As you grow up and start a career, you are bound to be bombarded by a slew of financial advice, both good and bad. How do you know who and what to listen to? There is some terrible advice given to the younger generation, but these might be some of the worst I have ever heard.
1. Renting Is a Waste of Time
You’ve probably heard this statement before: “Renting is just throwing your money away; you need to invest in a home!” That might not be the best advice, though. Many members of the younger generation value freedom and the ability to travel. This means taking on the financial burden of home ownership is not always feasible. The convenience of renting allows you to enjoy amenities like a pool or gym without worrying about the cost of upkeep.
2. Follow Your Passions
“If you find a job doing what you love, you’ll never work a day in your life.” That sounds all fine and dandy, but it’s more of a fairy tale than real life. There is nothing wrong with having a passion, but often, passion doesn’t pay the bills. It’s wise to have a Plan B for a solid career. You can still pursue a passion, like acting or dancing, with a solid career that will pay the bills on time.
3. Never Use a Credit Card
Yes, using your credit card too much could saddle you with high interest rates and massive debt. However, you can have a credit card and use it as a smart financial tool. Credit card use proves you are responsible with money and builds your credit score. Taking advantage of credit companies offering cash rewards or perks is a great way to score deals. Just make sure you pay the balance at the end of the month.
4. Worry About Retirement Later
Just because you are young and have just entered the workforce does not mean you should put off saving for retirement. The more you save, the better your quality of life once you retire. Please take advantage of your company’s 401(k) program or invest in a Roth IRA. Trust me, the older you are, the happier you’ll be that you started early.
5. A Savings Account Will Grow Your Money
While having a savings account is a good way to separate your spending from your savings, a standard one will not get you wealthy—not very fast, at least. A standard savings account may only net you a 2% return, so that money will grow at a snail’s pace. Instead, find a trusted financial advisor and put some money into stocks. Financial advisors usually only make money if you do, so it is in their best interests for you to succeed.
6. Pay the Minimum Every Month
If you can afford to pay a little extra on your financed spending, do it. Interest charges rack up over time, and you will end up paying thousands of dollars more than you would if you had paid more than the minimum. Sometimes, the accrued interest on a credit card can increase your bill after paying the minimum. Even a little more will help you save a lot of money over time.
7. You Have to Go to College
I went to college after high school, and while I don’t regret it, I found myself jealous of my friends who learned a trade and started making serious money in their early twenties. Trades like electricians, plumbers, and welders can be very lucrative skills without the debt of college loans.
By the time I had paid off my student loans, my friends had already bought homes while I was scraping by. College is still very important, but it is not for everyone, and you can be successful without a degree.
8. File for Bankruptcy
Bankruptcy is not an end-all-be-all solution for massive debt. Bankruptcy might not even cover all of your debt. Back taxes, student loans, and child support will still be your responsibility to pay back. It will also destroy your credit score for up to 10 years, which is a nightmare if you want to buy a home or apply for a loan. You are better off searching for debt consolidation or seeking out a counseling agency to get your debt in order.
9. Invest in Crypto
I’ve read about a lot of people getting rich in cryptocurrency, but the truth is, nobody knows what is going to happen to that market. It is not necessarily the future of money; how could anyone possibly know that? There is nothing wrong with using the tried and true methods of investing.
10. Investing Is Too Risky
Yes, investing can be risky if you do not know what you are doing and invest in something silly. However, investing is a proven method to build wealth. Ask any financial expert, and they will tell you the same thing. Your salary will only get you so far. You will find that your investments will fluctuate, but consistent investing will benefit you in the long run if you stay committed to it.
11. Hustle 24/7
“If you want to be rich, you have to outwork everyone and hustle 24 hours a day, 7 days a week.” To me, this sounds like a recipe for burnout. Sure, you can work super hard and put in some extra hours, but taking some time out of your week to relax and see your friends and family is equally important. Life is too short; do your best with other pieces of money management advice and enjoy your free time.
12. Stay Loyal to Your Employer
Gone are the days when a person would get a job at a company, stay loyal, put in thirty years, get an annual raise, grab a pension, and retire. Nowadays, jumping around to different companies that will pay you more money is more common. If your employer doesn’t pay you what you are worth, then you owe them nothing. Chase the jobs that pay better and work your way up from there.