By Laura Woods
WWR Article Summary (tl;dr) Women and Money, we here at WWR are always on the lookout for great advice for our community. But you know what, sometimes we get some awful advice! Here is what NOT to do.
Your friends and family members are probably great resources to turn to if you have questions that relate to certain aspects of your personal life. But when it comes to your money, you should be very critical of who’s giving you the advice and of the actual advice itself. Otherwise, the wrong financial advice can lead to some serious consequences for your wallet and possibly even your credit score.
So, if someone ever gives you one of the following five of “advice,” politely nod your head but disregard everything you were told. The person probably had good intentions, but you don’t want to fall victim to these common misconceptions.
BUY MORE TO SAVE MORE
Many people get carried away at stores like Costco and leave with a case of cereal instead of just one box, but that’s not always the best idea. Buying in bulk might seem like an obvious way to save money at first glance, but purchasing something at 50 percent off is still 100 percent wasteful if you don’t use it all. Plus, it’s easy to use more of these items than necessary, rather than pacing yourself, just because they’re right in front of you, ultimately resulting in zero savings.
YOU CAN’T TAKE IT WITH YOU, SO WHY SAVE MONEY?
A spend-happy friend or family member might use this excuse to chastise you for being frugal. It’s true that you can’t take money to your grave, but that’s an irrational reason for spending freely and worrying about the consequences later. After all, odds are your overspending habits will catch up with you long before you “cash out.” And while you can’t take your debts with you either, you can leave a mess behind for your loved ones to clean up.
IT’S CHEAPER TO BUY A NEW CAR EVERY FEW YEARS THAN TO HOLD ONTO AN OLD ONE
Sure, it’s tempting to buy a new car every few years, especially if you keep getting raises at your job and can afford to buy the latest and coolest cars. And yes, sometimes buying a new car and getting rid of an old one can reduce your overall expenses. But be aware that every time you buy a new car, you’re most likely going to face new monthly car payments, insurance payments, taxes and more.
Consumer Reports offers a good tip if you’re unsure if you should hold onto an old car or buy a new one: If your annual car repair bills exceed a year’s worth of car payments, it’s time for you to get a new a car. So, keep the clunker as long as you can, even if it is more than just a few years.
YOU DON’T HAVE ENOUGH MONEY TO FOLLOW A BUDGET
No matter how much, or how little, money you have, it’s always important to be financially responsible. In fact, one could argue that the smaller your cash flow, the more important it is to follow some type of budget. Following a budget helps you monitor your finances regardless of the amount of money in your account. Plus, after following a budget for a few months, or even a few weeks, you’ll see an improvement in your spending habits and an increase in your savings.
IT’S CHEAPER TO EAT FAST FOOD THAN TO BUY GROCERIES
This ridiculous rationale is the mantra of those who hate to cook. But barring a few rare exceptions, it’s simply not true.
According to the United States Department of Agriculture, couples in the 19- to 50-year age range following a modest food budget spend approximately $142.70 per week on groceries, as of December 2015. However, consumers spend an average of approximately $7.25 per person on fast food, according to a Citi Research survey of 18 popular fast food restaurants via Business Insider.
So if a couple eats three meals a day and spends a total of $14.50 per meal, that would cost them a total of $304 a week. Clearly, it makes more financial sense to buy groceries rather than eat fast food for every meal. Plus, it’s healthier.
Laura Woods writes for GOBankingRates.com, a leading portal for personal finance news and features, offering visitors the latest information on everything from interest rates to strategies on saving money, managing a budget and getting out of debt.