tip” on a national news program, which really scared me.

The expert was telling everyone that receipts are never needed for tax purposes and that you can just throw them all away.

I couldn’t believe my ears!

Wes heard the “tip” as well and asked me why I always save my receipts if I don’t have to. I had to tell him that this expert was confused and that this bad piece of financial advice was going to cause a whole lot of trouble for everyone.

I still can’t believe I heard this from someone with such a large audience.

According to the IRS, you must keep receipts for anything that you plan on deducting. If you get audited, you need to show the receipt or a copy of the receipt as proof of the expense.

Please, please, please keep any receipts that you need for your tax return. You never know when you may need it.

What bad financial advice have you heard? What bad financial advice have you followed?

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Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. Oh my, those made me cringe! Intentionally messing up your taxes? Not keeping receipts? And thinking paying interest in a credit card helps? Ugh that’s horrible.
    And I remember when I bought my first car from a dealership the sales agent always started the conversation asking what I wanted my monthly payment to be! I told them I didn’t care about that, I wanted to talk about the purchases price. But I see how people make that bad choice all the time!

    1. Yes, same here! I paid cash for my car so I wanted to know the full price. Unfortunately online all I see are people talking about the monthly payment. I feel so bad that they don’t get it. Also, the ones who trade in a car within a few years to upgrade drive me crazy. I kept my last car for almost 18 years and hope my new one lasts just as long (which is why I was ok buying new instead of used).

      1. I know so many people who trade in once their monthly payment is over, and then get a NEW monthly payment. SO crazy.

    2. These all make me cringe too!

  2. Wow, that credit card one was something else! Like you, I always pay off my balance monthly to avoid finance charges. I put just about everything on my credit card because it’s easier to track my expenses that way. Plus I get points I use on gift cards. I hope none of my friends think I’m in debt! So far from it, actually!

  3. Ugh ooooooo! Somebody dun pissed Michelle off. Who’s messing with my side hustle friend? No worries Michelle. I got your back!. Drop some names so i can call them out on DNN. I just got in from the gym not long ago doing cardio on the treadmill. I’m going to give you another nice lengthy blog comment sometime today with my insight on this post and people who’s trying to mess the side hustle game up for us. I’m glad you mentioned this! 🙂

  4. Crystal

    The rent vs. buy discussion is so prevalent to the military community. It makes me cringe to hear families continuously buying houses with little to no down thinking it is better than “throwing money” away with rent. This was a fun post, but also made my stomach turn!!!

    1. Haha sorry to make your stomach turn.

  5. I’m glad I haven’t heard some of these. I think I would have a hard time not laughing. I’m glad you pointed out these things. Often times, we try to make money a one-size-fits-all thing. That could not be farther from the truth. Housing is a perfect example of something that may work well for one person but could be a disaster in another city’s market.

    1. Yes, you are so lucky! haha

  6. When I was right out of college, about 15 years ago, I worked for a mortgage company that mostly dealt with sub prime loans and customers with bad credit. The monthly payment is the only thing that was pushed to customers. Things like interest rates and total loan amount were afterthights. Of course, the company did this because the interest rates were high and people buy based on monthly payments, but it always surprised me how many customers didn’t really care about anything except their monthly payment. Fortunately I didn’t work there very long.

    1. Yeah, that is just so crazy.

  7. I’ve heard it’s “fine” to take money out of your 401k for house down payments but I feel like that’s terrible advice! If you don’t have it up front to begin with and have to borrow from your future self / wealth, I would think you’re probably not ready to buy.

    1. Ugh! There’s so much bad financial advice out there.

  8. Daryl King

    Worst advice I have heard was in regards to stock market investing. During the 2008 crash everyone seemed to think that it was time to get out of stocks. I saw it as a 40 percent off sale. My reply was “When was the last time the market crashed and didn’t recover?”

  9. I’m laughing my rear end off at some of the advice that has been posted. I’ve been told to use credit cards for big purchases only. I use credit cards for everyday purchases in my budget and pay them off every week. I also agree that everyone should have an emergency fund. You never know when your job is gone. Great post.

  10. Suzi

    Goodness, you’ve heard some doozies! Question on the person with the school loans–were they still in school? I can’t imagine someone that was making the payments on all those loans would feel the same way!
    Worst advice I ever got was to cash out retirement funds to pay off credit cards.

    1. I honestly can’t remember if they were in school or not. I do wonder how much student loan debt they have right now.

  11. I’ve heard the credit card one all the time that it only helps your credit if you carry a balance and I never understood that concept.

    I’m a bookkeeper by trade and I hear that last one all the time in bookkeeping facebook groups! It’s a big debate among bookkeepers.

  12. This is such a great article! What would be interesting is knowing the actual “true” financial position of these people giving out such horrible advice! Scary, indeed!!!

