As a personal written finance, my social media flows are flooded with content of influencers of personal finance – or “finflutenurs” – offering users the best advice to repay the debt, become rich quickly, etc.
Although some of these tips can be useful, I sometimes meet advice that make me make a double grip. And not in the right direction.
Here are some of the worst financial advice that I met on my flows – as well as some tips to avoid bad advice on money on social networks.
Find out more: Check the viral kiting on social networks. Is it a bank fraud?
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There is a good chance that you have encountered advertisements for salary loans on social networks promising rapid cash without credit verification. According to the Better Business Office (BBB), these announcements often target young users who may not understand the risks involved.
Sometimes called fundraising, salary loans are short -term loans, generally for around $ 500 or less, which must be reimbursed in a few weeks. You can opt for a salary loan if you are stuck in a payroll and cook check cycle and you need to cover an emergency expenditure.
The downside: wage loan providers invoice exorbitant costs and high interest rates. According to the Responsible loan centerSalary loan costs can equip an APR up to 662% in certain states.
Although a salary loan may seem to be a rapid solution to a tightening of cash flows, these short -term and high -rate loans lead to a vicious loan circle to stay afloat.
A better option: ask your service providers if they are ready to offer a payment extension or a more flexible reimbursement plan. Credit cards offering uninteresting introductory periods can also provide a short -term solution with a little more flexibility than a salary loan.
For a longer -term solution, prioritize the construction of an emergency fund to cover your expenses at the pinch.
Watch: 3 ways to avoid living the pay check at the payroll check
Rental is a waste of time and money
The home ownership is often presented as one of the best ways to build long -term wealth – and this is the case. However, having a house includes many costs and challenges, and it is not for everyone.
However, some Tiktors say that renting a place where living is mainly throwing money and urging viewers to jump on the property scale as soon as possible.
Although this may be a viable option for some, saving enough money for a house on a house can take time. In June 2024, the median deposit on a house in the United States was $ 67,500, according to the company Redfin.
If you are unable to buy a house, the rental can buy you the time you need to save funds for a deposit and moving fees. It can also give you time to repay the debt and improve your credit scoring in order to guarantee a more favorable interest rate on a house.
Fortunately, there are several ways to save on rental costs while you are preparing to become a owner, such as signing a longer lease, negotiating your rent with your owner or dividing your monthly rent with roommates. And if you are not at all interested in buying a house, it’s ok too.
Find out more: Can you save for a deposit and an emergency fund at the same time?
Credit cards often receive a bad blow to have led to an ingesting and high interest debt. This is certainly the case for some people, but it should not be for you. Credit cards can be a useful tool for building your credit scoring, finance greater purchases and earn precious awards.
The key is to manage your credit card in a responsible and strategic manner. You can set up guarantees to keep credit card expenditure in check, such as defining account balance alerts, maintaining low credit use and only invoice what you can afford to reimburse each month.
Of course, if you know that you have trouble spending too much or that you already have a high interest debt that you work to pay, a credit card may not be the best choice.
Find out more: Strategies to repay the mounting credit card debt
Certain finflueurs on social networks have praised bankruptcy as a means of wiping the slate if you are struggling with increasing debt. Although bankruptcy can help you start again, it also has serious long -term impact for your credit and your finances.
Bankruptcy is a legal process allowing individuals and businesses who cannot pay their debts to request repair from some or all of these debts. It may seem an excellent idea, but it is not a decision that should be taken lightly. Bankruptcy can also lead to a massive drop in your credit scoring, loss of assets, additional costs in the form of lawyers, and more.
If you are obliged and you cannot control your debt, see if there are ways to rework your budget so that you can make additional payments to your sales and eliminate your debt for good. Otherwise, see if your credit card company or your loan supplier is willing to work with you on another payment plan. Options such as consolidation, refinancing or debt regulations can also be viable alternatives with less serious consequences.
Find out more: Silver bases: What is bankruptcy?
For each nugget of wisdom on our social media flows, there is a plethora of bad advice. Before taking financial pointers from anyone on social networks, be sure to do your homework:
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So-called veterinary experts and their references: Do a little to determine if the person who offers you money advice has the history and experience to do so. Are they a certified financial planner or a tax professional? Have they already worked with customers in similar situations? What makes them qualified to give you financial advice?
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Look for shaded disclosure: If an article on social networks promotes a certain financial product, read the small characters to determine if the product is promoted because it is really a good product or because it is a paid advertising.
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Know when to call a pro: If in doubt, talking with a professional debt advisor or a financial advisor can help you get the advice you need to make the most informed decision.
