When it comes to the world of finance, a lot of people want to put in their two cents with what they think is best. Whether it’s your parents, friends, coworkers, random people on Facebook, or just complete strangers, they’ve all got something to say about your finances.

What’s scary though is that the world of finance changes and evolves. What was good or smart advice twenty years ago might not be a wise move today. Plus, everybody’s situation is different. Advice that works for one person might be a terrible choice for you. So we’ve found some common financial advice that often leads to doing more harm in the long run and some better advice you should follow.

Bad Advice: Don’t Get a Credit Card

A very common piece of advice younger people hear is to never get a credit card. The reasoning behind it is that some parents are afraid their children will treat a credit card like free money and dig themselves into debt. So, rather than educating them on how to utilize a credit card and the importance of it, they warn them away.

Credit cards are actually a very useful tool for building your credit and giving yourself a little bit of financial flexibility. Every adult can benefit from using a credit card wisely as it’s great for increasing your credit score. It’s true that if misused, credit cards can create major debt with a high interest rate and lead to hurting your credit report.

Good Advice: Use a credit card regularly, don’t overspend with it

Rather than ignoring credit cards (and your credit,) plan to have one or two cards and use them regularly. Pay for the occasional dinner with it or other small purchases you can afford and then pay it off on time. Don’t overuse it and make sure you keep track of how much you’ve spent with your card.

If you don’t have a credit card yet or you are looking for another one, Pioneer does offer members a VISA^® Credit Card, along with a Rewards! program you can enjoy. You can even sign up for a secured VISA card where you provide the money up front to use the credit card and if you ever default on it, we'll use your provided money to pay it off so your credit score doesn't get hurt.

Apply for a VISA Credit Card!

Bad Advice: Take Big Risks in Investing to Make Money

When people think about investing, they likely picture Wall Street and people in power suits making huge financial decisions in a single second. That thought is intimidating to the average person and so many people stay away from investing outside of their retirement funds. 

The common piece of advice when people ask about investing is that you have to take huge risks to earn money; that you have to play the stock market and be willing to risk it all on big gambles.

The truth of it is there are many different ways you can invest your money to grow it. Even keeping money in a savings account is a way to invest since you do earn interest on it. It is true that you can pursue some investments that are risky and potentially get a bigger payout if it works, but you also are more likely to lose your initial investment.

Good Advice: Learn more about investing and diversify your investments

Take time and learn about the world of investments and what is available to you. It’s wise to split up what you invest in, rather than putting all of your eggs in one basket. Put some money in a few more risky investments and other money is much more stable, if slower growing, ones.

Pioneer does offer some investment opportunities for our members. We offer IRAs to help save up for retirement, savings accounts with higher interest rates for specific purposes, and term certificates.

Bad Advice: Throw All of Your Money at Your Debt

Debt is the worst! It’s a great goal to get rid of it and Pioneer is here to help our members make it happen. One dangerous piece of advice though is to use all of your money, including most of your income and all of your savings, to get rid of debt.

By directing all of your finances to getting rid of debt, you're putting yourself at risk and will fall behind in other areas. If you have your debt at a manageable level, you should still be putting some money into your savings, some into your retirement fund, and still taking care of regular expenses. Don’t sacrifice all of your savings and emergency fund to get rid of debt, as that could put you in a very dangerous situation should something bad happen.

Good Advice: Make paying off debt a priority, but don’t sacrifice other finances

Be sure to consult your budget when making a plan for paying off your debt. Make regular deposits to your savings, keep up with your retirement fund, and don’t ignore important payments like bills and groceries. What you should do is get rid of buying non-essentials and put that money towards your debts. Need help identifying your non-essential purchases? Use the Money Management tool in myPioneer to get a breakdown of where your money is going.

Lots of Bad Advice About Credit Scores

There is a ton of advice out there on how to raise your credit score and a frightening amount of it is wrong. Online blogs, personal acquaintances, and even some financial experts can all give bad advice on how to build credit.

Some common bad credit advice includes: always having a balance on your credit card, buying a new car with a loan just to build credit, and closing old credit cards you don’t use. All of these tactics can lead to either hurting your credit or other dangerous financial situations.

Good Advice: Consult a credit expert on the best way to raise your credit

If you need to raise your credit score, you have to do it the right way. If you don’t know, or are just a little unsure, you need to consult with an expert in credit to make a plan. That way, you can have a clear path to raising your credit.

Pioneer can provide the expertise you need with our free Credit Checkup. We’ll look through your credit report and score to identify where you can improve your credit. Then, we’ll make recommendations on what tools to use and create a plan to lead you to a healthy credit score.

Get Your Free Credit Checkup!