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4 Smart Money Tips No One Ever Wants to Hear, but Needs to

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Getting high-quality financial advice can be one of the most important steps to take when it comes to paying down debt, saving for a home, planning for retirement, and tackling other financial goals. But, it can also be one of the hardest things to do. 

In 2018, CNBC reported that less than 3% of Americans could pass a basic six-question financial literacy quiz. Receiving financial advice from trained professionals can be a really good idea, but that doesn’t mean everything they have to say is always the easiest to hear. Especially when it contradicts what we want to do or think we know. 

“There’s a part of our brain that is constantly trying to seek pleasure, avoid pain, and take shortcuts,” Misty Lynch, a certified financial planner, tells Insider.

While most Americans decline financial advice, it’s often doing them more harm than good. Some reports show that financial illiteracy cost Americans $415 billion in 2020 alone. 

If you heed no other financial warnings, at least consider these four tips from Lynch — she says they’re common, smart pieces of advice people don’t want to hear, but probably should.  

1. You need a budget

“Budget is the biggest thing. They think it’s going to cut all the fun,” Lynch says. “You need a budget” is maybe the most common and scary piece of financial advice out there because of the bad rap budgeting gets for being restrictive, strict, and difficult to maintain. 

But budgeting is important, Lynch says, if not for managing money, at the very least for illuminating money habits so they can be corrected. “A lot of times, it [spending habits] doesn’t really align with what they say they actually really care about,” Lynch explains, noting the importance of using a budget so you can do and get the things you care about. 

Still, budgeting doesn’t have to be an overly restrictive set of guidelines; more than anything it’s a plan for your money. And planning is usually the best way to get from where you are to where you want to be. 

2. Your parents and grandparents may mean well, but it doesn’t mean they’re right

According to Lynch, most people don’t want to hear any advice that contradicts what they’ve been told by parents, grandparents, or other respected mentors in their personal lives. But, Lynch says, “Parents and grandparents had a totally different existence.” While they probably mean well, this doesn’t mean everything they say makes sense in today’s culture and economy. 

More often than not, Lynch says this usually comes up when talking about debt, investing, and how aggressive you should be with your money. “Usually it’s just figuring out why they believe that and then just poking at it a little bit to see if it’s true or if it’s just an opinion.” 

3. Taking a risk isn’t always a smart move 

On the other hand, Lynch often has clients who want her to affirm some of their riskier financial decisions, even when they don’t really make sense. 

Recently, Lynch had a client ask her if she should quit her job to focus on her side business full-time. “She wanted me to tell her so badly to just do it, but it’s not the right advice,” Lynch says. 

This also often comes up with people looking to get into riskier investments. “They’ll say something like ‘I heard this at work … and I want to play the market,'” she says. “They expect me to reinforce it, but sometimes they might have bills they need to pay off, or they might have some plan at work that they should look at, or maybe a different type of account.”

4. Sometimes the best thing to do is nothing at all

After a move, a breakup, a new job, or any other major life shift, Lynch explains that she’s often advising people to slow down before making any other big changes. “One big change at a time,” she says. “Take some time to actually process it.” 

When people’s lives change, it may feel exciting or uncomfortable, but Lynch notices that both reactions often prompt clients to want to adjust a lot of other aspects of their lives. “We try to make sure the things that they’re doing will work for them, and it’s not just a response to try to feel different or better.”

How to receive advice you don’t want to hear 

Because personal finance is so personal, it’s likely you’ll hear advice you don’t like or agree with at some point. When this happens to Lynch, she spends time writing out all of her thoughts and ideas to get to the root of why she didn’t like it. “Did it trigger something? Did I feel like I didn’t understand what was going on?” she says of questions she’ll ask herself. “Then, I decide what I’m going to do.” 

“If you’re somebody that looks for outside opinions and don’t know if it’s the right advice, treat it like a doctor, go ahead and get another opinion,” Lynch says, particularly if this makes you feel more confident in the choices you’re making. 

But above all, it’s vital that you understand your decision, not that you follow or decline advice blindly, says Lynch. “Until you feel like you understand what you’re actually doing, I would never move forward with something — if you don’t have a clue how it works, if you couldn’t repeat it to somebody else.”

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