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What's the worst PF advice you ever got?

Forgo retirement savings. Skip filing your taxes. Cheat a nonprofit. Are these 'advisers' for real?

By Donna_Freedman Nov 5, 2010 11:13AM

"Don't pay off your mortgage early -- you'll lose your tax deduction."

"Get married to save money."

"Don't add to your 401k because the stock market is down."

"Buy a top-of-the-line car -- it's an investment!"

"Don't worry about saving for retirement. The government will take care of you."

All these are actual examples of advice given to readers of the Smart Spending message board. A thread called "Silliest advice to save money you've heard" has collected some real doozies: At least two on the thread are illegal, others unethical and some are just dumb.

"MollyMouser" says that a friend told her to dump Internet and pirate a Wi-Fi signal instead. When she jokingly asked whether it would also be OK to steal the neighbor's cable, the friend replied, "Ooohhh, can you do that without getting caught?"

 

(As if getting caught is the only issue here.)


Board regular "Pepperdoo" contributed a scary tip that she fortunately did not take: "Signing up for a 'guaranteed credit card' with a 39.99% interest rate, with a yearly fee of $250, plus a $49.99 second signer fee, plus a $29.99 startup fee, plus a $19.99 second card fee, all for a $1,000 credit limit."

(Well, it could be worse. My colleague, Karen Datko, recently wrote about "The credit card with a 59.9% interest rate.")

A friend chided "973beachbum" for paying $1.99 for a 32-load bottle of laundry detergent. "She said I could make it myself and cut my cost down by 2 cents a load," the reader writes. "I do a max of seven loads a week, so where should I plan to spend my extra (29) cents?"

(I know! You could use it toward the $250 annual fee for that credit card Pepperdoo didn't want!)

A reader named "Eli16" contributed three real pips:
  • "I know someone who pays a welfare (recipient) 60 cents on the dollar to use their welfare debit card every month. Illegal."
  • "I know someone who gets the SPCA to deliver cat food to their home once a month by telling them they are home-bound and poor (they are neither). Immoral."
  • "I know someone who only files for their tax return once every three years because they get a HUGE check back that way. Stupid."
"I think I need to meet new people," Eli concluded.

(Good idea.)

And what would a save-money thread be without at least one TP tip? "Dreamy1" was told to use only one square of toilet paper per, um, sitting, "or if it's two-ply, separate it."

(At least they didn’t suggest she use both sides of it.)

How about it, readers:
What's the worst piece of financial advice anyone ever gave you? Did you follow it, and how badly did it impact the bottom line? Or did you dodge that particular bullet?

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2Comments
Nov 8, 2010 10:13AM
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Worst advice, lump all car loans, credit cards and appliances into a home refinance so you have just one lower monthly payment.

Now you can pay for that microwave, car, vacation on the credit card for 30 years. That $150 microwave will now cost $800 over the 30 years, the car will cost $30,000 over 30 years and that vacation you put on the credit card will cost $15,000. But you will have a lower monthly payment. Maybe that microwave will actually last 30 years, but I doubt it.
Nov 5, 2010 1:54PM
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I was a routine recipiant of the "pay the minimum payment to build you credit rating" advice.  Took years before I realized how much that cost me in interest.

 

And yeah, much like the wifi lady, I'm frequantly told creative uses for bitorrent as a way to save cash through theft.

 

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