When Bad Money Advice Seems Reasonable

Question of the day: What money advice have you heard at some point that seemed to make total sense, and maybe even felt like an aha moment for you, but then you later realized it wasn’t such great advice after all? Share your answers in the comments! Today we’re exploring why some bad money advice seems reasonable — and the philosophy behind it all.

We’ve been reflecting a lot lately about the factors that made Mr. ONL and I the people we are today, and of course money is a huge part of that. We grew up with similarly middle class upbringings, though Mr. ONL’s family seemed to embrace “enough” better than mine did. We each learned about functional money stuff like balancing a checkbook in high school. And we each took on some credit card debt before we decided we didn’t want to live under that weight. All important lessons.

But another important lesson that we all get — good or bad — is the osmosis kind that comes from just observing how other people deal with money, especially people we admire or are close to. And while this kind of information may not be of the pick-this-index-fund or don’t-hire-a-financial-planner-on-commission variety, it still impacts us in a big way. I’m thinking specifically about how some of my ideas about what money is for were formed.

For us at least, we were definitely influenced by the people around us once we started working. We grew up in families without much extravagance, but suddenly at work we were surrounded by people with nannies and $60,000 cars and second homes. Not filthy rich or anything, but definitely people with means. And, as we’d each learn, people who see money differently than we do now.

The Philosophical Question: What Is Money For?

Though we didn’t realize it at the time, what we were learning from our bosses and coworkers was their answer to what I now think is actually an entirely philosophical question: What is money for?

We may not have asked them directly, but their actions told us how they would have answered. They would have said that money is for making life easier. That’s a far cry from how we’d now answer that question (money is for buying freedom), but their answer also makes sense in its own way. Like, a lot of sense, especially if you’re a young recent college grad who hasn’t yet gotten the hang of adulting, and you see a future for yourself in a high-stress career path. You see other people in that path who seem to have figured it out, and they use their money to make the high-stress part of it sustainable: by paying others to do things for them, by paying to relax, by paying to buy more time to work.

If you agree with the philosophy behind it (money makes life easier), then spending money on that stuff makes sense.

Knowing That It’s a Philosophical Question In the First Place

The piece that’s harder is knowing that, in showing you how they use money, people are giving you the answer to what they think money is for. Maybe they think money is for buying experiences, or for buying the most toys, or for filling an emotional void, or for quelling the fear of financial insecurity.

In our case we didn’t realize that that question was at play at all until much later, in hindsight. Instead, we saw how people spent money without recognizing the philosophy underlying those choices, and we just thought that’s how smart people spend their money, so that they can keep doing those high-stress jobs and in turn earn more money. So we started spending our money that way, too — outsourcing some of our household tasks and taking lots of vacations to “relax.” (Thank goodness we never got into expensive cars!)

How the Bad Advice Comes to Seem Reasonable

I always crack up at the fictitious story of how Chevrolet tried to sell the Chevy Nova in Spanish-speaking countries, with disastrous results. Why? Because “nova” (“no va”) means “no go” in Spanish. As it turns out, this didn’t actually happen (thanks, Snopes), but I love the story all the same. And I’ll use it as a metaphor here.

If two people are saying the same two syllables — let’s stick with nova — the meaning is entirely dependent on which language you’re speaking. If you’re speaking English and someone says “nova,” and especially if you’re a space nerd like me, you’re thinking, “Ooh, get me some Hubble photos stat!” But if you’re speaking Spanish, the same syllables mean, “Hey gringa, stop assuming that we don’t know the difference between ‘no va’ and ‘nova.'” Or something like that. Point being: the meaning is different depending on the context. And it’s the same for interpreting money advice. If you don’t know what language someone is speaking — their philosophy on what money is for — then you don’t actually know whether their advice or what they’re showing you by their example is good or bad.

Some of the Most Convincing Bad Advice We’ve Gotten

I want to share some of the actual nuggets of advice that we got in our early career years, especially the ones that stuck with us. But before doing that, a big caveat: Most of this advice is only bad to us because our underlying philosophy is different from that of a lot of the people we work with and for. But there’s nothing wrong with the “money is for making life easier” philosophy, and nothing wrong with spending according to it. The only thing that’s truly bad is not knowing your own philosophy or spending in a way that’s at odds with your own answer or values. We will never try to argue that no one should buy stuff or spend on extravagant things — if you can afford it, and it fits with your money philosophy, then more power to you.

But since I’m assuming that most people reading here at least partially agree with our philosophy that money buys freedom, here’s that “bad” advice:

It’s okay to throw money at problems. Meaning: It’s often easier to just pay for things than to spend time trying to resolve issues, especially in personal life. I understand this, and have for sure learned that sometimes there’s no resolution besides paying for something. But now we’d say we’re at least going to try to resolve something without shelling out!

To relax on vacation, you need to feel pampered. Meaning: Treat yoself. Spa treatments, room service, five-star hotels. We for sure see the appeal of this one! Though with some exceptions (okay, some rather large exceptions) we’ve always enjoyed the more adventurous, DIY vacations. But we also love the spa.

If something takes a lot of your time, you’re better off paying someone else to do it for you. Meaning: Outsource as much as you can so you can focus on the important stuff. Following this advice led us to use a fluff-and-fold service for our laundry for years. And, to be honest, It. Was. Awesome. But also a dumb use of money, especially because we now have laundry in the house and can run the machines while working and fold clothes while watching TV.

The little spending doesn’t matter. Meaning: It’s okay to buy your lunch at work every day, or to buy that daily latte, if it helps you be more productive. Mr. ONL definitely once had a daily Starbucks habit (though he’d say that he drank drip coffee, which is much cheaper than a latte), though I always brought my own lunch to work… but I also didn’t complain if someone else wanted to buy me lunch! ;-)

Chime In!

What’s the most convincing bad money advice you’ve ever heard? Or the advice that was good until you realized it didn’t match your own financial philosophy? Any major zingers in there? We’re dying to know!