Money tips can be helpful, but it’s important to remember that not all advice is created equal. Let’s look at three common money tips that aren’t as great as their claim.
1: The latte factor.
The claim: Cutting out your daily latte will solve all your money problems.
The truth: Trimming discretionary expenses will only impact your budget if you cannot spend that money elsewhere. Also, while the six-dollar-a-day latte is not insignificant, it likely won’t make a huge dent in an underwater budget.
The fix: Consider if you want to do without your daily latte. If it’s your only indulgence, you may want to trim your budget in another area or buy it less often. Also, be sure to set aside the money you don’t spend on that latte so it doesn’t disappear. Finally, if you’re looking for a way to make significant changes to your financial situation, consider cutting back on more significant expenses.
2: Cut up your credit cards.
The claim: Get out of debt by using scissors on your credit cards.
The truth: You can still accumulate debt with your cards in many pieces. Also, destroying your cards won’t help you kick a tendency to overspend. Finally, having some open credit cards is essential for your financial health.
The fix: If your credit card debt is out of control, take steps to rein it in. First, create a detailed monthly budget that assigns a dollar amount to every expense. Next, plan to pay down your outstanding debt. Finally, look for ways to trim costs or boost your income to get out of debt sooner.
3: Follow your passions.
The claim: Do something you love, and you’ll never work a day in your life.
The truth: Passions don’t always pay the bills. In fact, choosing a career based on passion alone can mean a lifetime of financial struggle.
The fix: It’s best to work at a job you enjoy that also pays the bills. When choosing a career path, look for occupations that use your passions, but also consider the pay scale for each and how much income you’ll need to cover your expenses. If your numbers line up, you’re good to go. Otherwise, you’ll need to adjust your career dream or lifestyle. Consider a job that plays to your skills, if not your passions. This way, you’re more likely to succeed in your career and find it fulfilling. You can also start a side hustle that utilizes your passions.