.The Best Way to Manage Your Money Isn’t What You’ve Been Told
The Best Way to Manage Your Money Isn’t What You’ve Been Told
By Anne Gaviola Jan 6 2020
Outdated advice on how to save, budget, and handle your finances doesn’t cut it anymore.
Financial advice should come with an expiry date. Because outdated guidance is like financial sabotage, according to money experts.
As written about in the Wall Street Journal last year, much of the financial advice young people have been given might actually be the opposite of what they’re supposed to be doing with their money.
Young people are delaying or foregoing life milestones like getting married, buying a home, and having kids, so advice that was fine for boomers doesn’t always make sense for the economy that millennials and Gen Z live in. Personal finance expert Robin Taub said precarious employment and changing values are why the old financial playbook needs a refresh.
“We have a sharing and a gig economy now—meaning there are a lot of people that don’t have full-time employment. A lot of freelancers and solopreneurs work for an app like Lyft or Foodora. There’s also been a shift in terms of people not feeling like they have to own things like a car or a house,” she said.
Here are seven pieces of money advice that your parents probably didn’t give you.
1) Set up saving so you don’t have to think about it
The old 50/30/20 budgeting advice suggested allotting half of what you make to essentials like rent and food, 30 percent for fun, and 20 percent savings for “a rainy day.” U.S. presidential candidate Elizabeth Warren famously used this formula in her 2006 book All Your Worth: The Ultimate Lifetime Plan, which she co-authored with her daughter. But nowadays, aiming to save 10 percent of your income is probably more realistic. And according to Taub, how you save that is really important.
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