Dumb Money Rules Our Parents Taught Us
Money rules. While everyone can be dumb all by themselves, there are times other people contribute to our dumbness. One of those people is our parents.
We love our parents so no hate towards them but let’s be real, there are some really dumb things they have said to us and taught us over the years.
Some of the dumb things were harmless while others were quite detrimental and took us quite a while to unlearn. From relationship rules, general life rules, and cultural rules, our parents knew what was best for us according to their books.
But over the years, these rules can get outdated and not hold any water in present cultures or times. Here are a few dumb money rules that were taught to us by our parents.
1. Don’t Invest Until You Have Finished All Your Debt
Some of our parents taught us how to invest and they made sure to teach us well. They taught us the best places to place our investments in according to the best of their knowledge.
Some people were even lucky enough to go into business with their parents and are currently thriving because of their parents’ smart moves. While investing is great, some of our parents taught us that we should never invest if we are not debt-free.
Have you ever heard of that? I definitely had. You see, most parents of our times thought of debt as a bad thing and thus always encouraged their children to clear any debt they had as soon as possible.
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While this may be ideal it is not practical. The average person in today’s world is surviving with some sort of debt. From credit cards to student loans and mortgages, it is hard to live without one with today’s economy.
Inflation rates have not made it any easier. So waiting until you clear your debt before you invest seems to be quite unrealistic. Some of us might wait for quite a long time.
It might even be better to take a loan for a potential investment. With the right amount of research and forethought of course and also putting into consideration how you will pay back the debt.
This might be a smarter move than just waiting to clear your debt before you invest.
2. Always Pay In Cash
While I understand the premise that this school of thought comes from, it might be quite outdated. Most people who advocate for this are certain that when you have the exact amount of cash that you need, you are less likely to overspend.
Paying in cash also helps you track your expenditure, though in quite an old-fashioned way. These days we have app integrations that track expenditure and online wallets totally hands-free.
There are also apps that help with budgeting and spending restrictions so that you do not need to work so hard to discipline yourself.
And while cards can get a bit tricky with expenditure, you can always separate different cards for different uses. You can also issue instructions to your card issuer so as to limit and control how you utilize your card.
By setting up limits or restricting certain purchases you can make the use of your cards more convenient without going overboard with expenditure.
The benefits of using cards are numerous. From cashback on purchases to getting free mileage on flights, cards have more benefits than using cash.
3. More Degrees Will Guarantee You More Money
Our parents have been infamous for making us value education and making sure we get it. While we appreciate this and owe some of our careers to our degrees, this premise is quite outdated.
Getting a degree in today’s world is not important in helping you land that dream job. We have seen a lot of people who lack degrees but have valuable skills that are needed in the job market.
Recruiters are now seeking skills over papers when they hire and this may mean that people who have less education but more skills could have a higher chance of being hired by companies.
4. Avoid Credit Cards At All Costs
Credit cards are a facility that can be quite tricky to manage but very necessary in life. A lot of people avoid credit cards because they fear getting charged and overspending.
Among those people are our parents. Our parents taught us to avoid credit cards because they believed that you may get into unnecessary debt, get charged high fees, or end up overspending on the money you do not have.
While their reasons are valid, credit cards prove to be more useful than harmful. When used in the right way, credit cards can even get you cash back on certain purchases or other very handy perks such as mileage on your next flight.
We all need to learn how to manage our finances well and credit cards offer the best starting point for this. As long as you stay well within your limit and always pay back your arrears in time, you are good to go with credit cards.
Read more on credit cards here.
5. Real Estate Is The Best Investment
While real estate might be one of the most lucrative investments out there, it certainly is not the best. Well, at least not for everyone. Our parents drilled in us that having the best bet in investment would be to bet on real estate.
Not everyone can afford real estate and there are so many things that make having real estate an inconvenience at one point or another.
For example, if you need to relocate to different continents, you will have to sell your property and this is a daunting task in itself.
The best investment one can make is the best one that they can afford at the time and position they are in life. Do not beat yourself up trying to get property and get into mortgage debt when you cannot afford it.
If other business ventures are what suit you then do them by all means but do not get into a business because someone told you it was lucrative. Do your own extensive research.
6. You Retire When You Are 65
This is a very old-fashioned way of thinking and I am quite glad it is being thrown out with recent events. A lot of millennials and gen z have the thought pattern of wanting to retire early some even as young as 30.
You see limiting ourselves to a number only limits our options instead of broadening them. For instance, some people may feel like 65 is very far away and thus may put away saving practices until later on in life.
Also, we have a lot of senior citizens these days who do not want to retire at 65, they continue working because working gives them a sense of fulfillment.
So you can retire whenever you choose just make sure to prepare yourself well enough for it.
What are some of the dumbest money rules that you have heard about? Let us know in the comment section below.