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Savvy money advice is a hard thing to come by these days.
With help from our favorite finance experts and readers, they've shared the lousiest money advice they ever received (and boy, have they heard some doozies).
1. Put It on the Card, Even if You're in Debt
Brenda Della Casa, managing editor at the U.K. wedding site I Am Staggered has heard this a few times before. "It seems to give people a level of comfort that others can survive, but the reality is that people are not surviving in debt," says Flexo, finance expert at Consumerism Commentary.
"You can lose your house, lose your possessions, and you shouldn't think just because someone appears to be surviving that it's going to be possible for you."
2. A Pay Raise Means It's Time to Upgrade Your Lifestyle
After landing a new job, Krissy Pomerantz was overwhelmed. Should she buy her own place or start paying her loans?
"When people get a raise and they've managed to live comfortably on what they earn, there's no reason to upgrade their lifestyle," Flexo says.
Toby Johnston, a CPA with Mohler, Nixon and Williams in San Francisco, agrees. "This mindset can keep you trapped in a paycheck-to-paycheck cycle that leads to debt," he says. "And if we spend exactly in proportion with our income rising, then we'll still wind up with the status quo."
3. Open a Store Reward Card to Save
Saving 20% on today's purchase might sound smart, but you'll forget all about it once you see your credit score.
"Credit card companies count on these people messing up and paying large interest," Flexo says. "And they're counting on a lot of people not paying them back. Add in the fact that these issuers often 'forget' to send statements, and you can easily rack up interest and late charges."
4. Roommates Are for Outcasts and Freaks
Family friends wouldn't stop nudging Flexo to get his own place when he graduated college.
But he knew better: Not only does having roommates help keep down households costs, the money saved can be put toward goals like an early retirement. Had he borrowed to buy or rent his own place, Flexo says he would have put himself in a worse financial situation than he already was in.
5. Pay the Minimum Balance on Credit Cards
Following this suggestion would have been a one-way ticket to slavery. You're basically turning a portion of your paycheck to your lender, says Flexo.
"Since you have to pay them first, you're not able to live your life with the money you make because it's obligated to someone else." Likewise, you'll never be free if you continue to stretch out your payments. It's better to pay them off quickly so you're free to move on and start that emergency fund.
6. Don't Bother Contesting a Bill, Just Pay It
"It always makes sense to review your bills and not just accept what a company is charging you, whether it's in the initial stage of getting a service, or getting the bill after the fact," says Flexo.
Any time when you get a bill and it doesn't match exactly what you expect it to be, you need to take care of it by becoming aware of what you're paying and why.
7. You Only Need Good Credit if You're Applying for a Card or a Loan
Justine Rivero, credit counselor at CreditKarma.com, hears this a lot, but says to watch out.
"Your credit score can impact you in number of other ways, such as if you are being interviewed for a job, renting an apartment, renting a car and even getting a cell phone service plan," she says.
And while you may not be applying for a credit card or loan at this moment in time, you may consider it in a few months or years. "You’ll need to stay on top of your credit score for the time being so you can be prepared with excellent credit when the time comes for you to apply for a financial product," she says.
8. Investing in Real Estate Is Easy (and Lucrative)
Those glamorous TV shows make it look so easy, says Chris Skiles, associate art director at Seattle Metropolitan.
His friends have insisted he try this, but successful investors never tell you how much it really costs.
"Saying housing is the best investment possible since the market will always go up in value over the long term is clearly not true as illustrated by the recent downturn," says Andrew Schrage, finance expert with Money Crashers.
"This mentality has caused a lot of people to lose their shirt in the housing market," including the experts.
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