How Bad Advice Leads to Bad Decision-Making
Taking someone’s money advice as gospel without careful thought and research is one reason why people may make poor financial decisions. Emotions are another. Debt can bring on feelings of helplessness, low self-esteem, and loss of hope. It’s also linked to depression and anxiety. When these emotions overwhelm you, you might feel desperate enough to follow bad financial advice, just to know you are doing something.
Tips for Avoiding Bad Advice
There are ways you can protect yourself from the traps of bad financial advice. Consider these suggestions:
• Carefully assess whether the advice someone gives you makes sense for your lifestyle and money goals. If you have any doubts about what they’re touting, trust your gut and don’t follow it.
• Educate yourself on the basics of personal finance by listening to podcasts or reading books written by credible money experts. You can also find accurate information and finance articles online on sites such as consumerfinance.gov .
• Avoid taking money advice from random people on social media. Many of the social influencers who tell you how to get rich aren’t always legitimate and often make claims that are too good to be true.
• When in doubt, seek out a qualified professional. Make sure you’re seeing a certified financial advisor or certified financial planner. Although they’re not licensed to give you the same type of financial advice that a planner or advisor does, a financial coach can help you understand the fundamentals of finance, attain goals, and develop better money management skills.
There’s no shortage of bad financial advice out there, and some of it might even sound good. It can encourage reckless financial behavior, whether that means overspending on YOLO (you only live once) moments or not worrying about saving for retirement until it’s too late. It’s wise to remember that solid money advice will come from trusted sources and be tailored to your specific situation, needs, and goals. Do due diligence before letting someone else’s advice sway your money management plans. You could dodge some serious financial risks.
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