What's the best financial advice you've been given?
Whatever your politics, you have to love Barack Obama for his ability to say more with less.
For instance, we’ll concede that – again, aside from how you feel he’s performed as President – he’s probably the smartest guy in the room more often than not. So that’s why I got such a kick out of the advice he gave at a conference for money writers this week.
When asked, at a time when homes are still underwater and consumers are starting to lose their confidence again, what the best financial advice he’d ever received was, Obama said, simply: “Don’t spend all your money.”
A genuine principle. But you could almost sense the Democrat’s urge to reach out and grab every American living off unemployment but still paying for an iPhone 4 by the throat and yell, “You hear me, dummy?! Do you see what you idiots are doing? Stop! Stop spending everything! For the love of God!”
Anyway, that’s just a long-form entry to today’s blog topic, which – in honour of Obama’s restrained plea for fiscal responsibility – centres on the best financial advice you’ve ever received.
To be sure, money pep talks come in many forms. Advice could merely come by the way of your parents asking “What do you need that for?” every time you buy something as a kid. Pepper it into your child’s mind early that “needs” are different from “wants,” and you’re well on your way.
Another key piece of advice (aside from the basics: save, and separate “want” from “need”) comes from an MSN Money poster in 2007. “Don’t pay interest on anything that loses value.” This is pretty solid, though probably runs contrary to everyone that’s taken out a loan/financed a car over payments. That would include yours truly.
Other one-liners can also fit the bill here: “Don’t gamble more than you can afford to lose”; “If you need more money, go out and make it”; “Money will buy you a fine dog, but only love can make it wag its tail,” etc. Different advice for different people.
What money advice do you live by? Who gave it to you?
By Jason Buckland, MSN Money
Posted by: Pengu | Jun 17, 2021 10:17:35 AM
Same thing when the US government offered free cellphones and free minutes to "qualified" people such as the elderly and unemployed... for those "important" calls... such as emergencies, looking for jobs, job interviews, etc. Ever see the 2 commercials which promoted this free cellphone initiative. One old lady yapping away with her grandkids via long distance and two young valley girls yapping with each other and talking about a date with some guy... saying "Give him a call, Give him a call" Hmmmm... important emergencies weren't they !!! And ALL on the taxpayers' back !! Idiots !!
Posted by: Pengu | Jun 17, 2021 10:25:59 AM
Worst Money sucking "inventions" in the past 15-20 years. These two are just the tip of the iceberg when it comes down to the "new" generation NOT being able to save any money.
1. Cellphones and Text-messaging plans... especially in Canada. You practically need a separate job just to afford those expenses. Keep on yapping though. It's all about being "cool"
2. Cash before Payday outlets... still don't know why the government hasn't shut down these types of operations. You can get $50-$100. BEFORE payday to go out and party and get drunk with your buddies and you end up paying 30% in service or interest fees for the pleasure of spending the early morning hunched down over the toilet.
Posted by: tes | Jun 17, 2021 12:45:22 PM
Spend less than you earn, don't use credit cards, cash advance, cell phones for chatting endlessly, save and share when you can afford it.
Posted by: Northern Ontario | Jun 17, 2021 2:04:11 PM
I've read many books on finances. I've taken advice on many concepts but the basic one is to set your lifestyle based on your income less 20%. I sock away the first 20% into investements and pretend my actual salary is 80% of the actual amount. There are times that I want to reduce the 20% to 10-12% so that I can purchase things I don't really need like "pleasures crafts" or more vacations in hot climates. However, I really don't need those things and manage to do just fine within my means. I also see the pension plan growing quite nicely which is rewarding.
Posted by: Wlson | Jun 19, 2021 10:06:28 AM
I agree and live by the concepts mentioned by the previous posters. I do have many credit cards, however, but in the 45 years that I have used them, never once spent a penny in interest. There is nothing wrong with credits cards, just pay the balance (not the minimum) when it is due. I also agree with the advice "Don't pay interest on anything that loses value" in the article. This can be difficult for many people when buying big ticket items, such as a car. I did once buy a car and got a 4 yr loan on it with 0 down. The loan was 0% interest, so doesn't really count.
Posted by: Western Guy | Jun 20, 2021 12:04:47 PM
Well Wilson while I like most of what you say your last comment is the one that shows a lack fo financial knowlegde. You say buying a car with 0% interest means you aren't paying interest. This is incorrect. It just means that the interest is already incorporated into the price for you. Ie. the car might have cost $20,000 on the 0% interest savings plan but if you had offered cash you probably could have gotten it for $18,000. The interest cost has already been included in the price.
My life maxims:
Buy low and sell high (P.T Barnum).
There is a sucker born every minute. Try not to be that sucker all the time.
A fool and his money are soon parted.
You can be conned out of your money. (By knowing this fact I am always extra wary about the deals I enter into).
Posted by: Bernadette | Jun 21, 2021 2:26:33 PM
When I was teaching in Japan, I received my pay once a month...in cash. Japanese people pay cash for EVERYTHING...including refrigerators and cars. It's awfully hard to get into debt that way.
Also, as many have said, save 20% - if that means you have to live in a 1-bedroom apartment instead of a 2-bedroom, own a modest bungalow instead of a showy dream home that's mortgaged to the hilt, or buy a 4-year old car for cash instead of financing a new one, so be it. Lose your job, and you can lose all those other more-than-is-really-neccessary lifestyle luxuries pretty fast. I finsished studying for ordained ministry in the church 4 years ago and have been unemployed ever since. If I lived like the average Canadain, I'd have been on the street by now. Since I've always saved that 20% of my income and lived quite happily and comfortably at not very far above a student level, I've had that money to draw on during these years of unemployment and still have a roof over my head.
Posted by: binder dundat | Jun 21, 2021 2:45:00 PM
spend less then you make...very simple, the entitlement generation has it all wrong and will suffer big time when retirement comes around.
Posted by: SP | Jun 24, 2021 7:02:59 PM
Best financial advice I given was to marry the right woman and don't get divorced. In the present times the advice “Don’t pay interest on anything that loses value.” has an ironic twist, as in the USA now and in Canada in a few years both Homes and Education are losing value faster that people can try to redeem them. Just ask anyone with a PHd working at McDonalds or a mortgage for 2x the houses value in Florida. On the bright side it eases the pain of having never owned a McMansion.
Posted by: PhilG | Jun 30, 2021 3:41:49 PM
Don't ever buy a permanent life insurance policy and don't go to banks for financial management advice!