More Financial Advice That Annoys the Heck Out of Me - Live Like a Mensch
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Live Like a Mensch

More Financial Advice That Annoys the Heck Out of Me


Several months ago, I wrote about frugal tips that annoy the heck out of me. Apparently, I'm not the only one who gets irritated with stupid advice, as I had many many people read and comment on that post.

I thought I'd follow up with more financial advice and frugal tips that make very little sense and what I'd rather see in their place:

1. Coulda Shoulda Woulda Advice. I recently read this quick blog post on Bankrate.com detailing 10 different common retirement derailers, from low interest rates and market declines to supporting adult children and grandchildren and making bad investments. I don't want to pick on Bankrate here, since I generally love their information, but the post simply reported what those derailers are, as determined by an Ameriprise Financial study, and then reported what those who have been derailed wished that they had done differently.

And that's where I get annoyed.

I get that this article will probably be read by those individuals (like myself) who still have the time to avoid the derailing and act in the way that those polled wished they had. But that's hardly helpful for those poor schmoes out there who saw their nest egg lose $117,000 in value and have no idea what to do about it. Yes, hindsight may be 20/20, but for heaven's sake, what now?

I want to make it clear that I have ALWAYS hated this kind of "advice." As a student, when I would be struggling to finish a project the night before it was due and wishing I had a time machine, hearing from a well-meaning individual the words "well, you should have started earlier" could be enough to send me into an apoplectic rage. (I might even pull out the big guns on the "advice-giver" by lifting a single eyebrow in a way that could stop a charging rhinoceros in its tracks--a trick that I used to great effect as a teacher). Frankly, if you don't have anything more useful to say than "boy, were you stupid back in the past in a way that affects you now," then stay out of it. Really.

What I'd Prefer to See: Specific advice geared towards various age groups on how to deal with these sorts of bad choices. Yes, it's nice to know what those who are in a bind wished they had done differently, but without an action plan with specific advice, just telling me that people who are facing a major retirement shortfall wished they started saving earlier and wished they'd worked harder to understand investments is tantamount to saying "Yeah, just don't be stupid." It's not that helpful. Tell me ways to save more now and resources for gaining better understanding of investments.

And for those who have already "been stupid," for the love of all that is beautiful, please give some advice. Telling them "coulda shoulda woulda" just leaves them hanging AND beating themselves up for something that it is impossible to change.

2. Move to a cheaper area of the country. The Mensch family is living proof that living someplace inexpensive can make an enormous difference in your life. We moved from Columbus, Ohio, which was not an extravagant city to live in the first place, to Lafayette, IN, where prices seem to have been stuck in the 1980s. The reason for that difference in cost of living is simple--unlike New York, Chicago, DC, or even Columbus, not many people choose to relocate to Lafayette. (And in some cases, the people who are born here get out of town as quickly as possible.)

I like it here very much. It's a great place to raise LO and Thing 2, but I can tell you that it would not have been my first, second, or 17th choice in places settle down. I'm here because of J's job, and it's a lucky coincidence that we live in an inexpensive small town in an inexpensive area of the country. It allows me to work from home at a career I love and have the flexibility to be LO's (and eventually Thing 2's) primary caregiver. Things just aligned that way, and I'm very grateful for it.

But often, you will see throwaway advice about moving to a cheaper area of the country--as if it's that easy. This advice doesn't take into account your family and social support structure, your (and your spouse's) job prospects, your hobbies and preferences, the cost of moving, etc. It looks at the choice of where to live as a simple financial transaction, when it is so much more complicated than that.

There's nothing revolutionary about advising people to move to a place that's less expensive. Yes, we're aware that there are places that cost less to live. Unless the frugal advice-giver can also explain how to uproot your entire life, including living within walking distance of your elementary school librarian and being able to visit your Grandpa in the nursing home on a weekly basis, this advice is a non-starter.

