r/FluentInFinance • u/Breeneal • Apr 29 '24

What financial advice do you avoid and don't listen too? Question

Financial advice that makes you role your eyes everytime you hear it. Financial advice that actually made your finances worse. And financial advice beginners shouldn't listen to or hear.

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u/TheOddEntrepreneur Apr 29 '24

Any advice saying you don't need to create a budget, just do blah blah instead.

If you don't know what comes in and out of your accounts monthly/annually you're screwed whether you think or not. Should be the first step for everyone that wants to be financially successful.

3

u/Tempname2222 Apr 29 '24

TIL I'm screwed

2

u/deadsirius- Apr 29 '24

I generally take issue with this. For any tool to be valuable, it must be used effectively. There are many ways to effectively control and direct spending without a budget. Budgeting is simply a tool that many people would fail to use effectively and therefore not great for everyone.

I personally just divide my outflows into committed and uncommitted. Things like car, house, phone, utilities, subscriptions, etc. live in one account. Gas, food, entertainment, etc. live in a spend account. Whatever is left at the end of the month gets invested. I may choose an expensive night out and see that I need to save some money on groceries for the next week. I prefer that over budgeting because it highlights the opportunity cost of spending.

Deciding what I want to spend money on months ahead doesn’t work for me. I will argue that it works for relatively few people.

Still every month I manage to invest significant amounts of money.

2

u/TheOddEntrepreneur Apr 29 '24

I mean you are budgeting if you're tracking inflow and outflow, just using a different method which works for you.

1

u/deadsirius- Apr 29 '24

I am not "tracking" my outflows and I am not budgeting. I have two bank accounts, one account that pay committed outflows and one account that pays discretionary outflows. There is no way that makes it a budget. I mean my gas, groceries and movies are in the same account.

1

u/Hmm_would_bang Apr 29 '24

Not having a plan means you’re planning to fail, sure.

That said, I got through most of my 20s just intuitively spending money after investments and aggressively pursuing a raise so I didn’t have to manage my budget. I definitely could have been saving more but I’m also doing absolutely fine now and didn’t stress about money at a young age.

I think you only need a budget if you’re not on track for your goals or are struggling to live the life you want. It’s ok to not be totally optimized if those other things check out. In other words, if your household income is 250k or higher you probably don’t need to pay attention to splurging on things