Pound the pavement. Just go and deliver your resume in person. Get out there and shake some hands, why don’t ya!
We’ve all heard these financial pearls of wisdom from our parents (and not always because we asked). Despite their best intentions, a lot of these tips from our elders are, well… outdated. To say the least.
Here are six pieces of advice from our parents that simply don’t apply to us anymore — and some smarter options.
1. Work Your Way Through College
Working your way through college used to be an option — back when tuition cost a reasonable amount. That was a long time ago, though.
Most colleges’ tuitions have easily doubled or tripled since the 1980s and ’90s. Working a job while you attend college can help pay the bills, but it won’t pay for college. That’s why so many of us are saddled with student loans.
Once you graduate, refinancing could help you pay off your loans faster and save money in the long run. By combining multiple loans into one, you’ll replace your federal and private loans with a single private loan.
In addition to simplifying the repayment process, refinancing can reduce your interest rate and lower your monthly payments.
2. Keep Your Money in a Savings Account
This is standard parental advice: Open a savings account. That’s the best way to save money.
Yeah, OK, fine. The problem is, with interest rates so low, a savings account these days will pay you pretty much zero interest. You may as well stick some cash under your mattress.
However, a debit card and digital account called Aspiration lets you earn up to 5% cash back and up to 16 times the average interest on the money in your account.
Not too shabby! You just have to get with the times and move beyond using a brick-and-mortar bank.
Enter your email address here to get a free Aspiration Spend and Save account. After you confirm your email, securely link your bank account so they can start helping you get extra cash. Your money is FDIC-insured and they use a military-grade encryption which is nerd talk for “this is totally safe.”
3. Always Buy a House — It’s a Great Investment
This is an oldie but a goodie. I can still hear my parents: Why are you still renting? When are you going to buy a house? It’s a great investment!
The problem is, buying a house isn’t for everyone, especially with the price of homes being so astronomically high these days.
It’s easy to make a compelling case for either choice. Renters don’t have to worry about the housing market or mortgages; buyers get tax breaks and a way to invest in their future.
There’s no one right answer, because every financial and living situation is unique and people’s priorities change over time. Where you plan to live — and how long you plan to live there — is a huge factor in whether it makes more sense to rent or buy a home.
4. Buy Savings Bonds
What are savings bonds? You might remember them as something boring your grandparents used to give you for your birthday.
Savings bonds are an old-school, super-low-risk kind of investment. Most savings bonds earn interest for 30 years. But the problem is, they won’t really earn you much money. For example, series EE bonds have a low interest rate of 0.1%.
These days, you’re better off investing your money in stocks. Sure, the stock market can be a little volatile, with stock prices going up and down. But historically, investing in the stock market will earn you a 7% profit over time.
Whether you’ve got $5, $100 or $800 to spare, you can start investing with Robinhood. Both investing beginners and pros love it because it doesn’t charge commission fees, and you can buy and sell stocks for free — no limits. Plus, it’s super easy to use.
What’s best? When you download the app and fund your account (it takes no more than a few minutes), Robinhood drops a share of free stock into your account. It’s random, though, so that stock could be worth anywhere from $2.50 to $200 — a nice boost to help you build your investments.
5. If You Don’t Have a Degree, You’ll Never Find a Job
Sure, a lot of careers require a college degree. But a lot of jobs don’t. Higher education isn’t for everyone, and there’s no law that says you have to go rushing into college.
Did we mention that college is super expensive now? Student loans are a huge burden. Americans collectively have $1.5 trillion in student debt. Graduates with student loans typically owe $20,000 to $25,000, and at least 20% of them are falling behind on their payments.
There are other options. For example, have you considered bookkeeping? You could earn up to $69 an hour by starting your own bookkeeping business, according to Intuit, the creator of QuickBooks.
You don’t have to be an accountant or good at calculus to be successful at bookkeeping. As long as you’re motivated, a company called Bookkeepers.com will teach you everything you need to know. It’s one of the leading training courses in the field, and it even gives you the first three classes for free.
It’s helped thousands of people launch their own businesses, including Daniel Honan, a military veteran and former painter. He signed up for Bookkeepers.com, and now he’s making $50,000 a year. It only took him three months to get started, taking one class a week. Oh, and he makes his own schedule.
If you’re just a little curious, you just have to submit your email address here to take the first free class. If you stick with it, you could be running your own business in just a few months.
6. Depend on Social Security and Pensions for Your Retirement
First of all, you probably don’t have a pension. Pensions mostly aren’t a thing anymore, unless you work for the government.
You shouldn’t depend entirely on Social Security for your retirement, either. Social Security is designed to be a supplement, not your entire retirement savings.
To retire comfortably, you need to steadily funnel a healthy percentage of your wages into a 401(k) account — it’s literally one of the smartest things you can do for your future. And if your employer matches each contribution, that could mean hundreds of thousands of extra dollars in your account when you retire. It’s free money!
But if you can’t take advantage of this employer benefit because you need all of your paycheck every month, a company called Lendtable will give you the cash.
We know it sounds too good to be true. But if your employer has a 401(k) match program, this is money they already have earmarked for you. By using Lendtable, you’ll be able to unlock that free cash.
Let’s say you make $50k a year and your employer matches your 401(k) contribution up to 4%. If you put $0 in your retirement account this year, you get $0 from your boss. If Lendtable gives you the 4% of your salary your employer is willing to match, you get $2,000 from your boss, minus Lendtable’s share of the profit. (This comes from the extra money you’ve earned, so there’s no sacrifice on your part.)
It takes three minutes to answer a few questions about your eligibility and sign up for an account.
Once you’ve gotten your full match amount from your employer, Lendtable will take the money they lent you back, plus a small share of your profit. If there’s a penalty from your retirement account provider for taking money out, Lendtable will cover that, too.
The risk for you is basically nonexistent, so not taking advantage of your employer match with Lendtable’s offer would make Future Millionaire You bow your head in shame. Get started here.
Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. His dad gave him sound financial advice: “Never bet against the house.”
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
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