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Financial Advice That This Personal Finance Writer Ignores

by Emily Guy Birken

I admit it. I’m a hypocrite. The first time I wrote a post on saving money on college expenses, I listed several savings options that I not only didn’t follow myself, but also that I would rather not see my son follow when he gets to college. While I can recognize the importance of frugality in general, there are some specific areas where I am perfectly willing to pay dearly in return for an experience. College is probably my most expensive example of frugal failure (as my still-high student loan debt can attest), but it’s not my only one. Here are some of the pieces of advice that I have given—but I don’t necessarily follow myself:

1. Do It Yourself. When it comes to basic home improvement and maintenance work, as well as car maintenance, it’s clear that doing it yourself (within your abilities) is going to save you big. The problem is that sometimes I just don’t wanna. Case in point, each fall my husband and I have a battle over leaf raking. I recognize that a couple of afternoons of raking, gathering and pitching our leaves is a small price to pay for being a homeowner, but I still troll for local teens who are willing to do the job.

Call me hypocritical, but there are some things that I am just not willing to put the time into. I’d rather spend my money.

2. Have At Least $30,000 Put Away for Retirement by Age 30. At two years past my three-decade mark, I still haven’t reached this goal. While the specific numbers that you hope to have put away for retirement will change from individual to individual, I have always felt that having 30K in retirement savings for that big birthday is a relatively reachable goal. And yet, I ignored my retirement for most of my twenties, and continue to only be lukewarm about those savings goals, whereas I’m constantly checking how my son’s college savings account is faring.

I know I’m falling down on the job here, but retirement is an amorphous and far-off goal—while my son’s education is only 17 years away and I can have fun thinking about where he could go with the money we’re putting away for him.

My plan is to make retirement more concrete for myself. For years, my retirement accounts were not easily accessible online (unlike all the rest of my money information). I’m meeting with a financial advisor to get things streamlined so I can get just as excited about checking my retirement status on a weekly basis as I do about my savings and checking accounts. I know what motivates me financially, and I simply haven’t been doing it with my IRAs and 403b.

3. Spend Less Than You Earn. While in effect I do this, I must admit that my checking account balance is for all intents and purposes $0 at the end of each month. Much of my monthly “spending” is putting my earnings into various savings accounts, including our emergency fund, but I don’t build much of a cushion into my checking account. I do this because I want to maximize every dollar, rather than let it languish in a bank account that earns me no or minimal interest.

I do this because I’m a money nerd and I balance my checkbook once a day or so. (Really! I actually enjoy it). However, it does mean I sometimes goof and have to borrow money from myself, either by using a credit card for a purchase or by moving money out of one of those carefully built-up savings accounts. That being said, I have never overdrawn my account—I’ve just had to redirect money from its intended use.

At various points in time since I’ve become a card-carrying grown up, I have tried to not “use” all of my money every month, and I always come back to this strategy. It works for me, even though I know I end up spending more than I’m earning in interest once a twice a year when I make a mathematical error. I prefer to feel like I’m using my money well, and I’m willing to pay for the lack of a cushion on the rare occasions when I need one.

For the most part, I try make my money decisions with self-awareness and recognition of why I am ignoring the prevailing wisdom. Even the experts will agree that not all advice will work for all individuals.

What personal finance advice do you ignore?


Published or updated October 17, 2011.
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{ 8 comments… read them below or add one }

1 K.C.

Emily, try changing the way you think about retirement savings. My wife and I didn’t think in terms of retirement savings, although that was the ultimate goal, instead, we pictured financial independence. Every dollar added to our long term savings gave us just that much more financial independence. Because we sought financial independence, we didn’t save for retirement in the traditional way, exclusively through tax deferred accounts. We did put some long term savings into tax deferred accounts, but most of it went into after tax savings. That way we had the money available for use before retirement. This allowed me to quit my job and start a business at age 40. It allowed my wife to leave her full-time job for a number of years to care for an ailing parent. It gave us the option to retire early at age 56.

Long term savings is useful long before retirement. It gives you choices you wouldn’t otherwise have. Choice is the essence of freedom. More choice, more freedom. Think of your retirement savings in this way and you will be motivated to contribute a greater portion of your income to long term savings.

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2 Ryan

Emily, I agree with K.C. on this one. My wife and I prioritize retirement saving over our daughter’s education because we want to make sure we are taken care of financially. You only get once chance at saving for retirement – you can’t borrow your way out of it, or earn “retirement scholarships” to ease the burden.

College is a different story. There are many creative ways to pay for school, including savings, scholarships, grants, work study, tuition assistance from employers, and more. In some cases, college isn’t the child’s first choice. There are many great career options which don’t require college.

My wife and I prescribe to the knowledge that funding our retirement isn’t an option – it is solely our responsibility and we only have one shot at it. But funding our daughter’s college fund is an option (which we try to do). But there are more variables and options for paying for college, so there is more flexibility.

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3 Emily Guy Birken

@KC and @Ryan, you both are absolutely right. I know where my ambivalence comes from–the fact that I can’t imagine retirement yet and the fact that retirement savings has always felt somewhat out of my control (because I had to wait for paper statements that were generally pretty baffling, for example). I’m working on changing my attitude in two ways–my husband and I talk about our plans for the future so that it seems more real for me, and I am working with a financial adviser to streamline my retirement accounts so that I can keep tabs on them like I do with the rest of my money.

I wanted to write this article because I know a lot of people don’t do what they know they should. Sometimes you make a conscious decision, like I have done with DIY stuff and how I handle my checking account. But sometimes you have a major mental stumbling block that you don’t even think about. I wanted to share what my personal foibles were and how I plan to deal with it.

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4 Ryan

I know what you mean, Emily. I’ve have the same issues sometimes with topics which I don’t understand or have interest in. I won’t claim to be perfect either!

It makes for a great discussion to share problem areas with others – sometimes that helps us get the motivation we need to make changes.

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5 Krantcents

Budgeting is the PF mantra and I use something I find more effective. I review my bills and look for variances as I pay them. I am performing an analysis each month. I can get away with this because of my many years budgeting and business experience.

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6 Brad

the funny thing is you can imagine college for your infant, which is at least 17 years away, but you can’t imagine retirement.
in 17 years, if you are 32 now, you will be 49, which is just a few years shy of when some people who saved for retirement actually do quit working….i know. i am one of them.
ill just join the choir and advise paying yourself first, i.e., 401k or roth ira, before paying that college fund. higher education is important, but your kid might decide to become a plumber instead, for all you know. and as we realize in today’s high-unemployment economy, being one of the herd of millions with a college diploma guarantees little to nothing in the marketplace of tomorrow. the value of education is not all about finding a job, true. but your kid will find a way to pay tuition, probably just like you did since you are still paying those college loans.

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7 Kevin@RothIRA

On the retirement savings goal, maybe you can use the fact that you didn’t reach your goal as motivation to increase your efforts later. Though it definately makes a difference to save as much as possible as early as you can, life can get in the way because you’re doing things other than retirement planning that are just more important at the time.

As you get older the imperative to save will grow, then you can build on whatever you did save rather than having to start from scratch. Half a retirement plan is better than none, especially in the early years!

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8 Cherleen @ My Personal Finance Journey

I understand where you are coming from when you talk about the willingness to do a house a job than paying some teenagers to do it for you. Instead of thinking that I am spending my money and leaving less for my savings, I would rather say that I am helping the teenagers earn a modest amount and teach them the value of giving importance to every centavo you earn.

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