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When you have a question about your finances, who do you ask? A trusted family member, your friends, maybe Google?
Nowadays there are more resources than ever for us to use to understand our finances, but that doesn’t make it any less confusing! It’s not uncommon to receive conflicting options on anything having to do with money; everyone has their own ideas on the right way to handle it.
Deciding who to listen to can be challenging, but it isn’t impossible!
When you find yourself in this situation, use this rule of thumb: Any time you receive financial advice, you should consider the source.
Considering the Source
Does this individual have experience in the topic you’re curious about? What are the pros and cons of listening to this person instead of someone else?
Here are a few examples of sources you might encounter:
1. Finance Influencers
There are influencers for every niche imaginable, and finance is no exception.
Financial influencers (nicknamed “finfluencers” by some sources) share content about – you guessed it – finance. Their posts cover anything from the stock market to high-yield savings accounts to auto loans and often feature their opinions on the best way to approach these products.
Pros:
- Influencers are easily accessible to a broad audience - all you have to do is open TikTok or Instagram. There isn’t any cost to watch their content, and users can view it whenever they want – even outside of traditional business hours.
- Social media content is typically designed to be easy-to-digest and understand. This is a great tool for people just starting to learn about finance – lots of information with minimal jargon.
Cons:
- Influencers don’t know you. They don’t know your personal situation or your goals, which means their advice may not be a good fit for you.
- You can’t always be certain of their credentials or motives. Some finfluencers are qualified financial professionals, but others aren’t, and it can be hard to discern the difference through a smartphone screen.
2. Family and Friends
We’ve all experienced a well-meaning relative offering us advice about money, even if we didn’t necessarily ask for it!
Pros:
- They know and care about you. They understand your lifestyle, your dreams, and who you are as a person. That means that their advice will be more tailored to your specific situation than something you might read or watch online.
- Our family and friends want to see us succeed – that means that their advice will most likely come from a positive, uplifting place.
Cons:
- While they want the best for you, your loved ones might not have the expertise that you need to make a sound decision. Like most of us, they will probably draw on their own personal experiences handling money. While that can be helpful, they might miss nuances that apply to your situation or have outdated information that is no longer accurate.
3. Finance Professionals
Financial advisors, counselors, and other professionals in the finance field are another source you might turn to.
These folks typically come from a finance background and may have additional certifications in specific areas like lending. They usually work for a financial business, bank, or credit union.
Pros:
- Professionals in this field are well-versed in finance and can offer advice based on concrete facts and knowledge.
- Financial advisors and similar professionals have experience guiding people to the best solution possible. In other words, they give advice for a living, so they’re pretty good at it.
- Because this group is typically part of a finance-oriented organization, there will most likely be procedures in place to prevent them from steering you wrong.
Cons:
- While they’re a great resource, financial professionals aren’t always accessible. Their services might be restricted to standard business hours or may only be available in-person at a physical location.
- These services can also cost money, depending on where you go (psst: Spero’s financial coaching service is free!).
To Wrap Things Up…
No matter who you turn to for help, it’s always a good idea to consider the source. After all, you’re the one who has to live with your decision, so you want to make sure you’re getting sound advice and making the best choice for you, your family, and your future!
This material is for educational purposes only and is not intended to provide specific advice or recommendations for any individual.