What I'd Prefer to See: Tips for making your money go farther in expensive areas of the country.  Granted, there are plenty of articles out there that offer tips on couponing, dollar stretching (ahem), and otherwise making do with less money, but providing this advice instead of simply tossing off the "move someplace cheaper!" line would help keep people from completely ignoring the advice altogether.

3. Time is Money. I remember three years ago, watching "America's Cheapest" (and most ironically named) family, the Economides, on The Today Show, talking about their new (at the time) book. This family is apparently able to feed a family of seven in Phoenix, Arizona on $350 a month. They do this by cutting coupons, scouring sales, double checking unit prices, and buying nearly expired meat. When Matt Lauer said that all that work sounds exhausting, Mrs. America's Cheapest Family responded that time is money. Anyone not spending that kind of time on feeding their family was going to be spending more money than the Economides.

Yes, I suppose that's true. And I certainly think it's a worthy goal to spend less on food and necessities and to minimize waste.




Time is not just money. Time is also your life. And time is the only commodity that you can NEVER get more of, while it's always possible to earn more money. If you're devoting hours upon hours to your quest for reducing expenses, I certainly hope that you're getting more from it than just the cost savings. Because if you're trading your time for money in such a way and you're getting nothing else out of it, it might make more sense to take on more work or get an additional job.

Clearly, the Economides enjoy living this lifestyle. Money saving is a kind of game to them, and that's great. But there are plenty of frugal individuals (and I am one of them) who would rather spend the extra money on groceries in order to have more time to play with my kid and read and work, etc, etc.

What I'd Prefer to See: Advice on picking your battles.

Money saving tips are not all created equal. For me, cutting coupons and cherry-picking sales at grocery stores is not worth the time. Before kids, when taking seven hours to do all my grocery shopping was not a big deal, it was worth it, but only because I got a little kick out of the savings. For someone who lives in an area with a higher cost of living, it may still make sense to do all that work to save money, even if you don't enjoy it. But forcing yourself through that work when you don't particularly want to spare the time, and you do not enjoy the game of it, is a good way to wonder why you're wasting a precious commodity that you could be savoring.

There are other ways to save money and stretch a budget that might not be as onerous. When giving advice on how to save money, I'd love to see multiple tips--along the lines of, "if you've got the time, try grocery shopping like the Economides. If you don't, start doing all of your shopping at lower-cost stores like Aldi. Here are great recipes that cost little to make. Try buying meat in bulk, etc."

We need to remember that saving money shouldn't be the only thing you're looking to do when you live frugally. You should be looking to live the life you want, not the cheapest life you can get away with.

Any other annoying tips that I've missed? What else do you wish people would either stop advising or at least clarify?



frugal_fun said:

1. Yep, "start to save earlier" is not sound advice when someone is 50 and hasn't saved. It's really the "I have no idea what I'd do your shoes" comment.

2. I'm torn. You're right, this should not be "throw away" advise. There are many considerations that go into moving, economics being only one. There's no point to living in a cheap house in Indiana if you truly hate it.

On the other hand, we did end up moving to a cheaper part of the country and I feel we should have taken the advise much earlier. It cost us quite a bit to "hang on" as long as we did. Those from large coastal metro areas, especially, can sometimes get into a bad habit of viewing the lifestyle in other places as being just one step up from living in a shack.

To me, not being able to find your favorite bagel/coffee as a reason to hang onto an unaffordable lifestyle in NYC is as foolish as moving to some place where you don't have friends/don't like the culture because it's super cheap (and/or warm.)

There *are* some very nice - wonderful places in fact that are affordable to live in, even if it's not your hometown or NYC or LA.

3. Totally agree. Also, unfortunately, the families that make good TV make a terrible picture of what frugal living is about. I don't want to take all the time that would be required to get our bill down to $350 a month (I'm not sure we'd end up with good nutrition anyway.) And that's the whole point of frugal living - to spend time and money in ways that are important to you.  I haven't "won" if I'm not working "for the man" but spend 20 hours a week chasing down every offer corporate America decides to throw my way. I suspect most people here would make terrible TV. ;)

June 13, 2013 3:23 PM

frugal_fun said:

But now that you mention it, I did just read a "frugal" article that annoyed the heck out of me. :)  The issue has mostly do with full disclosure. Here's the link: homes.yahoo.com/.../paid-off-mortgage-less-5-years-230600500.html

The issue is that the article spends all this time with how they concentrated on their "extra" funds on pay down, going to thrift stores etc, and it was all done on an "average" income with 2 kids.

