As an avid reader, personal finance enthusiast and blogger I read a lot of content online.
Some of it is good, a small percentage is amazing, and some of it is just garbage.
Personal finances are one of those topics that really get people heated because everyone wants to act like they know what to do with their money.
But I’ve read a few financial tips this year that just makes no sense.
Understanding your finances isn’t easy as were never taught anything useful for finances in school.
This is one of the biggest reasons I wrote my first book, Advice for My Younger Self.
But if you don’t understand your finances it’s tough to live your best life.
These four tips are so dumb I just can’t help but clear up…
No Avocado Toast
This might be the funniest (and dumbest) article I read this year:
Melbourne Property Owners Hammers Millennials Over Spending Habits
The article premise is a 35-year-old Austrailian millionaire telling millennials the reason we aren’t able to buy a house is that millennial waste money….on $19 avocado toast and $4 coffees. 
- Where in the hell does avocado toast $19?
- Even if it was $19 I would have to “stop” my toast buying habits several decades for it really matter.
- No one is ever going to stop buying $4 coffees — it’s legal crack to help get people up and make it through jobs they probably hate.
I get his point, people often overspend on some things but not enough to make a down payment on a house.
I’m with Ramit Sethi on this topic — most personal finance “experts” always want people to spend less. But why not make more so you can still treat yourself to coffee, avocado toast and fun experiences like travel?
As Ramit Sethi said, “The median price of houses listed in America is $245,000. (Laughable, since the median price of an apartment in NYC is over $2 million, but just go with it.) If you want a 20% down payment on that $245,000 house, you’ll need to cut back on 2,578 avocado toasts. At one $19 toast per week, that would take you 49 years to save a 20% down payment.”
Well said Ramit, well said.
If you don’t know who Ramit Sethi is I highly encourage you to check out his website, iwillteachyoutoberich.com as he’s one of the top bloggers/entrepreneurs online. His book, I Will Teach You to be Rich, is one of my five favorite books about money.
Needless to say, the avocado toast isn’t the reason you aren’t able to buy a house.
Related: 40 Ways to Make Money Outside of Work
No Debt
My next favorite personal lie is “Debt is bad for you — eliminate all debt immediately.”
This one just isn’t true because there is more than just one type of debt in the world.
Bad Debt
Credit Card/Store Cards
Credit card debt is one of the worst types of debt because of the high-interest rates and major implications on your credit score if not used properly. If used correctly you can build your credit and score some great rewards.
Auto Debt
Depending on your financial situation, auto debt may not always be the best idea for your long-term credit either. I always recommend buying used, negotiating good terms, and not overextending yourself.
Good Debt
There is such a thing as good debt as well — without any debt at all it’d be nearly impossible to buy a home or get an education.
Student Loan Debt
Student loan debt can cause a financial strain on your life but usually necessary to secure an education. You want to eliminate this as soon as you can as it can be financially and mentally draining. See how this blogger paid off $87,000 in 2.5 years!
Related: Millennial Dilemma – Debt Free or Save for Retirement
Real Estate
Without debt, 99% of people wouldn’t be able to own a home or buy any real estate. If you have good credit and secure good terms, a mortgage is a necessary debt for most people to become homeowners.
For example, my house was $179,000 — cheap compared to the average house in America $245,000. I would have waited a long time to be able to pay it in cash instead of the 20% down payment.
Mortgages are also a great tax deduction and when paid consistently on time can benefit your credit score.
Ditch The Credit Cards Pay
I love Marc Cuban but I can’t get on board with “use cash for everything — avoid credit cards.”
I understand the premise of it — by paying in cash you will never overextend yourself. Credit card debt is a major problem in the US with an average of $5,700 in households with debt.
But if you never use credit cards, you will also never build your credit.
Without a high credit score, you have almost no chance of securing a loan for a car, house or potential employment.
Instead, I recommend paying for everything with credit cards that offer rewards such as miles, 0% interest rates, or cash back. I pay each card off in full every month and take advantage of the credit card provider for helping me foot the bill for 30+ days.
If you pay your credit card in full, on time every month, you will build your score and never pay credit providers a dime.
No Spend Challenges
Like the others above, I understand the premise here but a no spend weekend, week, or month (seriously, I’ve seen people claim it) just isn’t for me.
Instead of always saving, saving, saving, why don’t people try to earn more money?
Don’t get me wrong, being smart with your money is important to living your best life. I love shopping at the $1 store or clipping an online coupon for my pizza order as much as anyone.
But creating a side hustle, asking for a promotion, or investing in yourself to learn more skills will help you earn more money.
Final Thoughts
There is a ton of great personal finance advice out there but these ones are just horrible advice in my opinion.
Don’t be afraid to splurge on an occasional piece of avocado toast, enjoy a coffee, or be afraid to get into debt to become a first-time homeowner.
At the same be smart with your money, invest early, maintain a high credit score, and earn like crazy.
Want more financial habits of success? Be sure to check my book Advice For My Younger Self to learn more.
Any other financial advice out there you think is garbage?
Let me know in the comments!
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Michael Leonard
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We use mostly cash back cards and pay them off every month. With all the bonus categories that we target for each card, we get a few hundred bucks back. That’s free money.
Love it — that is the beauty of paying your cards each month plus improving your credit score 🙂
Haha, loved this post! The avocado math really had me.
Thank you for sharing!
xoxo,
Ana – Blogger at http://www.TheSheApproach.com and big supporter of women who are building an empire online through blogging!
Thanks Ana — the avocado one was so funny!
You are right, taken as blanket statements all 4 of these pieces of advice our pretty dumb. If credit cards are paid off in full each month, they offer great advantages, and good student debt (in which your increased earnings exceed your new loan costs) can help advance your earnings, and mortgage debt does allow one to become a real estate investor, which again can increase one’s earnings. As for the first point, on spending less, I feel this is the easiest way to get started almost anyone can reduce spending immediately. Reduced spending in a few key areas can end up with thousands more dollars per year in your pocket!
Now if only I could start to increase my earnings without costing me time away from my kids – I’d be onto something.
You nailed it perfectly!! Thanks so much for reading
All pretty valid points, Michael! Avadaco toast isn’t going to deny you from your $$ goals (unless you have a crazy obsession) but choosing to live in an expensive apartment without roommates might.
I would recommend credit cards to any disciplined person that won’t accrue debt in the process. I earn thousands of dollars each year in value from travel credit cards that I pay in full each month. Lots of great value cards out there.
Thanks Gary! I agree I love getting air miles and other rewards from my credit cards every month!
I would probably not spend 19 bucks on toast, but that avocado toast looks so good I’m gonna have to make my own! Thanks for the great money tips!
Chad @ theroyalbrew.com
Hah well said — thanks for reading Chad!