We all know the phrase, “let me offer my two cents.” Regardless of who says it, it only ever means one thing- unsolicited advice is coming. Sometimes the advice is actually worth two cents, but often the advice offerer has overvalued their opinion. In that case, you’re stuck with what I call Penny Advice- those unsolicited opinions that no one really wants, and that just end up clinking around loudly in your head until you can “accidentally” drop them on the sidewalk and leave them behind.
As a finance blogger, I hear a lot of penny advice about debt and student loans. Each time I hear a new one, I write it down and add it to the list. The following are the top 10 worst pieces of debt advice that I’ve heard, presented for your enjoyment.
- “Spend within your means.” This makes the list for being both stupidly common sense, and wonderfully ambiguous. It’s the corporate jargon of the debt world. We’ve all heard it, but do we really know what it means? Obviously, don’t spend more than I make, but in what time frame? Don’t spend more than I make in a week? In a month? In a year? Society tells men to spend 2-3 months salary on an engagement ring, and the general rule for car buying is to not spend more than you make in a year. Nowhere in this advice do you mention that I ought to have that money in my hand (ie SAVE IT FIRST ) before making a purchase. This leads right into number 9.
- “Credit cards are evil.” Once again, fairly common sense but ambiguous advice. For the younger sect like me, we need a credit card to build our credit rating. Even if we don’t plan to finance anything, potential employers will pull our credit scores to see how we are managing our money. No credit card means no credit score, and therefore no job. Also, let’s face it- we don’t all have emergency funds. We should, but we don’t. It boils down to this: don’t go crazy with the credit card. Just because we have a $5,000 line of credit doesn’t mean we need to use it. Spend within predetermined monthly means. If we carefully examine the pros and cons of credit cards, we would realize that it is still better to consider money lender Singapore than to empty our pockets by just paying credit card obligations. So we really have to be careful on when we spend our money.
- This implies that I have not fully explored all my options, and that I’m making a yet another poor financial decision. It also sort of implies that I’m not smart enough to navigate the perilous financial waters on my own. Now, it is possible that you have some knowledge of a new program that I am not familiar with, but there is a better way to frame this question. Ask me why I’ve picked a certain debt-reduction program. That gives me the chance to prove that I’ve done my research. If I haven’t, then you can bring up what you know.
- “Things will get better soon.” This is a wonderful sentiment, and I thank you for the encouragement. It is not, however, actually helpful. Please do be supportive, as I need to hear that, but maybe only say these sorts of things after you’ve let me whine about my debt over a cup of coffee, or as I launch into a monologue about debt for the hundredth time.
- “You could always sell your iPad/car/computer/blood/soul.” All right. Can we all assume that if I’m serious about getting out of debt, I’ve already taken inventory of my possessions? Perhaps I’ve even, as Dave Ramsey says, “sold so much that the kids think they’re next.” Even if I haven’t sold off all my worldly possessions, you can rest assured that I’ve looked into it. The price of a soul is not what it used to be, you know. Also, I probably need those “fancy” things like a car and a computer to earn money- after all, don’t you?
- “That’s nothing, my best friend’s daughter went to Harvard medical school and she owes $200k” DO NOT BELITTLE MY DEBT. Pure and simple. I know you’re trying to put it all in a rosy perspective for me, but I can assure you that telling a bill collector, “Well, Mrs. Donavan’s daughter, Nancy, has a much higher balance than me” will not get said bill collector to hang up and call Nancy instead. Rather, they will continue to insist that *I* send them a check. Tell me that Nancy owes $200,000. That actually will make me feel better about my current balance, but don’t try to one-up me.
- “How did you ever get yourself into this mess?” Don’t ask me to relive my financial mistakes for you. If you don’t already know, chances are that you’re not a good enough friend to need such information . Spilling my financial guts to you will only a) make me feel bad about the choices I’ve made, and b) make you think less of me because I’ve made poor decisions. Save us both the grief, and compliment me on my efforts to get out of debt. It doesn’t matter how I got into the hole, what matters is that I’m trying to climb out.
- “Here’s $20‚Ä¶” While most of us will very rarely turn down the offer of free money, this doesn’t really help (unless you are planning to write a check for the entire balance of my student loans, at which point let me mention that it is currently $69,318.15 ). True, I may need that $20 to get groceries, gas, or clothes (or CDs, DVDs, video games, etc ), but you’re also wounding my pride by handing me cash. You’re implying that I can’t manage my money well enough to keep myself fed or clothed (or entertained ). If I haven’t asked you for money, don’t offer it. Instead, fill a specific need like paying this month’s water bill or buying an extra loaf of bread and jug of milk at the store (or let me burn a copy of that new Coldplay album ). It will let you help me without beating me down more.
- “You should have known better.” Ok, how is this advice? It’s not, and it makes me furious every time I hear it. It’s arrogance and prejudice and a few other things that would make this entry NSFW. Of course I should have known better. I get it. In fact, I’d wager that everyone in debt understands that concept. You reminding us of our mistakes doesn’t help us get out of debt any faster, just like shaming a person with depression will not make them snap out of it. Either offer some good advice or please keep your opinions to yourself.
- “It’s not your fault.” This one is my absolute least favorite bit of debt advice. It’s a cop-out, and it’s a lazy cop-out at that. Of course it’s my fault that I’m in debt. No one held a gun to my head and forced me to sign the promissory note. (Note- if someone has done this to you, I’m pretty sure that makes your debt invalid ). This is true for all kinds of debt. We all got ourselves into this mess: we spent beyond our means, we didn’t take the time to make sure we understood all our options, we let ourselves get sweet-talked into refinancing, etc. We all made our choices. We gambled on the world being different, and we lost. Now we have to pick ourselves up and dust off our wallets. It’s time to take personal responsibility and teach future generations that blaming others isn’t going to fix anything. Leave behind a financial legacy that you can be proud of, rather than one from which you spent your life running.