Financial Advice From Your Parents to Ignore

Financial Advice From Your Parents to Ignore
Image: michaeljung, Shutterstock

In the time of coronavirus, there is some money advice that no longer applies. Our parents’ generation may have passed down rules of thumb with good intentions — but some of these pearls of wisdom may not fit the challenges of the modern era, so here are some common rules you may want to break.

Pay off debt as fast as you can

With the pandemic going strong, many Americans are still reeling from fewer hours and unemployment. Whether you’re struggling to pay the rent, cover student loans, or put food on the table, you should prioritise your family’s immediate needs. Once your income is stable again and you can afford the basics, you may return to your previous debt repayment plans.

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The stock market is like gambling

After some dips in February and March, experts were quick to cite the end of the 11-year bull market, before the stock market recovered in record time. While volatility may frighten those closer to retirement, there are plenty of reasons to stay optimistic — particularly if you have a long investing timeline ahead.

Although the media fixates on stock market swings, history shows an upward trajectory. Over the past hundred years, there have been some big drops — but the numbers still move upward. If you steer clear of investing, you could miss out on many years of compounded growth.

Renting is throwing money away

As mortgage rates continue to plummet, you may be feeling more pressure than ever to buy into The American Dream. But the truth is, homeownership could be the wrong move, particularly if you have to stretch your family’s budget to make it happen. Taking on a higher payment, even if you qualify, could be risky in an unsteady economy.

Despite what anyone says, your primary home is not an investment. As the median home prices hover near record highs, there are no guarantees a home value will continue going up. And depending on the age of your home, you may spend a lot more than you expect on repairs and maintenance.

There are, of course, plenty of reasons to buy a home — like putting down roots, having more control over your living space, and more. But let’s ditch the old adage that renting is throwing money away.

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