Something you want to consider whenever you have a money related question is where the best source of information might be and who we most want to emulate in our decisions? Where do you get your financial advice? Where should you go?
There are a few obvious places people check for advice. Those with a more traditional approach might make their bank or financial adviser their first stop.
A financial advisor or bank is ideal when you need specifics. What should you invest in? How much will a loan cost you over time? What options do you have for short term savings?
Another common stop is a financial media website. This might be the website for a bank, a popular investment blog or one of the many companies set out to inform the public of current trends or other events in the financial world. This might be a website like CNN Money, Forbes or Huff Post Money.
Sites in this category are great to catch up on what’s happening now, new ideas and general statistics about our country, finances and concerns. Like any news site there are biases but as far as up to date information there are few ways to stay in the know as successfully as following a few of these major news sites.
A distant cousin of the financial media website is the financial blog. There are tons to choose from and although they will come with perhaps a stronger bias than a media website, they add a personal touch that’s hard to come by from a larger corporation like Forbes or Huffington Post. The best resource to find a good list of financial blogs is wisebread.com’s list of the top 100 personal finance blogs.
Finally there’s personal advice or word of mouth. This is perhaps the most common and the trickiest source of financial information. What your parents, siblings, friends and random acquaintances tell you about your finances can range from a life-changing wake up call to a risk-ridden road to bankruptcy.
It’s these alternative sources that we want to question and perhaps provide a litmus test for.
Who should you listen to?
It’s tempting to go to blogs and friends that tell you what you want to hear. Unfortunately there are so many voices in this money-advice region of our life that it’s hard to determine who is worth listening to. Do you take advice from someone who speaks confidently but recently filed for bankruptcy? Can you trust your neighbor who just had to borrow against their retirement to cover an unexpected home repair? Does the blogger underneath mountains of debt really have credible advice to give?
There are definitely times and places for commiserating and sometimes it’s excellent to release some of your financial fears to someone you know understands you i.e. another person working there way through the tricky task of borrowing money for college, paying off a home or figuring out how to afford necessary medical expenses. That person doesn’t need to be a guru to tell you what’s worked or hasn’t for them.
It’s the process by which we discern good from bad advice that’s important, not the process by which we accumulate the advice (reading blogs, talking to friends, visiting the bank).
We would argue the more information we have the better.
What questions should you ask?
Ultimately we think each financial resource available, the traditional banks and advisers, financial blogs and your friends and family all have merit. Different questions for different people at different times. What you should consider every time you’re looking for advice on a financial decision is this:
- Do you want to emulate the person or entity giving you advice? Do they practice what they preach?
- Will the person/entity benefit from you taking their recommendation? Financial advisers might get a kick back from certain investments, bloggers get some income when you use one of the products they’ve recommended.
- Does the advice-giver provide evidence that their suggestion works for people in your situation or even multiple types of people?
Ask away. Research. Commiserate or celebrate. It’s OK if you don’t know the complete financial story of everyone who gives advice, but it is important that you understand not all advice is created equal.
Where do you go for financial advice? Why?