Welcome! This article on how to identify bad financial advice is part of our Financial Literacy Month Series. Click here to read other articles in this series. 

Ever had someone give you well-meaning advice that caused you to pause and think twice…maybe three times???

There are people in our lives that truly mean well but are absolutely financially clueless.

I had a conversation with some girlfriends this weekend that made me really stop and think of some of the advice I’d received and given. This led me to think about when financial advice goes bad … and the repercussions when it’s taken.

Signs you’re a victim of “when financial advice goes bad”

  • Consider your source and their intentions – what’s their current financial status; will they benefit from their advice directly or indirectly; would they take the advice they are offering up? All of these and more questions to ponder when 
  • If your gut reaction is “HUH?!?” then you probably want to think again
  • The returns and/or savings seem way too much for a little bit of investment or work on your parth
  • The advice includes absolute terms (always, never, etc). What’s right for me may not necessarily be right for you – it can vary based on our personal situations and long-term goals.

When financial advice goes bad

A Good Financial Advisor should be:

  • knowledgeable about different financial options, situations and 
  • trustworthy – they’re dealing with your money, your livelihood and your future. Need I say more?
  • experienced with a successful performance background
  • accessible to respond to your questions and concerns
  • passionate about their work and making your money work for you
  • willing to share their knowledge with others to help financially empower others

 

Sharing time Divas!
Have you been a victim of “when financial advice goes bad”?
What’s the worst financial advice you’ve ever received?

I’ll go first – I had a friend tell me that saving for a raining day was pointless because you could always buy an umbrella and charge it to your credit card. So thankful I didn’t listen to that one!

Budgeting Divas Newsletter

April is Financial Literacy Month! See all posts in this month’s series by clicking the image below:

Financial Literacy Series

  • Was able to save ample amount of money in the bank now compared to last year. I am holding my own seatbelt not to buy more stuff.

  • This is very indeed a good article, makes me think and look back.

  • Nicole A.

    I don’t take advice from too many friends. Not many of them are in the same financial situation I am.

  • Chubskulit Rose

    I got criticized one time for being a penny pincher but I don’t care, as long as I am managing my finances that way it should according to our budget needs and resources, they can say whatever they want.

  • It is always hard to know if you’re getting good or bad financial advice you can have to trust the person their experience and knowledge have for you check them out before you decide to use them

  • becca112971

    very informative article thank you

  • healy088

    I am glad that I always follow my instinct! Maybe the reason why I have not a victim of “when financial advice goes bad”

  • My worst advice received was to open up individual store credit cards-i.e. The Limited, Express, etc.- when in college. Racked up a ridiculous amount of interest. Someone should have said, if you get a credit card, apply for a major one, like MasterCard, which can be used at any store.

  • I never thought about a financial advisor giving bad advice. I’m glad you wrote this to bring awareness to it. Those tips are great too. We hope to get an advisor some day and I’ll be sure to remember these when we are selecting one.

  • There are also those friends that “Do Research” but doing research does not necessarily translate to know when certain situations call for certain strategies. I used to work in the financial industry and I was surprised to learn how many of us are brilliant but not so much when it comes to our money. Great advice!

    • Michelle

      It reminds me of the State Farm “I saw it on the internet” commercial – so many people believe just because it’s written out there somewhere then it’s the gospel truth and sure to work solution for everyone.

  • This is a great article!! Wonderful advice!!

  • Great advice! I have a friend who is always suggesting stocks to buy. Um… no thanks! 😉

    • Michelle

      Exactly! Unless, of course, they are a stockbroker 🙂

  • I have been doing great this year managing my money and saving more. Solid advice in the article. It has definitely encourage me to save more and think before I spend elsewhere.

    • Michelle

      Way to go on doing so great this year! Glad to have provided some encouragement!

  • Great article, good advice!

    • Michelle

      Thanks Janeane!