Ignore All Those Financial Tips Your Parents Taught You

When it comes to personal finances, your parents’ advice—begging or, more often, unsolicited—probably reflects the wisdom of simpler times . The money mantras that helped your parents don’t always work with today’s inflation and debt. Even if you don’t actively seek financial advice from your parents these days, you may have absorbed their teachings many years (and years) ago. Here are some of the most common money-related teachings that your parents probably passed on to you that should be treated with a fair amount of skepticism in the financial hell of 2022.

“Buying is always better than renting.”

Call it conventional wisdom, call it the “American dream”, but owning your own home is the ultimate, unexplored goal for many. Unfortunately, buying a home is no longer the perfect investment it once was.

The decision to buy or rent is not the same for everyone . The New York Times has a helpful interactive calculator that takes into account all the factors that go into deciding whether you should rent or buy a home, such as the cost of rent, mortgage rates , where you live, and how long you plan to live there.

If you know that buying a home is an achievable goal for you, here’s what you need to know before buying a home .

“You will always have a car payment.”

It’s not even just from our parents; it seems like an accepted fact of life. But it shouldn’t be. Reversing this advice can be as simple as buying a used car or realizing that after you pay off your current car, you can still drive the same car for a few more years instead of buying a shinier model.

Of course, it helps that this is a terrible time to buy a car . But if you do, it’s important to do your research beforehand and be decisive when it’s time to pull the trigger. Knowing the terms of your loan ahead of time means the dealership can’t trick you into focusing on monthly payments rather than interest rates or total cost of ownership. As we said before , leaving as a negotiating tactic is no longer a smart move – by the time you get back, your car will most likely be sold to someone else – so know before you leave.

“Never use a credit card because you will end up in debt.”

Depending on your parents’ personal experiences with debt, they may have instilled in you a general fear of credit cards. However, as Nerd Wallet says , “using credit cards does not mean going into debt.” Using a credit card is the number one way to improve your credit score, as long as you actually pay off the loan in full at the end of each month. If, as a result of your upbringing, you are worried about credit cards, you can break free by using your credit card to make small regular purchases without accumulating a large balance.

“You must stay at your job for at least two years.”

While the older generation can expect to stay at the same company for decades, Millennials and Generation Z have no such guarantee. This is more career related than pure money advice, but it’s still important to unlearn for the sake of your bank account. The current reality of job jumping is that (1) candidates who constantly change jobs are no longer suspect, and (2) you are not rewarded for your job loyalty. In fact, moving to a new company is usually the fastest way to make significantly more money. Here’s another outdated career advice you should ignore .

“Never talk about money.”

Your parents probably thought that talking about money was taboo. Now the pendulum swings towards transparency. Whether it’s between friends or colleagues , talking about money gives you a better understanding of whether you’re being paid what you deserve. In addition, being more open about money can also help you withstand financial peer pressure from your spending-loving friends. The more we talk about money, the more we can learn about debt, savings, and budgeting.

After all, your parents want the best for you, but you’re navigating a different financial reality than they once were. Your ability to unlearn their approach to money comes down to self-awareness of what is practical and what is impractical these days.

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