  13. Owen

    Great post. Especially the point about using a credit card. This exact scenario happened to me too. I have 2 credit cards and I use it wisely. Thanks for your great blog, Michelle

  14. Kia

    Great article! I’m a loan officer so I hear some interesting things people believe about finances. One of the most common, and cringe-worthy, is the lack of understanding about co-signing on a loan. Like you mentioned, people who co-sign often don’t understand what potential consequences it could have. I’ve had to inform people after pulling credit that the loan they co-signed on has been consistently late and has damaged their credit score. Another problem with co-signing is that you could then be denied for a loan because your debt ratio is too high. I see people co-signing for family members so they can get the really expensive car they don’t have enough credit for. When I explain that I now have to include that $600.00 payment in their debt ratio, it’s a bit of a rude awakening. I’m glad you’re putting this info out there!

  15. I’ve never received bad advice, I don’t think! But I’ve seen friends get swamped by debt and its heartbreaking.

  16. Betsy

    I’m just sitting here stunned that people actually think these are good advice. In what world is it a good idea to take out student loans for something other than school?!? I just can’t with that!

  17. Mr MFC @ Morning Fresh Cent

    Another advice that is questionable is you should lease your car because you get to write part of it off each year. Plus you get to drive a new car every 2-3 years and the payments are low. My understanding is not everyone can write off a lease car payment, unless you own a business and it is under that business. Most people just hear the new car every couple of years and low or no down payment of the conversation only. Similarly for mobile phone they are going towards this business model now.

  18. Hi Michelle,

    Pardon me for the late comment I said I would post yesterday. Things happened.

    Wrote this yesterday 🙂

    I’m back. Had a lot of work to do today online and wanted to follow up on what I said about returning to your blog to leave a lengthy comment on this post about someone giving awful Financial advice. I read your blogs because I know personally that you know what you’re talking about and you’re good peoples. I always take what you say at face value and believe it because you understand struggle and like myself, you built your side hustle from the ground floor up. I respect you for doing that.

    Who would ever think about taking out a student loan and spending that money on a vacation? Whoever did that is an absolute fool. Anyone in their right mind knows education is way more valuable than taking a vacation in the moment. Vacationing over priority is nothing more than satisfying instant gratification if you personally asked me. Besides, there’s a price to pay for instant gratification. You have to pay back all that money plus interest and not achieve educational goals. That’s for the dumb people who prefer taking out student loans and spending it on vacations. My assumption is those people are in their early twenties and have no life experience and probably wouldn’t know what to do if they lost their entire life savings.

    I like the part where you talk about buying a home is always better than renting. I had a former best friend back in Brooklyn I grew up with since about 5 or 6 years old. His mother is still living in the same apartment allegedly from 30-plus years ago paying rent. All that money she shelled out from 30-plus years ago she could have owned her own home by now and probably had the mortgage paid off plus had a nice amount of equity built up in her real estate. Sadly, I believe she’s still in the two bedroom apartment in Brooklyn nearby Nostrand Avenue.

    In reference to lending money to family, that’s something I would never do. I have some Cutthroat family members I stay far away from and would never go to a family event ever again in life. I had one family member “an Aunt” who created enmity in my family. She basically said things about me and made it clear she wants nothing to do with me. I’m pretty sure her feelings would change if she sees me in Forbes Magazine someday making great side hustle achievements like you, Michelle. You know, when you’re in Forbes Magazine, Huffington Post, and getting mentioned on important financial news websites, those long lost family members and those who have it out for you have a way of coming up out of the Woodworks trying to act like things are all good so they can potentially get a fast Buck out of you. They’re the same ones that were against you from way back when and all of a sudden love you when they hear that you’re doing good and making big money. Those types of family members I want nothing to do with and I will never a day in life lend money to.

    I beg to differ that only people with money problems have credit cards. Rich people have credit cards too because they don’t want to walk around with large sums of cash in your pocket when making large purchases. Although some people who are quite rich don’t mind doing so. In my personal opinion, credit cards are good for everyone to have rich or poor, because credit is pretty much everything in today’s world. It’s good just to have a gas credit card because you can build up a pretty good credit history off of that. My credit history is good and very humbled about that. I know to pay my bills on time and if I don’t make the payment date, contact the credit card company ahead of time to let them know so we can work out a plan for me to mail in the money shortly after the payment due date so I don’t accrue late fees and interest charges. Overall, everyone needs credit.

    Thank you Michelle for posting another thought provoking blog on financial advice, side hustles, and life.

  19. I don’t know if you have these in the US, but here in New Zealand lots of stores offer buy now pay later deals on big items. The thing that makes me cringe is when they say buy now and you don’t have to start making repayments for 3 months, or some deals say 6 months. Some stores even say no repayments for 12 months. Imagine having your sofa, or car, or whatever and 12 months after you bought it THEN you have to start making payments. You just wouldn’t want to pay would you because the thing feels old by then. And think of the amount of time the debt is extended to. I just hate the whole concept.

  20. I have heard that credit card advice a couple of times. It sounds quite funny that when debt starts to get accumulated, some people put the entire blame on those lifeless cards instead of blaming them who are using it. Credit cards are always beneficial for those people who have the discipline to control their spending. The basic rule of using a credit card is very simple. Use one with a good bonus program and pay off the balance in full each and every month.

