Bad Personal Finance Advice: Don't Fall Into This Common Trap

Financial advice is everywhere. Under every rock you might upend and from the bullhorns of all kinds of pundits on television and social media, finding financial advice really isn't difficult. The tough part: Parsing the bad advice from the good. So many people out there talk about their personal experiences and try to deliver well-meaning financial advice to others, only to have their own personal biases, hangups, and advantages get in the way of their advice actually translating into useful information.

Whether you've experienced incomplete or ill-conceived financial advice before (such as this terrible retirement advice on social media that sees savers focusing on life insurance products), or been exposed to crooked actors within the space, you're certain to have come across information and modes of thinking that just didn't cut the mustard. Money DIgest spoke with David Delisle, the author of "The Golden Quest: Your Journey to a Rich Life" about his personal experiences with financial advice from others. Delisle has taken his own successes and failings and wrapped up his way of thinking about personal finance into a narrative exploration that can help both young people and older consumers better visualize what's important to them through the mental device of the "Awesome Stuff."

David Delisle is quick to point out a personal hero of his within the world of personal finance. "David Chilton will always have a special place in my heart," he says. "He was the first personal finance celebrity I was introduced to, and I read "The Wealthy Barber" when I was just 10 years old. I even attended one of his book tour events!" Delisle gushes. The 1989 book is a personal finance magnum opus from Chilton. It has sold over 2 million copies in Canada alone (Chilton's home country) and seen a few updates along with a sequel titled "The Wealthy Barber Returns."

The story is a novelization rather than straightforward advice in a nonfiction format. The characters seek out budgeting advice and personal finance wisdom from their barber, Roy. He has lived a frugal life while tending to the shop he took over from his father. His primary approach to managing his finances — and thus his advice to his patrons — is to save 10% of everything earned. Over time, this will build into sizeable wealth. Delisle notes that this is where he first discovered the value of compound interest, "and I never viewed money the same again," he says.

Getting the basics right is a key step in the right direction. Living frugally, at its core, means living a life that costs less than you earn. Living beneath your means can grow your net worth tremendously over time. Too many people become hung up on complex ideas and big picture strategies surrounding personal finance, spurred on by flashy personal finance advice and advisors. Instead, it's important to go back to basics and tend to your financial health in meaningful and simplistic ways. Reviewing your budget on a regular basis, contributing to your retirement funds, and trying your best to keep revolving debt balances at or near zero (or working actively to get there if you do carry balances already) are all relatively simple steps that can make a huge impact when done consistently.

However, there's one piece of advice that David Delisle highlights as tremendously damaging. "I want to change the narrative around financial literacy. We need to shift away from shame and judgement, and instead focus on curiosity, awareness, and choice." These points of focus allow consumers to learn from their mistakes and grow as members of a complex financially mobile society. Money is certainly not the end all be all, but it funds the daily necessities (and fun) of everyone's lifestyle. If you're too hard on yourself for making a mistake or become rigid in following specific advice, you'll close yourself off to the growth potential that's waiting out there for you. "That's how we'll inspire people to build healthier, more fulfilling relationships with money," Delisle offers.