And read the through the article thought there was just no way we could do that. So just what kind of frugal people were we anyway? We were clearly Frugal Scum. (Trademark)

In reading through the comments, though, people had done some "back of the envelope" calculations and posted them. It came to light this "average" family must have had an income that exceeded $100K a year. Granted, they both worked to get there, but they were able to come up with $2-$3k per month free cash to throw at the mortgage  to pay it off in 5 years.

So the "magic" wasn't the thrift stores, putting savings on hold etc, it was living well below their means in a low cost of living area with 2 professional level incomes. But the article spent too much time on the trivial like every family could achieve this if they just tried real hard.

That's frustrating to me on two levels. First, it over emphasizes the role of certain actions. If you have a low income, thrift store shopping will not generate enough free cash to pay off debt or build wealth. (Although it may stop debt accumulation and that's worth it alone.)

Second, it hid the "real" frugal strategy, which you blogged about earlier, is simply choosing an acceptable lifestyle somewhere below your means. That's what they really did an awesome job at. It's too bad the author didn't choose to focus on that because I think that message is more "achievable" for most people.

June 13, 2013 3:39 PM

haverwench said:

"I suspect most people here would make terrible TV. ;)"

Apparently I would, because I was actually contacted by a producer from the TLC show "Extreme Cheapskates" when it was just starting up. Apparently she'd read some of my posts on the Dollar Stretcher forums and thought I might make a good candidate for the show. After I e-mailed back to tell her about what sorts of things we actually do, and don't do, to save money, I never heard from her again. Guess we weren't "extreme" enough for her taste.

However, even well-known tightwads like Amy Dacyczyn (all hail the Frugal Zealot!) have run across this problem. She said that every time she did an interview for a newspaper, they'd send her upstairs to hang laundry on her attic clothesline, because it was the one thing that would make a good photo. It was no use pointing out to them that most of their money-saving strategies involved what she called "passive tightwaddery" (i.e., not spending money on unnecessary things); showing somebody *not* doing things makes a very boring picture. They wanted to see "active tightwaddery"—hanging laundry, patching clothes, baking bread—even though these activities give a much smaller financial return for the amount of time they require.

Frugal_fun, I like the phrase "Frugal Scum." I think we should all start using it in our Dollar Stretcher conversations. "Yesterday I was at Starbucks (I know, I'm Frugal Scum) and I noticed...."

June 13, 2013 4:53 PM

haverwench said:

Regarding the article on paying your mortgage early: I read it, and it seemed to me that the article was mostly about "choosing an acceptable lifestyle somewhere below your means." For them, that meant driving older cars, finding ways to lower bills, and yes, shopping at thrift stores. It didn't seem to me that it was trying at all to claim that "every family could achieve this"; they were just saying what had worked for them.

June 13, 2013 5:16 PM

frugal_fun said:

@Haverwench -

The tone of article was definitely written in a "this is what worked for us" style. You're right in that there was no direct claims to this could work for everyone.

On the flip side though, the 2 income upper middle class incomes part of the strategy was glossed over to the point of hardly being mentioned. There's one sentence in there that mentions they both work.

Here's the only mention of their general income level: "Our household income is quite average" But unfortunately, from what the crowd can figure out, it's not.

The bulk of the writing goes on what to describe what I'd call "typical" frugal activities - thrift store shopping, refinancing, etc However, that's not what really allowed them to pay off the mortgage in 5 years.

