When seeking out financial advice, we seem to be bombarded by experts and people who call themselves experts saying they know exactly what we should do.
As they dole out their platitudes that pay little consideration to our specific circumstances, we can get overwhelmed with a feeling of there being so much (too much) to focus on…
…I guess I must pay off all my debt using the xyz method while also saving _% of my income while also cutting all my expenses while also contributing to my retirement while also…
The thing is, it’s a lot harder to reach our goals when we have too many to strive for at one time. Focus is the real game changer when it comes to achievement – but it’s not easy to decide what to focus on when everyone’s telling you they know best, but they all have different answers.
That’s why it’s sometimes easier and more productive to think of what not to focus on. Cut the wheat from the chaff and forget about the rest. Here’s how you can determine which financial advice you’re getting is the wheat – and which is the chaff.
What Not To Focus On
A very simple way to think about what not to focus on is to determine if the advice you’re being given is overgeneralized or if it’s taking your situation into account.
While there are some things that apply to all of us (credit cards are just too expensive to carry a balance on if you can help it), most financial advice needs to have something to do with your specific circumstances. Because even though there are a lot of best practices that you should follow, they should be prioritized differently based on your situation.
It’s worth repeating:
Just because there are financial best practices we should all follow, that doesn’t mean we should prioritize each best practice the same way. Your circumstances are more important than some experts would lead you to believe.
When it comes to the things you shouldn’t focus on, just ask yourself this question:
Does this advice / idea make sense for my individual set of circumstances? Does this solve my most pressing financial pain point?
Very simply, if the answer is no, then you shouldn’t focus on that thing – at least not now, maybe not ever (depending on the advice).
So what about that “not ever” advice? Yes, it does exist and there are red flags to help you spot it. If you see any of these red flags, then that thing is something you should not focus on:
- Anything that claims to be a quick (or easy) fix
- Anything that promises above average investment returns
- Any attempts to game or exploit the financial system
- Anything that touts a guarantee
- Any financial product or advice that seems to be overly complex
While financial best practices can be hard to do (mainly because of the fact that we are all working on limited incomes and unique emotional triggers), the best practices aren’t hard to understand.
Good financial practices are simple in nature. Executing on said best practices? Not so easy. But the ideas are ideas that anyone should be able to understand when they hear them for the first time. So if anything seems really complex or is too good to be true, then that’s a red flag – and something you should not focus on. Remember: separate the wheat from the chaff and ignore the chaff.
What To Focus On
Given this advice, how will you know what you should focus on? It’s very simple:
Good advice is advice that makes sense.
Oftentimes, good advice is when we hear something and think, “Of course! Why didn’t I think of that?”
Why is good advice often obvious? Because good advice is simple, it’s clear, it makes sense. But it’s hard to come up with on our own because we’re knee deep in our own lives. Thinking of our own financial problems/goals/challenges is like looking for our keys when we’re running late for work. Usually, the keys are in our hand but we don’t realize it. It may often takes someone outside of the situation (not running late for work, not looking for your keys) to see clearly: “Hey, they’re in your hand.”
If you’re still not sure if you should focus on something, then these are some positive signs to look for:
- Solutions that are specific to your needs, your priorities
- Financial solutions focused on laying a foundation and growing your money – and that highlight the fact that it can take time to do so
- Advice that helps you learn how to get out of any financial holes you may be in – and recognizes that getting out of the hole is important to do and will take time
Remember that these are guiding points. You may go through all of this and still not be sure, but if you practice trial and error and trial again, then that’s great! Make your best guess, try it with the idea that you’re not set on it if it doesn’t work, and then keep looking for new signs that you’re on the right or wrong path.
The best financial best practices are sensitive to your situation and provide long-term, sustainable solutions. But it may take you a few tries to find the right fit for you.
In a Nutshell…
Go for smart, actionable advice and ignore the rest. Tune out the voices in the crowd who simply want to say their way or the highway, or the voices that focus on minutia that doesn’t relate to your situation. Good financial habits are all about balance, trial and error, and keeping an eye on the big picture.
Image Credit: Jon Ottosson