Oh, money. We can’t live without it and there is seemingly never enough of it. Between necessities like rent, bills, treating yourself to a new lipstick now and again (yes, this is necessary sometimes), or saving for your best friend’s destination wedding next fall, money can cause a lot of anxiety. Even if you have enough of it. A lot of the stress surrounding financial anxiety is that everyone seemingly has an opinion about the “right” way to do things. But there’s a lot of money advice out there that is complete bullcrap and you should take into account where the bad money advice is coming from before you start to freak out that you don’t have any investments, or aren’t planning on buying a home anytime soon.
Then again, not paying attention to people who know what they’re doing with money or avoiding your financial situation is not a good plan of attack. If opening your mail gives you a panic attack because you know you owe a month or two on your credit card bills, you’re doing it wrong. Just like any other kind of anxiety, facing the problem and having a financial road map is the only way to get rid of it. And believe us: Getting your money in order is empowering AF.
Here’s some money advice that might be BS.
1Buying a home is better than renting.
What is everyone’s obsession with Millennials buying homes? Ever since an article went viral about young people spending too much on delicious avocado toast instead of saving for a home, people have been weighing the pros and cons. But when it comes down to it, the handwringing about buying homes is total B.S. Yes, we all pay too much in rent. But the flexibility of renting a home, and splitting costs with roommates, can give you some flexibility. Financial advisor Lauren Bowling writes that a lot of people forgot how consuming owning a house is. You’re responsible for repairs, inspections, and tons of other fees that Bowling says many people don’t budget for. If you’re on the fence, hold off until you’re really ready.
2Saving for your kids’ college comes above everything.
Yahoo Finance reporter Jeanie Ahn tells HelloGiggles that she hates to watch new parents start saving for their kids’ college tuition instead of retirement. “Parents think ‘oh well, I’m going to be selfless and put money away for their tuition, and work forever,'” Ahn says. But that’s so not the case. There are tons of ways for children to go to college without saving for their tuition. Whereas in retirement, there won’t be tons of ways for parents to get the money they need without depending on their children. Ahn says, “Parents need to think of themselves first, and it’s not being selfish, it’s actually helping your children down the line … It’s a bigger help, so you can rely on them as little as possible.”
3You have time to save for retirement.
Okay, break out the anti-anxiety breathing tricks because here it comes: People aren’t saving enough for retirement in general. According to Ahn, you should start saving for retirement as soon as you start making your own dough. “People are just not saving for retirement generally. Whatever you can do beyond your 3-6 month emergency fund,” Ahn says, is helpful. It’s hard to imagine, but things won’t always go as planned. According to the Center for Retirement Research at Boston College, “three-fourths of people in their 50s experience divorce, the death of a spouse, job loss, physical frailty for themselves or a loved one, or a combination.” Planning ahead is necessary so you can confront these problems without having to freak out about not having access to money.
4There’s such a thing as “good debt.”
There used to be a myth that carrying a small balance on your credit card was good for your financial future. That’s total nonsense. For businesses, debt can be a good thing, but when it comes to personal finance, you don’t want debt. Insanely, you need to have a credit score to rent or buy a house, or lease a car, and all of those other things adults do. If you’re scared of a credit card and have parents or a partner who adore you, FICO lets people “piggyback” on other peoples’ cards by naming you an authorized user. You can build credit in their name.
But you should pay off your credit card balance in full if you can every month. Or as much as you can. According to Equifax, “This may only be a good idea if you have an emergency fund that’s substantial enough to cover your expenses for a minimum of three to four months.” So it all depends on the circumstances and your cash flow.
If you’ve already accumulated some high balances and feel stuck, it’s okay. Breathe. Then make a list of your credit cards, the balances, and the interest rates on each one. There are methods you can use to pay down your credit cards — you can play around with the one that makes most sense to you, but don’t sleep on those interest rates, since time is literally money when it comes to accumulating interest.
5If you’re not good with money, let your partner do it.
When you decide to get married or partner up with someone, it’s easy to let another person handle the finances. Especially if you think you’re not good at it or investing confuses you. But don’t do this, Ahn says. “it’s okay to divide certain bills, so that you’re not wasting time on the same thing, but you should be on the same page about investments and higher level money decisions.” Remember that terrible stat about divorce, death, and retirement? It’s the same principle. Things happen. So you should know what investments your partner is making, how to access the funds, who the beneficiaries are, all of that stuff.
Just like facing our debt, this can sometimes be scary. But you have to face the fear, and get all the deets. Then, save the file somewhere and go have a nice date night with your life partner, knowing that you have everything under control.
6You don’t need a budget.
There are things in life that you can wing, and there are things you cannot. Not having a budget is not one of them. You might think that you don’t even make enough money to save or invest — especially if you’re just getting started and living paycheck to paycheck. But there are ways to save — you just might not like them. Ahn says, “You can get rid of your Netflix, you can get rid of going out to eat once a week. There are ways you can live so you’re making smarter decisions.”
You need to sit down and look at what you really bring in and where you’re spending. There are cuts you can make here and there. Instead of going through and finding the big ticket things to cut out, look for same kind of charges you make a few times a month and cut them by 10 percent, financial guru Suze Orman suggests. Take that money to pay off a credit card or put in a savings account. Even if you feel broke, you can (and should!) save.
7You have to do it alone.
Hey, by the way, you don’t have to do all of this budgeting and planning alone. If everything seems overwhelming, there are places to turn to. You can go to a credit counselor (sometimes for free) to work through all the steps. Check with your bank or credit union to see if there are ways to make appointments with a counselor or even just someone to ask the hard questions about your debt or an investment plan. Most cities have non-profits or city-sponsored “financial empowerment” organizations where you can go to get low-cost help, too.
Worst case, ask a friend or family member for advice or to sit down with you and get things in order. Whether you’re trying to get out of debt or figuring out how to invest some money, asking for help is the best way to go. It can be overwhelming sometimes, and it doesn’t have to be. “It’s not rocket science,” Ahn tells us, “if you take a couple hours to set things in place” and then leave it, you’ll be in a much better financial position.
Either way, taking charge of your finances shouldn’t be scary. Just make sure you’re taking the right kind of advice.