Why These 3 Popular Money Moves Don’t Work

Sarah Brumley

Sarah Brumley

Let’s be honest. Sometimes there are well-meaning people out there that believe that in order to achieve financial success you have to follow their rules step-by-step. It’s just not true. And that’s why today I want to talk about three popular money moves that are frequently recommended but don’t necessarily work in the real world. Sound like something you’re interested in? Well then, let’s get started.

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Why These 3 Popular Money Moves Don’t Work

Well hey there and welcome back to the Financial Fix Up Podcast! I’m your host, Sarah Brumley, and today we’re diving into three popular money moves that, honestly, don’t always live up to the hype. Now, you’ve probably heard these tips from various financial gurus, and while they might sound smart on the surface, I’m here to offer you a different perspective – one that aligns with real life and real families – like mine and yours!

Sometimes, the advice that we get doesn’t work for our specific situation, and that’s totally okay. The key is to recognize what doesn’t serve you and replace it with something that actually helps you and your family succeed. So, like always, when you come to on of these episodes I just want to remind you to take what you need, leave the rest, and remember: no two financial journeys are the same.

So, let’s break down these three pieces of financial advice that I don’t fully agree with – and more important I’m going to share how you can tweak them to fit your lifestyle, your goals, and your path to financial freedom. Sound like a plan? Well let’s jump right in.

Bad Tip #1: Pay off Debt Before You Take a Vacation

The first piece of “not-so-great advice” I hear from the financial gurus regularly is that if you are going to be financially successful, you need to pay off all of your debt before taking a vacation. Personally, I think that’s a bit extreme. I mean, think about it:

  • Credit cards
  • Student loans
  • Auto loans
  • Mortgage loans
  • Personal loans
  • Medical debt
  • Home equity loans
  • Lines of credit
  • Payday loans

…or any other kind of debt. Sure, you might not have all of these, but if you are anything like Justin and I were when we began our debt payoff journey, you probably have several types. And let’s be real – paying it all off will take time, maybe a LOT of time. That’s okay! it took time to get into debt and it’s going to take time to get out of it.

Should you put vacations on hold until then? I don’t think so, and here’s why:

First, if you have kids, are you willing to sacrifice 10 or more years of making memories with them and your spouse? I certainly wasn’t and that played a big role in our debt-free journey.

Secondly, vacations offer numerous benefits: stress reduction, improved physical health (think lower heart disease risk and lower blood pressure), strengthened relationships, and they can help reframe your perspective if you’re in a rut. Denying yourself a break can leave you in a constant state of stress, increasing the risk of burnout and making you more likely to give up on your financial and personal goals. Is that worth it?

My recommendation? Take a good look at your financial situation and determine what types of memory-creating vacations fit your budget. Maybe it’s not a month-long trip to Hawaii, but a weekend camping trip, a visit to family, or even a staycation at a local hotel. Yes, you might need to temporarily redirect some debt-payoff funds or extend your timeline a bit, but remember: all work and no play leads to burnout, and you don’t want to get to the end of your debt-free journey with no memories to show for it.

Don’t get me wrong here – I’m not saying you should splurge on extravagant vacations every month, but don’t put off all living. Embrace the vacation you can afford, even while you pay off debt.

Step #2: Waiting to Purchase a Home Until Debt-Free

Now don’t get me wrong, I one hundred percent and totally believe that you should be financially stable prior to purchasing a home. That means you know your budget, you’re clear on your financial goals, you’ve taken into account how much of a down payment you can make, and that you’ve considered what your rent payment currently is compared to what your mortgage payment would be. You want to know all of these things well in advance because it can be very easy to become house poor and have appliances go out or major electrical issues and suddenly end up in more financial trouble than you were to start with.

But, I do see the merit in home ownership and I know for many that that dream would be impossible if they had to wait until they were completely out of debt to purchase a home. In our case, we’ve owned our home for almost ten years and it has been an amazing investment for us. In our area at the time it was actually cheaper for us to own a home – at least when it came to the monthly payment – than it would have been to rent a home for our family. So, that was a bit of a deciding factor for us. And, because we chose home ownership, we’ve actually been able to create a little equity in our home over the years by making our monthly payments. So, for us, that was totally worth it. But we were clear ahead of time about how much we could realistically afford.

Like I said, my recommendation is to make sure you are super clear on your financial situation prior to purchasing a home – have a budget in place, have some savings set aside just in case, just start off prepared. It’ll go a long ways to making it the right investment for you as well.

Step #3: Focusing on Debt-Payoff instead of Savings

The third piece of financial advice I disagree with is prioritizing debt payoff over savings. I see this often, okay? Financial experts commonly recommend starting with a $1000 emergency fund and then focusing entirely on paying off debt. And while I agree with building an emergency fund, I don’t think $1000 is enough. For some people, it might work, but for most, especially if it will take you years to pay off debt, that amount won’t cut it.

And yes, trust me I know that when you have debt, especially revolving debt like credit cards and such, then each month you don’t pay them down, you’re accumulating more interest and thus more debt. I know that, but when the typical financial guru tells you to put all of your extra funds into debt-payoff prior to ensuring you have adequate savings, the whole idea makes me cringe. Because things will come up. Emergencies will happen.

So, my recommendation? Obviously you want to have at least a minimum amount in your emergency savings, but we all know that the dollar doesn’t go as far as it used to. So, that means it’s necessary for you to take inventory of what you’ll need if a true emergency should happen. If your most expensive appliance goes out, you lose your job, or a medical emergency comes up, will you have enough to cover that expense? Because I can guarantee that your paid off student loan is going to be of no help to you in that moment. Personally, I recommend fully funding your emergency savings well beyond that initial amount so you’re prepared for major unexpected expenses.

How Will You Manage Your Money?

Alrighty, so there you have it – three common pieces of financial advice I don’t fully agree with.

I wanted to address these because there’s so much financial advice out there on how to manage your money, pay off debt, and achieve financial freedom. Many self-proclaimed financial experts insist that their way is the only way but that’s simply not true. Everyone’s situation is different – our finances, debt-to-income ratios, family dynamics, and even our lifestyles vary. So, even if we share the same goals, the paths we take to get there will vary as well.

The key is to take the advice that works for YOU. Assess your unique situation, figure out what makes sense for your family, and plan accordingly. And if you need help creating that plan, be sure to get your copy of the Financial Fix Up Planner. It’s designed to help you create a strategy that fits your specific circumstances, so you can achieve the financial goals that truly matter to you. You can find it at lemonblessings.com/planner or by following the link in the show notes.

Whatever you decide, just know that I’m cheering you on! You’ve got this! Have an amazing day and I’ll chat with you again next time!

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