- Growing up, the No. 1 money rule I heard was “save, save, save” — but I never learned to invest.
- I was also told student loans are bad, even though they get you access to an education, something I value highly.
- Other bad advice I’ve heard: don’t talk about money, and slash “non-essential” spending.
My generation — millennials — has an interesting relationship with money. We came of age during the Great
, when all the “safe” financial institutions were on the verge of collapse and conventional financial advice was being questioned. In the years since, financial literacy movements popped up that aimed to empower weary folks with accessible financial advice.
Since re-educating myself on money using resources from the FIRE movement (Financial Independence/Retire Early) and elsewhere, I’ve realized that much of the money advice I learned in my younger years was dated and, in some cases, downright harmful. Here is all the bad money advice I learned in my younger years that I refuse to pass down.
1. Save, save, save
Since I can remember, most financial advice I received emphasized saving over investing. Most of that came from my immigrant family, which imparted the importance of putting money aside for emergencies, buying a home, purchasing a used car in cash, etc. The financial education I received at my public school wasn’t much better. As long as I can recall, we were taught to save rather than invest.
So I put my hard-earned cash into high-yield savings accounts, earning a meager APY. This led to a lot of missed opportunities for growth. Investing didn’t even cross my mind. Part of that was because I graduated from college during the Great Recession. It was scary to put money into the stock market after millions of people lost their retirement nest eggs betting on it.
I eventually caught up to the importance of investing through various online financial communities and began doing so immediately. I just wish I’d started earlier.
2. Have at least 6 months of expenses saved up before you quit your job
Having at least six months of expenses saved up sounds like solid advice. In my case, I’ve never followed it when leaving a job and it’s worked out every time. It’s terrible advice because it can hold you back from leaving a stressful job and prevent you from earning a higher salary as a freelancer or in another position. This advice is also no longer relevant, with the gig economy creating income opportunities beyond traditional jobs.
When I left my “dream” job with a six-figure salary last year, countless people told me I was making a mistake. That I should save up more and have another job lined up before leaving. It’s what kept me in that role months after I was ready to go. But I soon realized that I was limiting my income potential by staying in that job. As soon as I left, I not only recouped my monthly income with freelance work (often exceeding it), but I worked fewer hours and had more freedom.
3. Cut back on ‘non-essential’ spending
For years, the $5 coffee has been demonized as the root of every millennial’s money woes. In my 20s, I started cutting out non-essential purchases like my daily coffee habit and dining out. The result? I was miserable.
While these expenses are not necessary, they made my days working multiple jobs more bearable. Treating myself to a frozen iced coffee at the end of a long day gave me something to look forward to and helped me avoid burnout. You can’t just work to live — sometimes, you have to enjoy the fruits of your labor.
This was when I got some contrarian advice from a financial expert: “Don’t spend less; earn more.” It sounds like “Let them eat cake,” but it’s excellent advice. If your financial soundness depends on depriving yourself of a $5 daily purchase, then it’s time to earn more money.
Instead of cutting back on spending that improves your quality of life, try finding avenues to generate more income. I realize that sounds easier said than done. But with today’s gig economy and the myriad online side hustles available, it’s not entirely out of the question.
4. Student loans are bad
The student loan crisis is real and making a lot of people’s lives difficult. There’s no doubt about that. But too often, the narrative around student loans veers towards “all student loans are bad” and, by extension, “college is a waste of money.”
For me, college wasn’t just about acquiring a skill set. It was about learning to think critically, being disciplined, and bettering myself. I come from a country, Afghanistan, where access to education is limited, especially for girls. Education has always been an immense privilege to me. I knew without a doubt that education was why my family was better off than others in my homeland. The rhetoric around the usefulness of a college degree always reeked of privilege to me, because the fact that education was accessible at all (albeit at a steep cost) was short of miraculous.
Yes, I accrued $50,000 in student loans. In turn, I got an invalid education that benefits me 13 years later, long after my debt has been paid off. Even at my lowest-paying job, I earned more than I would have if I hadn’t graduated from college.
I can’t tell you how often I’ve gone in for a job interview and had the interviewer tell me they were impressed with my educational background. It often got me in the door. So I think this popular narrative that education is pointless and loans are bad is wrong. I benefited from it then and I continue to benefit from it now.
Building a side hustle into a business has been great. But if things go downhill tomorrow and I have to return to the workforce, my degree will provide a level of security and a competitive advantage like nothing else. Higher education is not a waste. Taking out student loans in moderation for a good education can pay off if you have a plan for repaying them.
5. Don’t talk about money
We’ve heard this advice time and again: It’s not polite to talk about money. We’ve heard it from our parents, employers, and everyone in between. But this advice is actually harmful to our earning potential. I spent years at a job before realizing that I was making significantly less than my peers. A few years ago, I was interviewing for a job and received an offer that I thought was fair. After speaking with a friend who had taken the same position at a different company, I realized the offer was well under market value and I was short-selling myself.
I’d done my research by checking Glassdoor, but those salary estimates aren’t always accurate nor do they account for niche expertise. By speaking with my friend and learning what she was earning, I was able to negotiate a salary that was almost $40,000 higher than the initial offer, plus a $10,000 sign-on bonus.
Conversations about money are essential, whether with your friends or colleagues (especially your colleagues). Talk to them, not just about how much they’re earning but how they’re managing it. Over the years, I’ve learned about investment opportunities from speaking with complete strangers. And I’ve seen how large a gap exists between men’s and women’s salaries when we follow this advice about not discussing money.
6. Having multiple credit cards is bad
Finally, my favorite piece of advice to ignore: Having multiple credit cards is bad. That couldn’t be further from the truth. Over the last decade, travel hacking has opened doors to incredible opportunities through credit card sign-up bonuses. I’ve taken my family on trips to Europe and Asia, booked an impromptu getaway in the Maldives, and taken an all-inclusive vacation in Mexico — all using points and miles.
I’ve not only saved thousands of dollars on travel, but I’ve also been able to upgrade my experience and book trips that would otherwise be completely out of reach. It wouldn’t have been possible without credit card sign-up bonuses, which have helped me earn millions of miles over a decade.
At the moment, I have over a dozen cards in my wallet and I know what you’re thinking: Your
must be tanking. Despite closing a few accounts over the years, my credit score is currently at 760. Having multiple credit cards can improve your credit score, so long as you use them responsibly. That means keeping a utilization rate under 30%, paying your balance off every month, and avoiding late payments.