People with around $100K incomes tend to buy (and can technically afford) $300K houses. What really enabled them to pay off the house in 5 years was the decision to buy and stay in $160K house on a $100K annual income. And those numbers are almost totally missing from this story. :(

Because of that omission, I do think the article takes on an "anyone can do this" impression, even if it's not the original intent or tone. If they started out telling us their actual income level or simply typing up their average monthly payment during those years, it might have changed my overall impression. Both logical inclusions in an article written by an analyst who takes pains to tells the exact numbers on his original HUD.

June 14, 2013 9:16 AM

haverwench said:

"Here's the only mention of their general income level: "Our household income is quite average" But unfortunately, from what the crowd can figure out, it's not."

I think the problem here may be that people define "average" in different ways. Their income may indeed be average for their area, but high for other parts of the nation. Median US household income, according to the Census Bureau, is around $52,750. But that ranges from $37,000 in Mississippi to $70,000 in Maryland. The article doesn't say where they live (though it's somewhere that gets snow, judging from the photos), but it wouldn't surprise me to learn that their income is fairly "average" for their area. I agree that listing their actual income, as well as mentioning where they live, would make the article more useful, since you could then adjust the numbers to fit your own income and local real estate market.

One other point: they didn't exactly "buy and stay in $160K house on a $100K annual income." The article says that $160K (or thereabouts) was their initial mortgage balance, but presumably they didn't finance the entire cost of the house. So if they put the standard 20 percent down, they actually bought a $200K house; if they put 40 percent down, it was a $267K house. So while they probably did choose to buy less house than they can afford, and that decision deserves a lot of the credit for how quickly they got that mortgage paid off, they probably underbought by more like one-third of the house price, rather than close to one-half.

June 14, 2013 2:07 PM

bobi said:

The author of that article lives in Charleston, WV and is a government analyst...I clicked on his name and read his profile ;)

June 14, 2013 7:20 PM

mommabee said:

I agree with everyone's points. There's more to moving than just saving money. And besides, if there is job loss, it doesn't matter where you live since you won't be able to afford much anyways. We moved due to job losses and now, have used up the savings to support ourselves. So, no being able to buy much or save anything. I've noticed that there is usually one breadwinner that makes a decent salary while the other spouse has alot of time to clip coupons/search ads/run errands. that is time consuming. I wonder how much they're spending on buying Sunday papers versus the savings/gas/time? I'm sure the articles don't tell the whole story so I take them with a grain of salt.

June 15, 2013 12:39 AM

frugal_fun said:

"So while they probably did choose to buy less house than they can afford, and that decision deserves a lot of the credit for how quickly they got that mortgage paid off, they probably underbought by more like one-third of the house price, rather than close to one-half."

I think perhaps we're only in disagreement about how much of the disparity between purchase price and income level created the "I paid my mortgage off in 5 years" story. :)

I personally think it's about 80% of this story. If they chosen all extra funds focus on mortgage pay down but otherwise kept their lifestyle the same, but I highly doubt it would have been longer than 10 years. Many families are lucky to see $2K to $3k pay each month, let alone have it as discretionary income. (They would have had to average about $2450 principal pay down each month to pay that off in under 5 years.)

The thing is that really do deserve credit for both: it's a rare family that would make that much and then content themselves with a smaller, cheaper home. And then they really focused on stretching every dollar. The combination of both strategies pulled down to under 5 years.  

But without the wide income/expense gap, it would simply not be possible to have it happen so quickly, no matter how much stretching they did.  I absolutely believe most people can pay off their mortgages early, especially with frugal living. But "early" looks a whole lot more like 15-20 years.  And that's okay. It's a pretty big accomplishment, no matter what the time frame.

June 15, 2013 1:38 PM

haverwench said:

"I absolutely believe most people can pay off their mortgages early, especially with frugal living. But "early" looks a whole lot more like 15-20 years."

True. That's one thing that always bugged me about Dave Ramsey: he says if you can't buy your house for cash, you should at least pay off the mortgage in no more than seven years. Um, okay, great if you can pull it off, but if you can't, that doesn't necessarily mean you're better off renting for your whole life.

June 15, 2013 2:00 PM

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