Is Getting Money Advice From Friends and Family a Good Idea?

Is Getting Money Advice From Friends and Family a Good Idea? Experts Weigh In

Heather Taylor   Mon, June 6, 2022

When it comes to money advice, many Americans look to friends and family for the answers. Key findings in a GOBankingRates survey on money expertise reveal that 46% of 1,001 surveyed Americans have sought financial advice from friends and family over the last year.

Talking about finances with loved ones still remains a bit tricky. On the one hand, parents who have open discussions about money with their children may be able to help them develop their financial literacy early in life instead of later. On the other hand, and in the current challenging economic climate, it can be detrimental to take advice from friends or family that is not relevant to your situation, or may actually bad financial advice. Where should you go for insight?

GOBankingRates spoke to several financial professionals about which risks and benefits to keep in mind when consulting friends and family for financial guidance.

Keep Intention in Mind

Matthew Vitlin, MBA and financial advisor at Northwestern Mutual, said if you are getting financial advice from friends and family, most people can generally assume that these people mean well and want you to succeed and make good decisions. Eliminate the concern, if you have any, that they may try to pull you down or steer you towards something that benefits them.

Speak to People You Trust

One of the biggest benefits in getting financial advice from friends and family is that the advice is coming from people you trust. Unless they work in the industry or want you to invest in their company, Vitlin said you know they won’t directly benefit if you follow their advice. As a result, there is no conflict of interest.

Talking with people you trust may also allow you to feel comfortable opening up. Grant Gallagher, MBA and head of financial wellbeing at Affinity Federal Credit Union, said convenience and comfort is a benefit of receiving financial advice from friends and family. They’re also usually accessible as a resource, happy to take a quick call or text late at night if need be.

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https://finance.yahoo.com/news/getting-money-advice-friends-family-110015703.html