  21. Beks

    There’s only one person that I would cosign a loan with, and that’s my sister. I co-signed her first car purchase under the understanding that she tell me if she’s having trouble making payments. We’ve continued cosigning for each other and have never had problems. I think the trick is to just have a very open conversation, and if you don’t feel like it’d be a good fit, don’t do it. There are some people I would NEVER cosign a loan for because they just don’t seem responsible. My sister has proven to me she’s responsible, and vice versa. I’m actually thankful for that. But don’t do it all willy-nilly. Give it real thought before saying yes.

  22. The Curious Frugal

    Definitely a cringe-worthy list. Though many (many) years ago I could have believed a couple of these. Particularly about that buying a house is the way to go. Even though I do have a house, I don’t believe that now that it’s the best thing for everyone. And it might not be what we decide is best for us in the future either. I have dreams about van living/tripping in the future 🙂

  23. Haha I never heard about the credit card story. I actually thought it was normal to use credit cards for most purchases. I do for the most part (I mean, who doesn’t wanna reap the rewards?) and I see everyone tapping their credit cards away at the machines all the time. Welcome to 2018! Lol

  24. Preach it Michelle! I have never in my life allowed interest to accrue on a credit card…even when I was a struggling student!

    The worst financial advice I think I have received encompasses many of those you have listed and more. The ever ambiguous, “Worry about that later!”

    But later gets put off more and more…until you are too far underwater to deal! No thanks!

  25. So much bad advice! Thanks for taking the time to set the record strait!

  26. Leon Mclean

    Hey Michelle,
    Brilliant post!

    There is a lot of bad advice out there that can really harm people’s finances and relationships.

    I published a post on my blog this week going into detail about “why you should not lend friends and family money”.
    So your points on this topic and not co-signing on loans really resonated with me.

  27. Yikes! Who are these people. The first one is awful (timeshares? Why??), and it just gets worse from there. That is scary. I’ve known plenty of people that take out extra student loan money for extras, but not specifically vacations. Um. You know you have to pay that back right?

  28. There is so much bad financial advice out there. As a financial aid counselor, I’ve seen students take out their loans for vacations, cars, and other foolish stuff. I try to tell them my story about still having a lot of student loan debt, but many of them just don’t listen. I won’t stop trying to educate them though.

  29. Good financial advice is pivot to financial freedom. But having poor financial knowledge will always kick back. Wait to read more from you. You eventually nail it all.

  30. Tyler DeBroux

    This is a great list of financial myths! Back when I worked in the financial industry, one of the biggest regrets many of my older clients had was that they didn’t start saving and investing money when they were younger!

  31. Sara Michaels

    oh my gosh! I cannot believe the comment about not needing to keep receipts for taxes :O

    This is a great post!!!

    Some of these shocked me!!!

  32. Lin

    Oh my goodness- what a great list! If only this was taught as “Home Economics” from middle school up!

    Receipts: I purged our files one day, tossing and shredding, thinking I’d never need all that paper. About a month later – kid you not- we got the IRS letter: AUDIT. What did the agent say to bring? Yeah…you guessed it: actual receipts to corroborate our deductions. I had to go back to all our vendors (20?) and recreate that year.

    Keep your receipts!

  33. The alternate title for this post could be: “How to get into trouble Fast!”

    People are so convinced they are right that they don’t even bother thinking about what they are saying. Humans are probably the only self-deluded animals on the planet! I guess it is caused by our ability to “think”!

    This list reminds me of what I read one time where people submitted their “worst date ever” stories to a news site. One woman wrote she went on a date with a guy and when they were looking at a menu in a restaurant the guy said:

    “Don’t order the soup du jou. I had it in Chicago once and it was terrible!”

  34. I know a few people who used their students loans to buy cars with which always seemed unfair to me as it took a very long time to be able to afford to buy a car of my own. Great read thank you

  35. […] Michelle from Making Sense of Cents highlighted this point in her most recent post, that being a co-signer or guarantor is a bad idea. […]

  36. Michelle-
    Thank you for addressing these bad ideas. Hopefully people will stop and think about the “advice” they get and consider if the advice is actually wise. As a CFP(r) I often find adults in their 40’s and 50’s trying to unwind from mistakes made in their 20’s.

  37. Patricia

    I remember having a conversation with one of my bosses when he leased a new car. I said we always paid cash. I showed him how I saved half of his payment amount in a dedicated account an turned it into CD,s when I had $1000 accumulated. In the same time he was paying off his lease, I ha enough saved to buy the same car and it only cost me half as much. It should be noted interest rates were higher then. Would of need to save 70 percent at current rat as I’m older and wiser now so I drive my cars till they drop and then buy a model four or five years old. Currently still have my 2001 for “messy” shopping and my new car is a 2017 similar model.

  38. Hey Michelle,

    I wish you would post your monthly affiliate and blogging income reports again. These types of blog posts were truly inspiring. They motivated the little working class person to get the side hustle going and start blogging consistently. I hope you make plans to bring this back in 2022 at 2023. 🙂

  39. Smridhi M

    Thanks for such great and valuable financial advice you have shared with your readers. Plus, I totally agree that money is a big cause of problem if you mix it with family and friends. It ruins your relationships.