Don't take all financial advice literally


Financial advice is often very general in nature. Too often we can mis-understand financial advice or not apply it correctly. This leads to missed opportunities or even poor money decisions. Having an understanding and applying this advice to your situation is very crucial.
Let’s start with the most common, credits cards are a bad idea.
Credit cards are not inherently bad or good. It really boils down to how we use them. If we can pay the balance off each month, then the rewards, buyer protections and need to carry less cash are all benefits that everyone should be taking advantage of in their financial life.
Is a rigid spending plan the answer to solving your money issues?
Because most people want to have fun, building a rigid spending plan that cuts out all fun money and little indulgences is probably not a long-term solution. Sooner rather than later, anyone on this type of spending plan will almost always go on a spending spree and end up worse off than before. Moderation is probably the best solution – cut back spending but save a little fun money so you can still enjoy your life.
Do we really only need to save 10% to meet our retirement goals?
If you didn’t start saving at least 10% until you were 40, then very likely, 10% is not going to be enough to fully fund your retirement. This number is really a baseline and the later you start, the higher this number will need to be to reach your retirement savings need. The best way to know what you need saved is to put together a post-retirement budget.
Is it smart to pay all your debt off as quickly as you can?
This advice really requires a look at your full financial picture. All higher interest rate debt should be paid off as quickly as possible. However for mortgage debt and sometimes even auto loan debt it might be smarter to pay them off according to the term and invest the money you would have used to pay it off quicker. If your investment returns are higher than your loan rates then this strategy will benefit you more in the long run.
Should parents start saving for college as soon as their children are born?
This advice is great, if you are already full funding your retirement and you have paid off all your expensive debt. If you haven’t, saving for your children’s college should not be a priority until you have achieve the other goals. The only caveat would be if you can gain a tax advantage with your college funding.

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