5 Reasons Why Financial Advice Should Be Taken With a Grain of Salt


If you’re a frequent visitor of personal finance blogs or websites, you’ve read plenty of financial advice and rules of thumb. Since the information that’s fed to you is compiled for mass consumption, you should take each advice with a grain of salt. The information can vary wildly depending on the source and, more often than not, it reflects the experiences and values of the person or organization putting it together – not necessarily the hundred, thousands, or millions of people consuming it.

Don’t get me wrong – these sources can be hugely valuable in spreading financial literacy to those who wouldn’t otherwise have easy (or free) access to this information. The key, however, is being able to discern what information and advice fits for your life and your situation and what doesn’t keep your best interests in mind.

Managing money isn’t just about being a responsible and productive member of society. It’s also about learning how to work with the financial resources you have in order to create a sustainable and strong foundation for the life you choose.

Here are five things to keep in mind next time you read financial information or advice.

#1 We have different priorities.

While there are things most of us have to pay for – i.e. food, shelter, healthcare – the rest of our spending (and saving) habits are dictated by where our priorities lie. These priorities will shift and change throughout our lives, but they are a direct reflection of who we are and what we deem valuable.

Considering how different we each are, these priorities will likely be vastly different as well. While one person might like a massive house with bedrooms galore, another would exchange the large house for a tiny apartment and money to travel. If each person is spending well within his or her means, neither decision is superior – it’s about preference.

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If financial information dictates how each penny should be allocated, regardless of these personal priorities, it often times is not something actionable for just anyone.

#2 We have different comfort levels.  

For many, money represents a feeling of safety and security – or a lack thereof. As a result, feeling comfortable with how money is allocated and managed is important – and these comfort levels can vary wildly depending on the person.

While one person is perfectly fine with their entire nest egg allocated to stocks of someone else’s choosing, someone else might enter panic-attack mode if 90% of their money is in anything but bonds.

If financial information doesn’t take both the risky and risk-averse person into consideration, it’s not something everyone should be applying to their lives.

#3 We have different goals.

Goals are extremely important if we want to keep making financial progress in our lives. Many people will stress the important of one-size-fits-all goals – saving 3-6 months in an emergency fund, saving at least 10% of your income for retirement, etc. These are all noble milestones to shoot for.

But goals – the ones you really are motivated to act on – are unique to you. These are the things that will impact your life or your family’s life in a way that really excites you.

Some articles stress the importance of having your child pay for their own college education, but maybe this is something you’ve always dreamed of providing for them. If a goal aligns with your values, that is far more important than the advice of someone who doesn’t know your situation or share your priorities.

#4 We have different backgrounds and experiences.

Regardless of how much someone tries to separate their own opinions and experiences from the information or advice they share, it’s nearly impossible to fully compartmentalize the two. After all, it is these things that often dictate how we view and interact with the rest of the world.

Sometimes these experiences or opinions just don’t reflect what you believe to be true, therefore, it shouldn’t dictate your financial decisions.

Credit cards, for example, can be extremely polarizing in the personal finance community. After getting into mountains of debt themselves, some swear they lead down a path of financial irresponsibility and should never be used. Others utilize them often and pay them off monthly. Your decision in this regard should reflect your own habits and beliefs – not just the experiences of someone else.

#5 No one cares about our money like we do.

Most people that dole out financial advice or information have no consequences should it lead to negative consequences for you. That’s not their fault, nor should that undermine the good that the vast majority of them are trying to do.

But it should make you think twice next time you apply advice that doesn’t speak directly to your specific situation. No one is as invested in the health of your finances as much as you are. You are the sole protector of your finances and should treat that job with as much care and consideration as possible.

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